#WaveAnalysis
#EURCAD reversed from support level 1.4280
Likely to rise to resistance level 1.4500
EURCAD recently reversed up from the key support level 1.4280 (which stopped the previous corrections 4 and (4) in January and February respectively).
The upward reversal from the support level 1.4280 stopped the two of the active downward impulse waves – 1 and (C).
Given the strongly bullish euro sentiment and the oversold daily Stochastic, EURCAD can be expected to rise further toward the next resistance level 1.4500 (former support from the middle of May).
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#EURCAD reversed from support level 1.4280
Likely to rise to resistance level 1.4500
EURCAD recently reversed up from the key support level 1.4280 (which stopped the previous corrections 4 and (4) in January and February respectively).
The upward reversal from the support level 1.4280 stopped the two of the active downward impulse waves – 1 and (C).
Given the strongly bullish euro sentiment and the oversold daily Stochastic, EURCAD can be expected to rise further toward the next resistance level 1.4500 (former support from the middle of May).
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The crypto market cap has been virtually unchanged over the past 24 hours, remaining near 1.1 trillion. Bitcoin is marginally higher, up 0.1%, while Ethereum is down 0.3%. Top altcoins show more amplitude, ranging from a 3.2% drop (#Cardano) to a 1% gain (#Polygon).
#Bitcoin is trading near $26.5K - in the middle of the previous day's trading range and just above the psychologically important 200-week moving average. A break below this level could trigger a deeper decline to $24.5K (previous high) or even $22.2K (50-week moving average).
In #Ethereum, the 50-week moving average has crossed up from the 200-week moving average, and a price above this crossover would indicate a continuation of the bullish trend.
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#Bitcoin is trading near $26.5K - in the middle of the previous day's trading range and just above the psychologically important 200-week moving average. A break below this level could trigger a deeper decline to $24.5K (previous high) or even $22.2K (50-week moving average).
In #Ethereum, the 50-week moving average has crossed up from the 200-week moving average, and a price above this crossover would indicate a continuation of the bullish trend.
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Dollar index: bearish tech picture vs bullish fundamentals
The dollar index lost about 0.7% on Thursday, briefly bouncing back under 103.3. The dollar's rise against a basket of major currencies stalled late last month and has been trending lower since early June. A situation has developed in which fundamentals are bullish for the dollar, while technical analysis of the medium-term trend favours a decline.
The dollar index lost about 0.7% on Thursday, briefly bouncing back under 103.3. The dollar's rise against a basket of major currencies stalled late last month and has been trending lower since early June. A situation has developed in which fundamentals are bullish for the dollar, while technical analysis of the medium-term trend favours a decline.
The resolution of the debt ceiling problem forces the US Treasury to return to debt markets with placements. Such actions drain liquidity from the financial system and often cause the dollar to strengthen, as investors prefer US government debt to stocks and bonds of many other governments. And the latest announcements from Treasury Secretary Yellen are setting up near-record placements. What makes the situation unprecedented is that the monetary policy has been stimulative in previous episodes of large auctions: a sharp contrast with the 5% key rate and the Fed selling funds off the balance sheet.
Since the beginning of June, the US Treasury has raised a net capital of $139bn. This is a lot, but because of the accumulated pent-up demand and the buffer built up, we have not seen a noticeable pull into the dollar or a significant sell-off in equity markets. But demand will be saturated, and available liquidity will be depleted, which should work to the dollar's advantage and is a headwind for equity and commodity markets.
Since the beginning of June, the US Treasury has raised a net capital of $139bn. This is a lot, but because of the accumulated pent-up demand and the buffer built up, we have not seen a noticeable pull into the dollar or a significant sell-off in equity markets. But demand will be saturated, and available liquidity will be depleted, which should work to the dollar's advantage and is a headwind for equity and commodity markets.
At the same time, the chart picture is still against the dollar. The DXY has been forming a sequence of declining local highs and lows over the past two weeks. It is also easy to see a series of lower peaks on the daily timeframes. Globally, this trend has been in force since last September but has been in the form of a downward channel since December.
