#WaveAnalysis
#WTI crude oil reversed from resistance level 81.6
• Likely to fall to support level 78.0
WTI crude oil recently reversed down from the pivotal resistance level 81.6 (which has been reversing the price from the end of November) intersecting with the 50% Fibonacci correction of the previous downward impulse from November.
The downward reversal from the resistance level 81.6 stopped the earlier minor ABC correction 2.
Given the persistent daily downtrend, WTI crude oil can be expected to fall further toward the next support level 78.0.
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#WTI crude oil reversed from resistance level 81.6
• Likely to fall to support level 78.0
WTI crude oil recently reversed down from the pivotal resistance level 81.6 (which has been reversing the price from the end of November) intersecting with the 50% Fibonacci correction of the previous downward impulse from November.
The downward reversal from the resistance level 81.6 stopped the earlier minor ABC correction 2.
Given the persistent daily downtrend, WTI crude oil can be expected to fall further toward the next support level 78.0.
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This morning the FX market focused on a surprise out of Australia, where the CPI growth rate for the 4Q22 accelerated from 7.3% to 7.8% y/y, against the expected 7.5%. Inflation hit its highest level since 1990. Moreover, a 1.9% rise in prices in the final three months of last year shows that inflationary pressures have stayed the same.
The significant outperformance of the data compared to expectations triggered a wave of Aussie buying. AUDUSD climbed to 0.7120 by the start of the European session as traders reassessed the outlook for policy tightening, suggesting a higher interest rate.
From a broader perspective, the Australian data and today's stronger-than-expected numbers from New Zealand and earlier from Japan should remind the market that inflation is sticky. This is true now that employment levels in the developed world have been near their highest for decades. If high inflation is a global phenomenon, it has the potential to regain some of the traction the dollar has lost since October.
The significant outperformance of the data compared to expectations triggered a wave of Aussie buying. AUDUSD climbed to 0.7120 by the start of the European session as traders reassessed the outlook for policy tightening, suggesting a higher interest rate.
From a broader perspective, the Australian data and today's stronger-than-expected numbers from New Zealand and earlier from Japan should remind the market that inflation is sticky. This is true now that employment levels in the developed world have been near their highest for decades. If high inflation is a global phenomenon, it has the potential to regain some of the traction the dollar has lost since October.
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#WaveAnalysis
#EURNZD reversed from support level 1.670
• Likely to rise to resistance level 1.7000
EURNZD currency pair recently reversed up from the key support level 1.670 (which stopped the previous waves (a), A and (2)) intersecting with the lower daily Bollinger Band and the 38.2% Fibonacci correction of the previous sharp upward impulse (1) from December.
The upward reversal from the support level 1.670 continues the active intermediate impulse wave (C)
EURNZD currency pair can be expected to rise further toward the next resistance level 1.7000 (top of the sideways price range inside which the pair has been moving from December).
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#EURNZD reversed from support level 1.670
• Likely to rise to resistance level 1.7000
EURNZD currency pair recently reversed up from the key support level 1.670 (which stopped the previous waves (a), A and (2)) intersecting with the lower daily Bollinger Band and the 38.2% Fibonacci correction of the previous sharp upward impulse (1) from December.
The upward reversal from the support level 1.670 continues the active intermediate impulse wave (C)
EURNZD currency pair can be expected to rise further toward the next resistance level 1.7000 (top of the sideways price range inside which the pair has been moving from December).
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#WaveAnalysis
#GBPNZD reversed from support level 1.9000
• Likely to rise to resistance level 1.9330
GBPNZD currency pair recently reversed up from the round support level 1.9000 (which has been reversing the price from December) intersecting with the lower daily Bollinger Band and the 61.8% Fibonacci retracement of the previous upward impulse from September.
The upward reversal from the support level 1.9000 stopped the B-wave of the previous ABC correction (B).
GBPNZD currency pair can be expected to rise further toward the next resistance level 1.9330 (which stopped the previous waves (ii) and A).
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#GBPNZD reversed from support level 1.9000
• Likely to rise to resistance level 1.9330
GBPNZD currency pair recently reversed up from the round support level 1.9000 (which has been reversing the price from December) intersecting with the lower daily Bollinger Band and the 61.8% Fibonacci retracement of the previous upward impulse from September.
