US Existing Home Sales have continued to fall under the pressure of high interest rates despite prices retreating from their highs.
It is well known that the housing market is a leading indicator of the economic cycle. This was the case during the global financial crisis. However, this approach may need to be revised this time around.
In October, secondary market sales fell by 4.1% to 3.79 million at an annualised rate. Sales have fallen in seven of the last eight months. That's only 9% below the market's low in July 2010. But in that period, the unemployment rate was near 9.5% (near the cyclical peak), as opposed to the current 3.9% (near the cyclical trough).
Inventories of unsold homes are at 3.6 months at the current pace. While this is the highest level since June 2020, it is more attributable to lower sales, as nominal inventories are at a one-year high of 1.15 million homes, which is not a meaningful increase.
It is well known that the housing market is a leading indicator of the economic cycle. This was the case during the global financial crisis. However, this approach may need to be revised this time around.
In October, secondary market sales fell by 4.1% to 3.79 million at an annualised rate. Sales have fallen in seven of the last eight months. That's only 9% below the market's low in July 2010. But in that period, the unemployment rate was near 9.5% (near the cyclical peak), as opposed to the current 3.9% (near the cyclical trough).
Inventories of unsold homes are at 3.6 months at the current pace. While this is the highest level since June 2020, it is more attributable to lower sales, as nominal inventories are at a one-year high of 1.15 million homes, which is not a meaningful increase.
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The median home sale price fell 4.4 per cent to $391.8k, down from a peak of $410k in July.
It's a very different picture in the new home market, where median prices are falling faster, down 15.7% from their peak. At the same time, the number of homes sold has been rising for more than a year. This means that people are moving into newer, arguably simpler housing.
For the financial market, the dip in secondary market sales isn't as bad a sign as the headlines might suggest but instead reflects a temporary change in buyer preferences. A further fall in secondary market prices could be a wake-up call, where a further 10% fall from current levels could trigger a wave of mortgage defaults and cause problems for the banks, as was the case in 2007-2008.
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It's a very different picture in the new home market, where median prices are falling faster, down 15.7% from their peak. At the same time, the number of homes sold has been rising for more than a year. This means that people are moving into newer, arguably simpler housing.
For the financial market, the dip in secondary market sales isn't as bad a sign as the headlines might suggest but instead reflects a temporary change in buyer preferences. A further fall in secondary market prices could be a wake-up call, where a further 10% fall from current levels could trigger a wave of mortgage defaults and cause problems for the banks, as was the case in 2007-2008.
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#WaveAnalysis
#USDJPY reversed from key support level 147.55
Likely to rise to resistance level 152.00,
USDJPY currency pair recently reversed up from the key support level 147.55 (which has been supporting the price from September) intersecting with the 61.8% Fibonacci correction of the upward impulse from August.
The upward reversal from the support level 147.55 is currently forming the daily Morning Star candlesticks reversal pattern, which stopped the earlier minor correction ii.
Given the predominant daily uptrend, USDJPY currency pair can be expected to rise further to the next resistance level 152.00, which stopped the previous waves iii and i.
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#USDJPY reversed from key support level 147.55
Likely to rise to resistance level 152.00,
USDJPY currency pair recently reversed up from the key support level 147.55 (which has been supporting the price from September) intersecting with the 61.8% Fibonacci correction of the upward impulse from August.
The upward reversal from the support level 147.55 is currently forming the daily Morning Star candlesticks reversal pattern, which stopped the earlier minor correction ii.
Given the predominant daily uptrend, USDJPY currency pair can be expected to rise further to the next resistance level 152.00, which stopped the previous waves iii and i.
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#WaveAnalysis
#EURCHF reversed from resistance level 0.9670
Likely to fall to support level 0.9600
EURCHF currency pair recently reversed down from the strong resistance level 0.9670 (former strong support from May, which has been repeatedly reversing the pair from July) intersecting with the 61.8% Fibonacci correction of the downward impulse from June
The downward reversal from the resistance level 0.9670 created the daily Evening Star, which stopped the earlier correction 2.