In this latest trend, the DXY, having reversed from the upper boundary at the end of May, is now heading towards support below 100.5.
Also in favour of a further decline in the dollar over the next couple of weeks is the return of the RSI from overbought territory, often accompanied by a more substantial pullback.
A bearish "technical" scenario looks quite realistic if the US Treasury does not rush to test the financial system by vacuuming up market liquidity but rather gently probes the ground. There is room for manoeuvre for the US government, as taxes will flow into the Treasury accounts in the coming weeks.
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In this latest trend, the DXY, having reversed from the upper boundary at the end of May, is now heading towards support below 100.5.
Also in favour of a further decline in the dollar over the next couple of weeks is the return of the RSI from overbought territory, often accompanied by a more substantial pullback.
A bearish "technical" scenario looks quite realistic if the US Treasury does not rush to test the financial system by vacuuming up market liquidity but rather gently probes the ground. There is room for manoeuvre for the US government, as taxes will flow into the Treasury accounts in the coming weeks.
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🚗🚀 What’s going on with Tesla Stock?
📈 Tesla's stock soaring 117% year-to-date, outperforming the Global X Autonomous and Electric Vehicles ETF (25.6%) and the S&P 500 index (12.3%).
Here's what's been happening:
1️⃣ Tesla's stock closed at its highest price since October yesterday, thanks to impressive sales growth in China.
2️⃣Tesla and General Motors Co. have announced that GM EV owners will be able to utilise Tesla's fast-charging network starting next year, causing the stock to gain another 4% pre-market.
3️⃣ The full $7,500 federal tax credit now applies to all new Model 3 and Model Y purchases, making them even more enticing.
4️⃣ Tesla is in talks with the government of Valencia in Spain to potentially build a car factory, expanding their footprint and bringing new opportunities.
Past performance is not a reliable indicator of future results. This post is Marketing communication, not recommendation or advice.
📈 Tesla's stock soaring 117% year-to-date, outperforming the Global X Autonomous and Electric Vehicles ETF (25.6%) and the S&P 500 index (12.3%).
Here's what's been happening:
1️⃣ Tesla's stock closed at its highest price since October yesterday, thanks to impressive sales growth in China.
2️⃣Tesla and General Motors Co. have announced that GM EV owners will be able to utilise Tesla's fast-charging network starting next year, causing the stock to gain another 4% pre-market.
3️⃣ The full $7,500 federal tax credit now applies to all new Model 3 and Model Y purchases, making them even more enticing.
4️⃣ Tesla is in talks with the government of Valencia in Spain to potentially build a car factory, expanding their footprint and bringing new opportunities.
Past performance is not a reliable indicator of future results. This post is Marketing communication, not recommendation or advice.
Inflation in China remains worryingly weak, official producer and consumer price data for May confirmed today.
The CPI was up 0.2% y/y last month, only slightly increased from the 0.1% y/y pace in April.
The producer price index shows that the disinflationary trend is continuing. It has been falling year-on-year for the past eight months, accelerating from 3.6% y/y to 4.6% y/y in May. This is the steepest decline in seven years.
Producer prices are a leading indicator of consumer inflation and the overall economy. The latest data confirms the weakness of the world's second-largest economy.
The shallow inflation frees the People’s Bank of China to stimulate the economy further by cutting interest rates or putting pressure on the renminbi.
As a result, USDCNH quickly rebounded from the previous day's pullback to trade back above 7.14, not far from the highs seen since last November.
The CPI was up 0.2% y/y last month, only slightly increased from the 0.1% y/y pace in April.
The producer price index shows that the disinflationary trend is continuing. It has been falling year-on-year for the past eight months, accelerating from 3.6% y/y to 4.6% y/y in May. This is the steepest decline in seven years.
Producer prices are a leading indicator of consumer inflation and the overall economy. The latest data confirms the weakness of the world's second-largest economy.
The shallow inflation frees the People’s Bank of China to stimulate the economy further by cutting interest rates or putting pressure on the renminbi.