The upward reversal from the support level 1.9000 stopped the B-wave of the previous ABC correction (B).
GBPNZD currency pair can be expected to rise further toward the next resistance level 1.9330 (which stopped the previous waves (ii) and A).
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Pound hits ceiling
The British Pound is testing the $1.2400 level this week, above which it failed to consolidate in the middle of last month. The GBPUSD has yet to trade consistently higher since last June.
Looking at the entire rally from September's historic lows at 1.0327, the retreat from December's highs to 1.19 is a fairly common Fibonacci retracement to the 76.4% area of the original move, though not the classic 61.8%.
Technically, two important moving averages, the 50- and 200-day moving averages, acted as support in early January, preventing the pair from falling any further while allowing it to take some profits from the initial rally.
The pattern now suggests that GBPUSD has the potential to rise to 1.37-1.38, where the highs of last January and the 161.8% level of the first wave of the rally are concentrated. A move in this direction has every chance of becoming the main trend this year, although we expect a very significant battle for 1.300 over the next few quarters.
The British Pound is testing the $1.2400 level this week, above which it failed to consolidate in the middle of last month. The GBPUSD has yet to trade consistently higher since last June.
Looking at the entire rally from September's historic lows at 1.0327, the retreat from December's highs to 1.19 is a fairly common Fibonacci retracement to the 76.4% area of the original move, though not the classic 61.8%.
Technically, two important moving averages, the 50- and 200-day moving averages, acted as support in early January, preventing the pair from falling any further while allowing it to take some profits from the initial rally.
The pattern now suggests that GBPUSD has the potential to rise to 1.37-1.38, where the highs of last January and the 161.8% level of the first wave of the rally are concentrated. A move in this direction has every chance of becoming the main trend this year, although we expect a very significant battle for 1.300 over the next few quarters.
However, the tactical stance is more cautious. The pound has been hitting a glass ceiling just above 1.2430 for over a week now. The inability to rewrite the previous highs is not a formal signal for further growth.
At the same time, a divergence with the Relative Strength Index is forming on the daily timeframe, as the price's repeated highs are coming from the index's lower local peaks, which is a bearish signal.
Without a strong rally above 1.2430, we should be prepared for a deeper local correction. The area of the January lows, also crossed by the 200 SMA, looks like a good target for another pullback.
A deeper correction towards 1.1630, where 61.8% of the recent rally and last October's local peak are located, cannot be ruled out. Such a full-blown correction would fully recharge the pound bulls and pave the way for further growth.
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At the same time, a divergence with the Relative Strength Index is forming on the daily timeframe, as the price's repeated highs are coming from the index's lower local peaks, which is a bearish signal.
Without a strong rally above 1.2430, we should be prepared for a deeper local correction. The area of the January lows, also crossed by the 200 SMA, looks like a good target for another pullback.
A deeper correction towards 1.1630, where 61.8% of the recent rally and last October's local peak are located, cannot be ruled out. Such a full-blown correction would fully recharge the pound bulls and pave the way for further growth.
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The preliminary estimate for the 4Q22 GDP showed annualised growth of 2.9%. This is a slowdown from the previous period (3.2%) but better than expected (2.6%).
Compared to the same quarter a year ago, the economy grew by only 1.0%, after 1.9% in the previous quarter. This growth is well below the trend rate (around 2% on average since 2000), reflecting the difficulties of growth in an environment of sharply rising interest rates.
Stronger-than-expected GDP growth could be seen as good news for the stock market.
Compared to the same quarter a year ago, the economy grew by only 1.0%, after 1.9% in the previous quarter. This growth is well below the trend rate (around 2% on average since 2000), reflecting the difficulties of growth in an environment of sharply rising interest rates.
Stronger-than-expected GDP growth could be seen as good news for the stock market.
Investors can bet that the economy is adjusting relatively well to monetary tightening. But this is a very fragile hypothesis, as strong growth in the current monetary cycle will allow the Fed to raise rates faster or further than previously expected. Much of the rise in the Nasdaq100 since the start of the year has been driven by expectations that rates will be cut before the end of the year, despite assurances of the contrary from Fed officials.