Given the clear daily downtrend, EURCHF currency pair can be expected to fall further to the next support level 0.9600, low of the previous correction b.
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#EURCHF reversed from resistance level 0.9670
Likely to fall to support level 0.9600
EURCHF currency pair recently reversed down from the strong resistance level 0.9670 (former strong support from May, which has been repeatedly reversing the pair from July) intersecting with the 61.8% Fibonacci correction of the downward impulse from June
The downward reversal from the resistance level 0.9670 created the daily Evening Star, which stopped the earlier correction 2.
Given the clear daily downtrend, EURCHF currency pair can be expected to fall further to the next support level 0.9600, low of the previous correction b.
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#Bitcoin bounces around in an ascending channel, hitting its three-week upper resistance of $37.8K on Wednesday evening. An intensifying sell-off thwarts attempts to heat the price, but the pullbacks have become less deep over the past three weeks, suggesting the building up of bullish sentiment. At the same time, this relative stabilisation in the range removes local overbought conditions, allowing to stick to gains of the previous advance. A break of resistance could see a quick rise above $40K.
#XRP received buyers' support on Wednesday after touching the 50-day moving average, giving it a chance to stabilise after a pullback of more than 20% from its early November peak.
However, the buying of #Ethereum on its dip below $2,000 on Wednesday was more notable. Active buying in the world's second most-capitalised coin took the price back to $2060, near the top of the range since the 10th of November.
#XRP received buyers' support on Wednesday after touching the 50-day moving average, giving it a chance to stabilise after a pullback of more than 20% from its early November peak.
However, the buying of #Ethereum on its dip below $2,000 on Wednesday was more notable. Active buying in the world's second most-capitalised coin took the price back to $2060, near the top of the range since the 10th of November.
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The last two weeks have been hectic for oil traders, who have had a rich extract of news and data from many directions, fuelling volatility but leaving the price at the same level as a fortnight ago.
The fresh weekly EIA report marked another week of impressive growth in commercial inventories. They rose by 8.7m barrels for the week and 28.3m in five weeks of steady growth, and the current level is 3.8% higher than the same week a year ago. Meanwhile, the production rate of 13.2m bpd has been maintained for seven weeks. This appears sufficient for a small surplus, allowing to gradually rebuild inventories that have fallen over the past two years.
The fresh weekly EIA report marked another week of impressive growth in commercial inventories. They rose by 8.7m barrels for the week and 28.3m in five weeks of steady growth, and the current level is 3.8% higher than the same week a year ago. Meanwhile, the production rate of 13.2m bpd has been maintained for seven weeks. This appears sufficient for a small surplus, allowing to gradually rebuild inventories that have fallen over the past two years.
From a peak at the end of September, oil lost over 20% to last week's lows on demand concerns and reports that OPEC+ supply was higher than previously estimated.
As a result of this downturn, the price of oil has returned to sensitive territory for the cartel, which yesterday announced the postponement of its scheduled meeting from 26th to 30th November. No changes to quotas were expected from the summit and monitoring committee meeting, but the postponement has raised the issue of solid opposition among OPEC members.
News of the postponement initially wiped over 5% off the intraday price, with WTI dropping to below $74.0 and Brent to $78.5 at one point, but prices soon returned to $76.5 and $81.5, respectively. The postponement of the meeting opens up the possibility that Saudi Arabia could push through voluntary cuts from other cartel members to reverse the trend.
As a result of this downturn, the price of oil has returned to sensitive territory for the cartel, which yesterday announced the postponement of its scheduled meeting from 26th to 30th November. No changes to quotas were expected from the summit and monitoring committee meeting, but the postponement has raised the issue of solid opposition among OPEC members.
News of the postponement initially wiped over 5% off the intraday price, with WTI dropping to below $74.0 and Brent to $78.5 at one point, but prices soon returned to $76.5 and $81.5, respectively. The postponement of the meeting opens up the possibility that Saudi Arabia could push through voluntary cuts from other cartel members to reverse the trend.