As a result, USDCNH quickly rebounded from the previous day's pullback to trade back above 7.14, not far from the highs seen since last November.
#WaveAnalysis
#WTI reversed from resistance level 73.45
Likely to fall to support level 68.00
WTI crude oil recently reversed down from the resistance level 73.45 (which has been steadily reversing the price from the start of May).
The resistance level 73.45 was strengthened by the intersecting 50% Fibonacci correction of the earlier sharp downward impulse wave 1 from the start of April.
WTI crude oil can be expected to fall further toward the next support level 68.00 (low of the Bullish Engulfing from the end of May).
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#WTI reversed from resistance level 73.45
Likely to fall to support level 68.00
WTI crude oil recently reversed down from the resistance level 73.45 (which has been steadily reversing the price from the start of May).
The resistance level 73.45 was strengthened by the intersecting 50% Fibonacci correction of the earlier sharp downward impulse wave 1 from the start of April.
WTI crude oil can be expected to fall further toward the next support level 68.00 (low of the Bullish Engulfing from the end of May).
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#WaveAnalysis
#EURAUD broke key support level 1.6045
Likely to fall to support level 1.5855
EURAUD recently broke the key support level 1.6045 (which stopped the previous minor correction ii at the end of March).
The breakout of the support level 1.6045 accelerated the active downward impulse wave (c), which belongs to the ABC correction 2 from the end of April.
EURAUD can be expected to fall further toward the next support level 1.5855 (target price for the completion of the active impulse wave (c)).
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#EURAUD broke key support level 1.6045
Likely to fall to support level 1.5855
EURAUD recently broke the key support level 1.6045 (which stopped the previous minor correction ii at the end of March).
The breakout of the support level 1.6045 accelerated the active downward impulse wave (c), which belongs to the ABC correction 2 from the end of April.
EURAUD can be expected to fall further toward the next support level 1.5855 (target price for the completion of the active impulse wave (c)).
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According to CoinMarketCap, the total capitalisation of the crypto market fell 7.6% over the week to $1.06 trillion, close to lows not seen since almost mid-March. Adding to the market's nervousness was a sharp sell-off in altcoins.
The biggest demand in such a market is for USDT, as Tether decided to print an additional 1 billion.
#Bitcoin once again briefly acted as a safe haven, temporarily enjoying an influx of buyers as one of the most liquid assets in the sector. At the same time, the technical picture remains bearish. Bitcoin closed the week below its 200-week moving average, which last time out resulted in a 20-week downtrend.
On the daily timeframe, there is little to cheer about as the decline remains within the bearish corridor. However, the final victory of the bears can only be seen in the case of a fix below $25,000, from which BTCUSD bounced over the weekend.
#Ethereum lost 6.5% to $1750. Other leading altcoins from the top 10 lost from 3% (#XRP) to 28% (#Solana) and 22% (#BNB).
The biggest demand in such a market is for USDT, as Tether decided to print an additional 1 billion.
#Bitcoin once again briefly acted as a safe haven, temporarily enjoying an influx of buyers as one of the most liquid assets in the sector. At the same time, the technical picture remains bearish. Bitcoin closed the week below its 200-week moving average, which last time out resulted in a 20-week downtrend.
On the daily timeframe, there is little to cheer about as the decline remains within the bearish corridor. However, the final victory of the bears can only be seen in the case of a fix below $25,000, from which BTCUSD bounced over the weekend.
#Ethereum lost 6.5% to $1750. Other leading altcoins from the top 10 lost from 3% (#XRP) to 28% (#Solana) and 22% (#BNB).
#WaveAnalysis
#Nikkei225 reversed from support level 31600.00
Likely to rise to resistance level 33635.00
Nikkei 225 index recently reversed up from the pivotal support level 31600.00 (which stopped the previous sharp impulse wave (i) at the end of May).
The support level 31600.00 was strengthened by the two intersecting trendlines of the two daily up channels inside which the price has been moving over the last few weeks.
