The Nasdaq-100, which lost around 2.2% on Thursday, also suffered a heavy sell-off as it touched its 50-day moving average. The index also fell out of its bullish corridor for the second time this year. If the severity of high interest rates is indeed becoming a market driver, then growth stocks look the most vulnerable. If this is the case, it makes sense to expect a deeper correction in the Nasdaq, which could take the index as low as 13300, with a chance of an earlier stop in the 13700-14000 area.
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#WaveAnalysis
#CHFJPY reverses from support level 164.30
Likely to rise to resistance level 166.60
CHFJPY currency pair earlier reversed up from the support level 164.30 (former resistance that stopped the previous impulse wave 1 at the start of August).
The support level 164.30 was strengthened by the nearby 20-day moving average and by the support trendline of the daily up channel from March.
Given the strong daily uptrend, CHFJPY can be expected to rise further to the next resistance level 166.60 (which reversed the pair earlier this month).
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#CHFJPY reverses from support level 164.30
Likely to rise to resistance level 166.60
CHFJPY currency pair earlier reversed up from the support level 164.30 (former resistance that stopped the previous impulse wave 1 at the start of August).
The support level 164.30 was strengthened by the nearby 20-day moving average and by the support trendline of the daily up channel from March.
Given the strong daily uptrend, CHFJPY can be expected to rise further to the next resistance level 166.60 (which reversed the pair earlier this month).
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#WaveAnalysis
#USDCAD reverses from support at 1.3500
Likely to rise to resistance level 1.3650
USDCAD recently bounced back from the support level 1.3500 (former resistance that stopped the previous impulse wave (i) at the start of August).
The pair had previously broken the daily descending channel from March, which accelerated the active short-term impulse wave 3 of the intermediate impulse wave (C) from July.
Given the strong gains in the USD, USDCAD is expected to continue rising towards the next resistance level of 1.3650 (which reversed the previous waves B and ii, the target for the completion of the active impulse wave 3).
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#USDCAD reverses from support at 1.3500
Likely to rise to resistance level 1.3650
USDCAD recently bounced back from the support level 1.3500 (former resistance that stopped the previous impulse wave (i) at the start of August).
The pair had previously broken the daily descending channel from March, which accelerated the active short-term impulse wave 3 of the intermediate impulse wave (C) from July.
Given the strong gains in the USD, USDCAD is expected to continue rising towards the next resistance level of 1.3650 (which reversed the previous waves B and ii, the target for the completion of the active impulse wave 3).
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#WaveAnalysis #COST
Costco falling inside impulse wave i
– Likely to reach support level 520.00
Costco continues to fall inside the impulse wave i of the weekly impulse wave (C), which started earlier from the major resistance level 564.00.
The resistance level 564.00 was strengthened by the upper weekly Bollinger Band and the upper resistance trendline of the weekly up channel from the start of this year.
Given the still overbought weekly Stochastic, Costco can be expected to fall further to the next support level 520.00 (former resistance from January).
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Costco falling inside impulse wave i
– Likely to reach support level 520.00
Costco continues to fall inside the impulse wave i of the weekly impulse wave (C), which started earlier from the major resistance level 564.00.
The resistance level 564.00 was strengthened by the upper weekly Bollinger Band and the upper resistance trendline of the weekly up channel from the start of this year.
Given the still overbought weekly Stochastic, Costco can be expected to fall further to the next support level 520.00 (former resistance from January).
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Despite a mid-week spike in volatility, the cryptocurrency market remained virtually unchanged from the previous week's capitalisation level, hovering around $1.050 trillion (-1% in 7 days). Bitcoin's decline was a negligible 0.7%, while altcoins suffered losses of around 2%.
The technical picture for Bitcoin remains bearish on weekly timeframes, as the price is below its 200-week average and outside of its ascending channel. The most likely short-term outlook is for a decline to the $23.9-24.6K region, with the lower boundary being the 50-week average and the upper one being the pivot area from last August.
According to Santiment, large investors continue to accumulate positions. The number of wallets with balances between 10 and 10,000 BTC totalled 156,600, and these accounts have accumulated $308.6 million since the 17th of August.
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The technical picture for Bitcoin remains bearish on weekly timeframes, as the price is below its 200-week average and outside of its ascending channel. The most likely short-term outlook is for a decline to the $23.9-24.6K region, with the lower boundary being the 50-week average and the upper one being the pivot area from last August.