In addition, the dollar index is hitting multi-month lows in the currency market, confirming that expectations of Fed dovishness are the main driver. The norm, in this case, would be for the dollar to strengthen in response to better-than-expected GDP growth data.
The combination of data and market reaction makes it necessary to pay close attention to what signals the Fed will send out after next Wednesday's meeting.
In addition, the dollar index is hitting multi-month lows in the currency market, confirming that expectations of Fed dovishness are the main driver. The norm, in this case, would be for the dollar to strengthen in response to better-than-expected GDP growth data.
The combination of data and market reaction makes it necessary to pay close attention to what signals the Fed will send out after next Wednesday's meeting.
#WaveAnalysis #XOM
• ExxonMobil broke key resistance level 114.00
• Likely to rise to resistance level 120.00.
ExxonMobil recently broke above the key resistance level 114.00 (which reversed the price multiple times during the last November).
The breakout of the resistance level 114.00 accelerated the active impulse waves (iii) and 3 – which belong to wave (3) from December.
Given the overriding daily uptrend, ExxonMobil can be expected to rise further toward the next resistance level 120.00.
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• ExxonMobil broke key resistance level 114.00
• Likely to rise to resistance level 120.00.
ExxonMobil recently broke above the key resistance level 114.00 (which reversed the price multiple times during the last November).
The breakout of the resistance level 114.00 accelerated the active impulse waves (iii) and 3 – which belong to wave (3) from December.
Given the overriding daily uptrend, ExxonMobil can be expected to rise further toward the next resistance level 120.00.
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#WaveAnalysis
#EURCAD reversed from pivotal resistance level 1.4595
• Likely to fall to support level 1.4400
EURCAD currency pair recently reversed down from the pivotal resistance level 1.4595 (which stopped the sharp uptrend in the middle of December).
The resistance level 1.4595 was further strengthened by the upper daily Bollinger Band.
EURCAD currency pair can be expected to fall further toward the next support level 1.4400 (which reversed the price sharply earlier this month).
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#EURCAD reversed from pivotal resistance level 1.4595
• Likely to fall to support level 1.4400
EURCAD currency pair recently reversed down from the pivotal resistance level 1.4595 (which stopped the sharp uptrend in the middle of December).
The resistance level 1.4595 was further strengthened by the upper daily Bollinger Band.
EURCAD currency pair can be expected to fall further toward the next support level 1.4400 (which reversed the price sharply earlier this month).
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#WaveAnalysis #NatGas
Natural gas broke support zone
• Likely to fall to support level 2.5000
Natural gas recently broke the support zone lying between the round support level 3.000 and the support level 3.500, which started the sharp uptrend at the end of 2021.
The breakout of these support levels accelerated the active impulse waves (iii) and C.
Natural gas can be expected to fall further toward the next support level 2.5000 (target price for the completion of the active impulse wave C).
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Natural gas broke support zone
• Likely to fall to support level 2.5000
Natural gas recently broke the support zone lying between the round support level 3.000 and the support level 3.500, which started the sharp uptrend at the end of 2021.
The breakout of these support levels accelerated the active impulse waves (iii) and C.
Natural gas can be expected to fall further toward the next support level 2.5000 (target price for the completion of the active impulse wave C).
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#Bitcoin is currently trading at around $23.0K. Spikes to $23.7K and down to $22.5K leave their mark on the chart but do not move the market's balance point. Interestingly, this oscillation occurs with a rising equity market in the background and a moderately weaker dollar, although this environment often feeds demand for risk.
This buyer passivity may be a consequence of fatigue after the 44% rally since the start of the year, but it may also reflect an internal pull to sell on the upside. This applies to the crypto market, whose capitalisation has stabilised at just over $1 trillion.
It is worth being prepared that there may be a lack of major moves until the Fed's decision next Wednesday.
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This buyer passivity may be a consequence of fatigue after the 44% rally since the start of the year, but it may also reflect an internal pull to sell on the upside. This applies to the crypto market, whose capitalisation has stabilised at just over $1 trillion.
It is worth being prepared that there may be a lack of major moves until the Fed's decision next Wednesday.