Given the prevailing daily uptrend, Nikkei 225 index can be expected to rise further toward the next resistance level 33635.00 (target price for the completion of the active impulse wave (v)).
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#Nikkei225 reversed from support level 31600.00
Likely to rise to resistance level 33635.00
Nikkei 225 index recently reversed up from the pivotal support level 31600.00 (which stopped the previous sharp impulse wave (i) at the end of May).
The support level 31600.00 was strengthened by the two intersecting trendlines of the two daily up channels inside which the price has been moving over the last few weeks.
Given the prevailing daily uptrend, Nikkei 225 index can be expected to rise further toward the next resistance level 33635.00 (target price for the completion of the active impulse wave (v)).
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#WaveAnalysis
#EURGBP reversed from support level 0.8550
Likely to rise to resistance level 0.8650
EURGBP currency pair recently reversed up from the key support level 0.8550 (former multi-month low from December).
The support level 0.8550 was strengthened by the support trendline of the daily down channel from February and by the lower daily Bollinger Band.
Given the oversold daily Stochastic, EURGBP can be expected to rise further toward the next resistance level 0.8650 (top of the previous correction (ii)).
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#EURGBP reversed from support level 0.8550
Likely to rise to resistance level 0.8650
EURGBP currency pair recently reversed up from the key support level 0.8550 (former multi-month low from December).
The support level 0.8550 was strengthened by the support trendline of the daily down channel from February and by the lower daily Bollinger Band.
Given the oversold daily Stochastic, EURGBP can be expected to rise further toward the next resistance level 0.8650 (top of the previous correction (ii)).
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The crypto market cap rose 1% in 24 hours to $1.06 trillion. Bitcoin adds 1%, while #Ethereum just 0.4%. Meanwhile, the top altcoins try to recover some losses, adding between 0.2% (#Cardano) and 4% (#BNB). The cryptocurrency Fear & Greed Index is in the Fear territory at 45 (-2 points overnight), whereas the Fear & Greed index for the stock market is at 79 (extreme greed).
#Bitcoin is struggling for a third day to hold above $26K. This struggle away from meaningful technical levels shows how heavy the crypto market is right now, despite optimism in equities and a slightly decreased USD rate. Technically, to break the downtrend, Bitcoin needs to overcome $27K, and a drop below $26.5K is required to confirm the downtrend. The second scenario seems more likely.
According to CoinShares, investments in crypto funds fell by $88 million last week, the most in three months and the eighth consecutive week of outflows. Bitcoin fell by $52 million and Ethereum by $36 million.
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#Bitcoin is struggling for a third day to hold above $26K. This struggle away from meaningful technical levels shows how heavy the crypto market is right now, despite optimism in equities and a slightly decreased USD rate. Technically, to break the downtrend, Bitcoin needs to overcome $27K, and a drop below $26.5K is required to confirm the downtrend. The second scenario seems more likely.
According to CoinShares, investments in crypto funds fell by $88 million last week, the most in three months and the eighth consecutive week of outflows. Bitcoin fell by $52 million and Ethereum by $36 million.
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Worrying oil weakness against the news
Oil lost more than 4% since the start of Monday, retesting the lower end of its range for the last three months. WTI briefly traded below $67.0 and Brent below $72.
On Tuesday, oil is enjoying buying at the lower end of the range, gaining more than 1.5% since the start of the day. However, there are big questions about whether the current rally can gain traction.
Over the past three months, oil has repeatedly found itself close to current levels, from which it has bounced on technical factors (accumulated local oversold conditions) and several announcements of production cuts by OPEC+ members.
Oil lost more than 4% since the start of Monday, retesting the lower end of its range for the last three months. WTI briefly traded below $67.0 and Brent below $72.
On Tuesday, oil is enjoying buying at the lower end of the range, gaining more than 1.5% since the start of the day. However, there are big questions about whether the current rally can gain traction.
Over the past three months, oil has repeatedly found itself close to current levels, from which it has bounced on technical factors (accumulated local oversold conditions) and several announcements of production cuts by OPEC+ members.