According to Santiment, large investors continue to accumulate positions. The number of wallets with balances between 10 and 10,000 BTC totalled 156,600, and these accounts have accumulated $308.6 million since the 17th of August.
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The dollar cleared the way up but is short-term overbought
Have the dollar bulls finally won, or do the sellers still have a chance? The answer may not come until later in the week.
The dollar index finished with growth for the sixth week in a row, climbing on Friday to its highest since March and trading above 104.
The dollar formally broke a multi-month downtrend by climbing above the May highs. The trend breakdown is also indicated by the fact that the DXY last week rebounded solidly from the 200-day moving average and the previous resistance line of the descending channel.
Also, the 50-day moving average reversed to the upside last week, providing further evidence of a bullish trend reversal.
Have the dollar bulls finally won, or do the sellers still have a chance? The answer may not come until later in the week.
The dollar index finished with growth for the sixth week in a row, climbing on Friday to its highest since March and trading above 104.
The dollar formally broke a multi-month downtrend by climbing above the May highs. The trend breakdown is also indicated by the fact that the DXY last week rebounded solidly from the 200-day moving average and the previous resistance line of the descending channel.
Also, the 50-day moving average reversed to the upside last week, providing further evidence of a bullish trend reversal.
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The multi-week dollar rally created certain risks of a short-term correction, as the RSI index entered the overbought area, exceeding 70 on daily intervals. During the dollar's rally in the first nine months of last year, the dollar was running out of steam after entering overbought territory, but it could take anywhere from a week to three weeks.
If the dollar correction starts, the index may roll back to 102.1-102.4 from current levels, clearing the way for a new growth impulse.
If one looks beyond the short-term moves, the latest rise cleared the way for the dollar to make more critical highs near 105.3 before the end of the quarter. The DXY can return to 107.5 in the longer term, last seen back in November.
Speeches at Jackson Hole last week failed to stoke the fire of volatility in the markets, and now a meaningful trigger won't come until Friday in the form of the monthly labour market report.
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If the dollar correction starts, the index may roll back to 102.1-102.4 from current levels, clearing the way for a new growth impulse.
If one looks beyond the short-term moves, the latest rise cleared the way for the dollar to make more critical highs near 105.3 before the end of the quarter. The DXY can return to 107.5 in the longer term, last seen back in November.
Speeches at Jackson Hole last week failed to stoke the fire of volatility in the markets, and now a meaningful trigger won't come until Friday in the form of the monthly labour market report.
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#WaveAnalysis
#AUDUSD reversed from the support level 0.6400
Likely to rise to resistance level 0.6500
AUDUSD currency pair recently reversed up from the support level 0.6400, which has been reversing the pair since last November.
The support level 0.6400 was strengthened by the nearby lower daily Bollinger Band and the support trendline of the wide down channel from February.
Given the strength of the support level 0.6400, AUDUSD currency pair can be expected to rise further toward the next resistance level 0.6500 (former multi-month support from May).
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#AUDUSD reversed from the support level 0.6400
Likely to rise to resistance level 0.6500
AUDUSD currency pair recently reversed up from the support level 0.6400, which has been reversing the pair since last November.
The support level 0.6400 was strengthened by the nearby lower daily Bollinger Band and the support trendline of the wide down channel from February.
Given the strength of the support level 0.6400, AUDUSD currency pair can be expected to rise further toward the next resistance level 0.6500 (former multi-month support from May).
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#WaveAnalysis
#GBPJPY reversed from key support level 183.65
Likely to test resistance level 186.00
GBPJPY currency pair recently reversed up from the key support level 183.65, which reversed the pair in June and July.
The upward reversal from the support level 183.65 stopped the earlier short-term correction ii.
Given the clear daily uptrend, GBPJPY currency pair can be expected to rise further toward the next resistance level 186.00 (which reversed the pair earlier this month).
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#GBPJPY reversed from key support level 183.65
Likely to test resistance level 186.00
GBPJPY currency pair recently reversed up from the key support level 183.65, which reversed the pair in June and July.
The upward reversal from the support level 183.65 stopped the earlier short-term correction ii.
Given the clear daily uptrend, GBPJPY currency pair can be expected to rise further toward the next resistance level 186.00 (which reversed the pair earlier this month).
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The crypto market continues to trade in a 0.3% range around the $1.05 trillion capitalisation level. Despite some improvement in risk sentiment, sellers got the upper hand on the approach of the 1.06 trillion level.