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Technical indicators also point to a battle for the trend in recent days.
The Bears have the 200-day average on their side. In early November, oil fell well below it. Two attempts to get back above it were met with waves of selling in WTI and Brent.
On the Bulls' side, the downward momentum is waning. The Relative Strength Index on the daily chart shows a series of higher local lows despite lower local price lows. This divergence suggests that the bearish momentum has run its course, and the potential for a rebound or even a reversal to growth is building.
A sign of a reversal in the uptrend would be the ability of the price to return consistently above its 200-day moving average, which is close to $78 for WTI and $82 for Brent. However, it is prudent to remain on the sidelines until we get signals from OPEC+ officials, of which there could be many in the coming days.
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The Bears have the 200-day average on their side. In early November, oil fell well below it. Two attempts to get back above it were met with waves of selling in WTI and Brent.
On the Bulls' side, the downward momentum is waning. The Relative Strength Index on the daily chart shows a series of higher local lows despite lower local price lows. This divergence suggests that the bearish momentum has run its course, and the potential for a rebound or even a reversal to growth is building.
A sign of a reversal in the uptrend would be the ability of the price to return consistently above its 200-day moving average, which is close to $78 for WTI and $82 for Brent. However, it is prudent to remain on the sidelines until we get signals from OPEC+ officials, of which there could be many in the coming days.
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#WaveAnalysis #DJI
Dow Jones broke key resistance level 35000.
Likely to rise to resistance level 3565.00
Dow Jones index recently broke the key resistance level 35000.00 (which has been reversing the price from the start of September).
The breakout of the resistance level 35000.00 accelerated the active minor impulse wave 5 of the higher order impulse wave (C) from the end of October.
Given the prevailing risk on sentiment seen across the equity markets today, Dow Jones index can be expected to rise further to the next resistance level 3565.00 (former multi-month high from the end of July).
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Dow Jones broke key resistance level 35000.
Likely to rise to resistance level 3565.00
Dow Jones index recently broke the key resistance level 35000.00 (which has been reversing the price from the start of September).
The breakout of the resistance level 35000.00 accelerated the active minor impulse wave 5 of the higher order impulse wave (C) from the end of October.
Given the prevailing risk on sentiment seen across the equity markets today, Dow Jones index can be expected to rise further to the next resistance level 3565.00 (former multi-month high from the end of July).
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#WaveAnalysis
#EURJPY reversed from support level 161.35
Likely to rise to resistance level 164.00
EURJPY currency pair recently reversed up from the key support level 161.35, coinciding with the 20-day moving average support trendline of the daily up channel from October and the 50% Fibonacci correction of the upward impulse from August.
The upward reversal from the support level 161.35 stopped the earlier minor correction 2 from the middle of November.
Given the clear daily uptrend, EURJPY currency pair can be expected to rise further to the next resistance level 164.00, which stopped the previous impulse wave 1.
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#EURJPY reversed from support level 161.35
Likely to rise to resistance level 164.00
EURJPY currency pair recently reversed up from the key support level 161.35, coinciding with the 20-day moving average support trendline of the daily up channel from October and the 50% Fibonacci correction of the upward impulse from August.
The upward reversal from the support level 161.35 stopped the earlier minor correction 2 from the middle of November.
Given the clear daily uptrend, EURJPY currency pair can be expected to rise further to the next resistance level 164.00, which stopped the previous impulse wave 1.
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The crypto market continues to move higher, adding another 0.8% overnight to $1.44 trillion as Greed stays as a major driver right now, according to a popular sentiment indicator.
Friday morning saw a fresh test of the $38K level for #Bitcoin. It failed, but we continue to see the persistence of growth attempts and less and less deep retreats from local peaks. The dynamics of November lead us to believe that the chances of the price rising by another 2.5K and exceeding the $40K level are higher than the chances of it falling by the same amount to $35K.
#Ethereum crossed the $2100 level, returning to the peak set on 10 November. There was a classic Fibonacci retracement with a 61.8% pullback from the initial rally. Breaking through the $2135 level will set up the main scenario of a 161.8% growth, which in this case is close to $2500.