Notably, the current sell-off in oil is going against the news. Prices peaked locally shortly after Saudi Arabia announced a voluntary production cut of 1m BPD and Russia's plans to cut production from next year.
In addition, the US government announced at the end of last week that it would begin buying oil for the Strategic Petroleum Reserve. According to Baker Hughes data released on Friday, the number of active rigs (oil + gas) fell by a further 1 to 695.
More interestingly, the sharp fall in oil prices since mid-April has been accompanied by impressive demand for equities on the back of strong macro data.
In addition, the US government announced at the end of last week that it would begin buying oil for the Strategic Petroleum Reserve. According to Baker Hughes data released on Friday, the number of active rigs (oil + gas) fell by a further 1 to 695.
More interestingly, the sharp fall in oil prices since mid-April has been accompanied by impressive demand for equities on the back of strong macro data.
It is no coincidence that OPEC+ is so strongly defending current levels. The $65 area has acted as an important mode switch for oil. A break below triggered a bullish capitulation that halved the price before a steady move higher in 2008, 2014 and 2020. The ability to hold higher triggered a rally that doubled the price in 2007, 2010 and 2021.
The fact that the 200-week moving average is being fought over adds to the epochal nature of the current battle between the bulls and bears. And the persistent, repeated attempts to break below this line since February is more of a bearish signal. Graphically, it looks more like what we saw in 2008. And that is an argument for oil to head towards $30 now, although it would still be prudent to wait for consolidation below $60 to gain more confidence in a downside move.
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The fact that the 200-week moving average is being fought over adds to the epochal nature of the current battle between the bulls and bears. And the persistent, repeated attempts to break below this line since February is more of a bearish signal. Graphically, it looks more like what we saw in 2008. And that is an argument for oil to head towards $30 now, although it would still be prudent to wait for consolidation below $60 to gain more confidence in a downside move.
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US Core Inflation could cause Fed concern
US consumer inflation slowed to 4.0% y/y in May from 4.9% y/y. The monthly gain was 0.1%. In both cases, the data was 0.1 percentage point weaker than expected, marking a slightly faster decline in the inflation problem than expected.
By and large, inflation has returned to normal due to energy and food, which are not only no longer contributing positively to price increases but are pulling them down.
US consumer inflation slowed to 4.0% y/y in May from 4.9% y/y. The monthly gain was 0.1%. In both cases, the data was 0.1 percentage point weaker than expected, marking a slightly faster decline in the inflation problem than expected.
By and large, inflation has returned to normal due to energy and food, which are not only no longer contributing positively to price increases but are pulling them down.
The core CPI (excluding food and energy) added 5.3% y/y against 5.5% y/y. However, there is an elevated pace of month-on-month price growth, which could soon be a stumbling block for the markets.
So far, rate rises have not caused enough of a cooling of the economy and labour market that this would reduce domestic price pressures. The current monthly rate of increase of the core index has been observed in the second half of the 1980s, bringing the overall inflation rate to around 4%, which is half the peak but twice the target.
On the other hand, given the lag effect in monetary policy, the Fed may still announce a "monetary regime change", i.e., a signal that rates have peaked, and easing will follow a pause, the duration of which will be determined by economic data.
On the balance sheet, we have a contradictory inflation report, and it will be up to the Fed to determine the further direction of the stock indices and the dollar at tomorrow's meeting.
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So far, rate rises have not caused enough of a cooling of the economy and labour market that this would reduce domestic price pressures. The current monthly rate of increase of the core index has been observed in the second half of the 1980s, bringing the overall inflation rate to around 4%, which is half the peak but twice the target.
On the other hand, given the lag effect in monetary policy, the Fed may still announce a "monetary regime change", i.e., a signal that rates have peaked, and easing will follow a pause, the duration of which will be determined by economic data.
On the balance sheet, we have a contradictory inflation report, and it will be up to the Fed to determine the further direction of the stock indices and the dollar at tomorrow's meeting.
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What will be the signal tomorrow from FOMC?
Anonymous Poll
70%
ready for more hikes
30%
changes the policy regime