The narrow range has also become a hallmark of Bitcoin, which has been walking on a short leash of around $26K for the past eleven days. Such a lull usually ends with a boom in volatility, which is what we should expect this week.
Bitcoin's tera hash profit margin has reached historic lows as the price has fallen, and the network's hash rate has risen as more efficient ASICs went to work. Without a rise in the BTC exchange rate, miners' operations will soon become unprofitable.
The narrow range has also become a hallmark of Bitcoin, which has been walking on a short leash of around $26K for the past eleven days. Such a lull usually ends with a boom in volatility, which is what we should expect this week.
Bitcoin's tera hash profit margin has reached historic lows as the price has fallen, and the network's hash rate has risen as more efficient ASICs went to work. Without a rise in the BTC exchange rate, miners' operations will soon become unprofitable.
🤩Introducing a New Stock: VinFast - The Rising Star in EV Industry 🚘
We are excited to introduce a new addition to our stock offerings - Vietnamese electric vehicle (EV) manufacturer VinFast. This emerging player has captured the market's attention by achieving a remarkable feat on its debut trading day - surpassing the valuations of industry giants Ford and General Motors (GM).
VinFast's bold business model is centred around becoming a global disruptor in the EV market. Their strategic approach has already manifested in impressive production capacity growth. Despite not yet being profitable, VinFast's shares closed above $37 in their recent New York debut, elevating the company's stock market valuation to an impressive $85 billion.
This valuation places VinFast well ahead of established industry players Ford ($48 billion) and GM ($46 billion). As the electric vehicle market experiences a surge in competition, with established giants and innovative newcomers vying for a share, VinFast's rise signals a noteworthy shift.
Interestingly, VinFast's main competitor is none other than Tesla. This raises an intriguing question: how will VinFast's trajectory compare to the EV pioneer? As an investor, you have the opportunity to analyse this market development and decide whether you see VinFast as a buying or selling opportunity.
More information and trading conditions can be found here: https://www.fxpro.com/trading/shares/vfso
We are excited to introduce a new addition to our stock offerings - Vietnamese electric vehicle (EV) manufacturer VinFast. This emerging player has captured the market's attention by achieving a remarkable feat on its debut trading day - surpassing the valuations of industry giants Ford and General Motors (GM).
VinFast's bold business model is centred around becoming a global disruptor in the EV market. Their strategic approach has already manifested in impressive production capacity growth. Despite not yet being profitable, VinFast's shares closed above $37 in their recent New York debut, elevating the company's stock market valuation to an impressive $85 billion.
This valuation places VinFast well ahead of established industry players Ford ($48 billion) and GM ($46 billion). As the electric vehicle market experiences a surge in competition, with established giants and innovative newcomers vying for a share, VinFast's rise signals a noteworthy shift.
Interestingly, VinFast's main competitor is none other than Tesla. This raises an intriguing question: how will VinFast's trajectory compare to the EV pioneer? As an investor, you have the opportunity to analyse this market development and decide whether you see VinFast as a buying or selling opportunity.
More information and trading conditions can be found here: https://www.fxpro.com/trading/shares/vfso
Gold is probably ending a short-term bounce
#Gold's rally appears to be running out of steam after a 2% rally since the beginning of last week.
Gold has been at the mercy of sellers for a month since the 20th, losing over 5.2% from peak to trough. Gold began to look oversold in the short term after falling below $1885.
The price fell below the 50-day and then the 200-day moving averages in August. The rally in recent days has brought the price back above the long moving average, but the short moving average is effectively acting as resistance. The last time we saw this dynamic was in May last year, followed by five months of declines before a reversal to the upside.
The situation could repeat itself this time around. At the end of last week, the rally slowed considerably, and since the start of the day on Tuesday, gold is down 0.2%, having fallen to $1915 an ounce in the spot market.
#Gold's rally appears to be running out of steam after a 2% rally since the beginning of last week.
Gold has been at the mercy of sellers for a month since the 20th, losing over 5.2% from peak to trough. Gold began to look oversold in the short term after falling below $1885.
The price fell below the 50-day and then the 200-day moving averages in August. The rally in recent days has brought the price back above the long moving average, but the short moving average is effectively acting as resistance. The last time we saw this dynamic was in May last year, followed by five months of declines before a reversal to the upside.
The situation could repeat itself this time around. At the end of last week, the rally slowed considerably, and since the start of the day on Tuesday, gold is down 0.2%, having fallen to $1915 an ounce in the spot market.