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A bullish picture is forming on the #Nasdaq100, suggesting that we see the beginning of a bull market and not just a rally in a bear market. If the index can close above 12000 by the end of next week, it would pave the way for 13000 by the end of the first quarter and 13600 by the end of the year.
Last week the index closed above the most important long-term trend line (200-week moving average). The price was also above the downside resistance line, which the index had reversed several times last year.
These long-term signals looked rather weak as the move was very formal. But this week, the rally has continued, confirming buyers’ confidence at current levels.
Moreover, yesterday the Nasdaq100 closed above its 200-day moving average, further confirming the long-term trend reversal. As with last week's close, the excess is nominal, leaving room for doubt.
Last week the index closed above the most important long-term trend line (200-week moving average). The price was also above the downside resistance line, which the index had reversed several times last year.
These long-term signals looked rather weak as the move was very formal. But this week, the rally has continued, confirming buyers’ confidence at current levels.
Moreover, yesterday the Nasdaq100 closed above its 200-day moving average, further confirming the long-term trend reversal. As with last week's close, the excess is nominal, leaving room for doubt.
And those doubts have something to fall back on. The index is up around 13% in three weeks, back to the highs of last December, where the gains have slowed considerably: Wednesday's dip has been bought off, but the swings around 12,000 continue. The 200-day average has been largely breached by the fall.
The index is also close to the over-bought territory on the daily RSI. This indicator is a good predictor of technical corrections, although it sometimes signals too early.
However, our main concern is the extent to which market expectations diverge from the Fed's rhetoric. The build-up of expectations that the Fed will cut rates this year has been the main driver of growth in the high-tech sector.
The index is also close to the over-bought territory on the daily RSI. This indicator is a good predictor of technical corrections, although it sometimes signals too early.
However, our main concern is the extent to which market expectations diverge from the Fed's rhetoric. The build-up of expectations that the Fed will cut rates this year has been the main driver of growth in the high-tech sector.
But all we hear from officials is a willingness to slow the pace of tightening to 25 basis points at a time, with a further 2-3 hikes. If the official FOMC commentary next Wednesday confirms the Fed's hawkish stance, we could see a repeat of the reversal that occurred in June and August last year.
If we are right, the Nasdaq100 could retreat into the 11250-11500 range. The lower boundary of this range is the local lows of the 19th of January, while the upper boundary is the 61.8% retracement of the advance of the 6th of January and the 50-day moving average.
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If we are right, the Nasdaq100 could retreat into the 11250-11500 range. The lower boundary of this range is the local lows of the 19th of January, while the upper boundary is the 61.8% retracement of the advance of the 6th of January and the 50-day moving average.
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Australian inflation remains an important topic for the forex market as it tries to determine the RBA's next steps.
In contrast to consumer inflation, producer prices were surprised by weak growth. They rose 0.7% last quarter (1.7% was expected), with the annual rate slowing from 6.4% to 5.8%.
With producer inflation outpacing consumer inflation, it is reasonable to expect inflationary pressures to ease in the next quarter. Interestingly, the PPI growth rate in Australia is lower than that of the CPI. The former peaked at 6.4% in the 3Q22 quarter, and the latter – at 7.8% in 4Q22.
The cooling of producer inflation strengthens the argument that another 25bp hike at the next meeting on 7 February will be sufficient. On the other hand, the high increase in consumer prices suggests that there will be several hikes before the RBA pauses.
Today's data from Australia halted the #AUDUSD's growth above 0.7130 and dropped the pair below 0.7100.
In contrast to consumer inflation, producer prices were surprised by weak growth. They rose 0.7% last quarter (1.7% was expected), with the annual rate slowing from 6.4% to 5.8%.
With producer inflation outpacing consumer inflation, it is reasonable to expect inflationary pressures to ease in the next quarter. Interestingly, the PPI growth rate in Australia is lower than that of the CPI. The former peaked at 6.4% in the 3Q22 quarter, and the latter – at 7.8% in 4Q22.
The cooling of producer inflation strengthens the argument that another 25bp hike at the next meeting on 7 February will be sufficient. On the other hand, the high increase in consumer prices suggests that there will be several hikes before the RBA pauses.
Today's data from Australia halted the #AUDUSD's growth above 0.7130 and dropped the pair below 0.7100.