The rally since the beginning of last week fits into the Fibonacci pattern, having lost upward momentum as it approached the 61.8% retracement of the initial drop.
Confidence in gold's further decline will be boosted by a quick return below the 200-day average, now above $1910. The final confirmation of this pattern would be a return to August's local lows at $1885, opening the way to $1820.
Separately, it is worth noting that gold has temporarily returned to a direct correlation with the equity market. In contrast, in the spring of this year and last, it was the other way round: equity sell-offs were accompanied by frenzied gold buying.
Last year, it was geopolitics, and this spring, it was fears about bank capital retention. The latter has fallen off the radar but is hardly exhausted, and it would not be surprising to see it back on the front pages of the financial press in September-October. This could be an essential pivot point for growth for gold, but no earlier.
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Confidence in gold's further decline will be boosted by a quick return below the 200-day average, now above $1910. The final confirmation of this pattern would be a return to August's local lows at $1885, opening the way to $1820.
Separately, it is worth noting that gold has temporarily returned to a direct correlation with the equity market. In contrast, in the spring of this year and last, it was the other way round: equity sell-offs were accompanied by frenzied gold buying.
Last year, it was geopolitics, and this spring, it was fears about bank capital retention. The latter has fallen off the radar but is hardly exhausted, and it would not be surprising to see it back on the front pages of the financial press in September-October. This could be an essential pivot point for growth for gold, but no earlier.
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#WaveAnalysis
#USDCHF reversed from pivotal resistance level 0.8830
Likely to fall to support level 0.8750
USDCHF currency pair recently reversed down from the pivotal resistance level 0.8830 (former multi-month low from May), intersecting with the upper daily Bollinger Band and the 50% Fibonacci correction of the downward impulse from May.
The resistance level 0.8830 was further strengthened by the resistance trendline of the wide daily down channel from the start of May.
Given the clear daily downtrend, USDCHF currency pair can be expected to fall further toward the next support level 0.8750.
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#USDCHF reversed from pivotal resistance level 0.8830
Likely to fall to support level 0.8750
USDCHF currency pair recently reversed down from the pivotal resistance level 0.8830 (former multi-month low from May), intersecting with the upper daily Bollinger Band and the 50% Fibonacci correction of the downward impulse from May.
The resistance level 0.8830 was further strengthened by the resistance trendline of the wide daily down channel from the start of May.
Given the clear daily downtrend, USDCHF currency pair can be expected to fall further toward the next support level 0.8750.
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#WaveAnalysis
#EURGBP broke resistance level 0.8590
Likely to test resistance level 0.8655
EURGBP currency pair recently broke above key resistance level 0.8590, intersecting with the 61.8% Fibonacci correction of the downward impulse from the start of August.
The breakout of the resistance level 0.8590 accelerated the active short-term correction ii.
Given the strong sterling sales across the FX markets, EURGBP currency pair can be expected to rise further toward the next resistance level 0.8655 , which has been reversing the pair since June.
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#EURGBP broke resistance level 0.8590
Likely to test resistance level 0.8655
EURGBP currency pair recently broke above key resistance level 0.8590, intersecting with the 61.8% Fibonacci correction of the downward impulse from the start of August.
The breakout of the resistance level 0.8590 accelerated the active short-term correction ii.
Given the strong sterling sales across the FX markets, EURGBP currency pair can be expected to rise further toward the next resistance level 0.8655 , which has been reversing the pair since June.
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As expected, the constricted crypto market is a compressed spring, which means more volatility ahead, not a lack of interest. On Tuesday, #Bitcoin jumped above $28.3K, adding over 2K in less than a couple of hours, on news that a US court had granted Grayscale Investments' motion in its case against the SEC.
In June, Grayscale, an investment management company, sued the regulator for refusing to convert its flagship GBTC trust into a bitcoin ETF. An appeals court ordered the SEC to reconsider its decision.
On Wednesday morning, Bitcoin pulled back to $27.4K, close to the 200-day and 200-week moving averages. The real battle for the long-term trend has just begun, and the next few days could provide a crucial signal for weeks and months ahead.
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In June, Grayscale, an investment management company, sued the regulator for refusing to convert its flagship GBTC trust into a bitcoin ETF. An appeals court ordered the SEC to reconsider its decision.