#WaveAnalysis #GE
• General Electric broke key resistance level 80.62
• Likely to rise to resistance level 87.500
General Electric earlier broke above the key resistance level 80.62 (which stopped the previous short-term upward impulse wave 3).
The breakout of the resistance level 80.60 accelerated both of the active impulse waves 5 and (3).
Given the clear multi-month uptrend, General Electric can be expected to rise further toward the next resistance level 87.500 (target price for the completion of the active impulse waves 5 and (3)).
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• General Electric broke key resistance level 80.62
• Likely to rise to resistance level 87.500
General Electric earlier broke above the key resistance level 80.62 (which stopped the previous short-term upward impulse wave 3).
The breakout of the resistance level 80.60 accelerated both of the active impulse waves 5 and (3).
Given the clear multi-month uptrend, General Electric can be expected to rise further toward the next resistance level 87.500 (target price for the completion of the active impulse waves 5 and (3)).
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#WaveAnalysis #TSLA
• Tesla broke resistance level 160.00
• Likely to rise to resistance level 200.00
Tesla rising sharply after the price broke the resistance level 160.00 intersecting with the 61.8% Fibonacci correction of the downward impulse from December.
The breakout of the resistance level 160.00 accelerated the active intermediate impulse wave (1) from the start of this year.
Tesla can be expected to rise further toward the next round resistance level 200.00 (top of the earlier minor correction (iv) from December).
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• Tesla broke resistance level 160.00
• Likely to rise to resistance level 200.00
Tesla rising sharply after the price broke the resistance level 160.00 intersecting with the 61.8% Fibonacci correction of the downward impulse from December.
The breakout of the resistance level 160.00 accelerated the active intermediate impulse wave (1) from the start of this year.
Tesla can be expected to rise further toward the next round resistance level 200.00 (top of the earlier minor correction (iv) from December).
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#WaveAnalysis
#AUDUSD reversed from long-term resistance level 0.7110
• Likely to fall to support level 0.7000
AUDUSD currency pair recently reversed down from the long-term resistance level 0.7110 (former top of wave (2) from the start of August).
The downward reversal from the resistance level 0.7110 stopped the earlier impulse waves (C) and 3 .
Given the strong daily downtrend, AUDUSD currency pair can be expected to fall toward the next support level 0.7000.
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#AUDUSD reversed from long-term resistance level 0.7110
• Likely to fall to support level 0.7000
AUDUSD currency pair recently reversed down from the long-term resistance level 0.7110 (former top of wave (2) from the start of August).
The downward reversal from the resistance level 0.7110 stopped the earlier impulse waves (C) and 3 .
Given the strong daily downtrend, AUDUSD currency pair can be expected to fall toward the next support level 0.7000.
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#Bitcoin rose 5.3% last week to close at $23.8K. On Sunday, the first cryptocurrency was one step away from $24K, updating its high since August. Ethereum gained 0.9% to $1640. Top-10 leading altcoins have gained between 2.7% (Dogecoin) and 18.8% (Polygon).
Total cryptocurrency market capitalisation rose 4.4% to $1.08 trillion over the week, according to CoinMarketCap. The cryptocurrency fear and greed index reached the greed zone for the first time since late March last year.
Bitcoin is gradually approaching its key moving averages. The 200-week is just above $24.7K, and the 50-week is now at $24.5K. A break below these levels would be a strong sell signal.
A rebound above them could restore confidence in the crypto market. But be prepared for a prolonged consolidation or correction before a decisive move higher.
Another recalculation showed a 4.7% increase in the mining complexity of the first cryptocurrency. The index renewed its all-time high at 39.35T.
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Total cryptocurrency market capitalisation rose 4.4% to $1.08 trillion over the week, according to CoinMarketCap. The cryptocurrency fear and greed index reached the greed zone for the first time since late March last year.
Bitcoin is gradually approaching its key moving averages. The 200-week is just above $24.7K, and the 50-week is now at $24.5K. A break below these levels would be a strong sell signal.
A rebound above them could restore confidence in the crypto market. But be prepared for a prolonged consolidation or correction before a decisive move higher.
Another recalculation showed a 4.7% increase in the mining complexity of the first cryptocurrency. The index renewed its all-time high at 39.35T.
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