On Wednesday morning, Bitcoin pulled back to $27.4K, close to the 200-day and 200-week moving averages. The real battle for the long-term trend has just begun, and the next few days could provide a crucial signal for weeks and months ahead.
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Weak data a poor driver for stock rally
Financial markets have staged an impressive rally across a broad range of instruments. This is an essential signal that risk appetite improves after about a month of correction. But based on the idea that "the worse, the better", such a rally could be a trap.
Sentiment in the US equity market improved markedly on Tuesday after a cocktail of economic data was released. The Consumer Confidence Index fell from 114 to 106.1 in August, instead of the expected rise to 116. The number of job openings fell to 8.827 million in July, the lowest since April 2021, as demand for remote work cooled and the overall labour market saturated. At the same time, an increase to 9.5 million was expected.
The reports showed the economy slowing under the weight of interest rates at a time when markets are used to stronger-than-expected data. In the wake of the releases, expectations of a quick reversal in Fed policy and that we will see no further tightening were slightly reinforced.
Financial markets have staged an impressive rally across a broad range of instruments. This is an essential signal that risk appetite improves after about a month of correction. But based on the idea that "the worse, the better", such a rally could be a trap.
Sentiment in the US equity market improved markedly on Tuesday after a cocktail of economic data was released. The Consumer Confidence Index fell from 114 to 106.1 in August, instead of the expected rise to 116. The number of job openings fell to 8.827 million in July, the lowest since April 2021, as demand for remote work cooled and the overall labour market saturated. At the same time, an increase to 9.5 million was expected.
The reports showed the economy slowing under the weight of interest rates at a time when markets are used to stronger-than-expected data. In the wake of the releases, expectations of a quick reversal in Fed policy and that we will see no further tightening were slightly reinforced.
This is a bold expectation and contrasts with the overtly hawkish rhetoric of most FOMC members in recent days. A year ago in Jackson Hole, Powell called for pain to be endured to fight inflation. But that moment seems to have arrived only now. The thick layer of stimulus money easily explains the delay that households and businesses have accumulated throughout the pandemic. Government spending has remained high, with the US running a record budget deficit.
This does not look like a solid foundation for economic growth, and the joy of anticipating a soft Fed policy tends to be replaced by a quick realisation of the gravity of falling incomes.
Most surprisingly, the one-and-a-half per cent rally in the S&P500 was triggered by a change in the probability of a November rate hike from 62.2% to 50.7%. This compares with 42.2% a week ago.
This does not look like a solid foundation for economic growth, and the joy of anticipating a soft Fed policy tends to be replaced by a quick realisation of the gravity of falling incomes.
Most surprisingly, the one-and-a-half per cent rally in the S&P500 was triggered by a change in the probability of a November rate hike from 62.2% to 50.7%. This compares with 42.2% a week ago.
In the short term, traders will likely focus on the S&P500's momentum near the 50-day moving average at 4465, which the index crossed yesterday, on its way to the 4500 level. The ability to extend the advance will signal bullish dominance in the markets. A move below 4450 would suggest we saw a false breakout on Tuesday.
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Inflation remains a driver of European financial markets, and the latest estimates point to stubbornly high consumer prices in Germany despite a continued fall in import prices.
The German import price index fell by 0.6 per cent in July, the tenth consecutive month of decline. In the same month a year earlier, the fall was 13.2%. The figure was 0.3 percentage points lower than expected, which could act as an early indicator of a fall in headline inflation and reduce the chances of further tightening by the ECB.
However, preliminary estimates of consumer inflation for August later in the day showed an acceleration in Germany and Spain, setting up a robust CPI for the whole eurozone, which will be released on Thursday.
German consumer prices were around 6.1% higher in August than a year earlier, after three consecutive months of 0.3% increases. Consumer inflation in the eurozone’s largest economy has not fallen since May, although other price indices have moved into negative territory.
The German import price index fell by 0.6 per cent in July, the tenth consecutive month of decline. In the same month a year earlier, the fall was 13.2%. The figure was 0.3 percentage points lower than expected, which could act as an early indicator of a fall in headline inflation and reduce the chances of further tightening by the ECB.
However, preliminary estimates of consumer inflation for August later in the day showed an acceleration in Germany and Spain, setting up a robust CPI for the whole eurozone, which will be released on Thursday.
German consumer prices were around 6.1% higher in August than a year earlier, after three consecutive months of 0.3% increases. Consumer inflation in the eurozone’s largest economy has not fallen since May, although other price indices have moved into negative territory.