Friday morning saw a fresh test of the $38K level for #Bitcoin. It failed, but we continue to see the persistence of growth attempts and less and less deep retreats from local peaks. The dynamics of November lead us to believe that the chances of the price rising by another 2.5K and exceeding the $40K level are higher than the chances of it falling by the same amount to $35K.
#Ethereum crossed the $2100 level, returning to the peak set on 10 November. There was a classic Fibonacci retracement with a 61.8% pullback from the initial rally. Breaking through the $2135 level will set up the main scenario of a 161.8% growth, which in this case is close to $2500.
German business climate: a pessimistic recovery
German Ifo Business Climate Index rose for the third consecutive month. Still, this recovery is weaker than expected, putting the Euro in a more vulnerable position against the Pound and Canadian Dollar, where the latest data exceeded expectations.
Germany's business climate indicator rose to 87.3 from 86.9 a month earlier and 85.8 in August, which was the local bottom of the indicator.
The closest reversal to the current one is shown in the main index in early 2009, with the indicator recovering from slightly lower levels. However, there is a significant difference: back then, the business expectations component pulled the index upwards, but from 2017 to the present, expectations were often below current estimates.
German Ifo Business Climate Index rose for the third consecutive month. Still, this recovery is weaker than expected, putting the Euro in a more vulnerable position against the Pound and Canadian Dollar, where the latest data exceeded expectations.
Germany's business climate indicator rose to 87.3 from 86.9 a month earlier and 85.8 in August, which was the local bottom of the indicator.
The closest reversal to the current one is shown in the main index in early 2009, with the indicator recovering from slightly lower levels. However, there is a significant difference: back then, the business expectations component pulled the index upwards, but from 2017 to the present, expectations were often below current estimates.
The origins of German business pessimism can be seen in the dramatic slowdown in China and the trade wars unleashed by Trump as US president. In addition, pessimism in business circles is caused by the forced search for alternative energy sources.
This indicator correlates quite closely with the #EURUSD dynamics, and the heavy recovery is precisely what we are seeing in the most traded currency pair. Looking at the situation from the perspective of its impact on EURUSD, as long as the expectations component remains below the assessment of current conditions, it is worth setting up for a long-term downtrend in the pair, regardless of the indicator's recovery periods.
This indicator correlates quite closely with the #EURUSD dynamics, and the heavy recovery is precisely what we are seeing in the most traded currency pair. Looking at the situation from the perspective of its impact on EURUSD, as long as the expectations component remains below the assessment of current conditions, it is worth setting up for a long-term downtrend in the pair, regardless of the indicator's recovery periods.
#WaveAnalysis
#GBPJPY broke pivotal resistance level 188.00
Likely to rise to resistance level 190.00.
GBPJPY recently broke the pivotal resistance level 188.00 (which stopped the previous intermediate impulse wave (1) in the middle of this month).
The breakout of the resistance level 188.00 accelerated the active intermediate impulse wave (3) of the higher order primary impulse sequence 5 from the start of October.
Given the clear daily uptrend and the continuation of the strong yen sales, GBPJPY can be expected to rise further to the next resistance level 190.00.
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#GBPJPY broke pivotal resistance level 188.00
Likely to rise to resistance level 190.00.
GBPJPY recently broke the pivotal resistance level 188.00 (which stopped the previous intermediate impulse wave (1) in the middle of this month).
The breakout of the resistance level 188.00 accelerated the active intermediate impulse wave (3) of the higher order primary impulse sequence 5 from the start of October.
Given the clear daily uptrend and the continuation of the strong yen sales, GBPJPY can be expected to rise further to the next resistance level 190.00.
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#WaveAnalysis
#Silver rising inside intermediate impulse wave (3)
Likely to test resistance level 25.00
Silver recently broke the key resistance level 23.50 (which has been reversing the price from
September, as can be seen below).
The breakout of the resistance level 23.50 accelerated the active intermediate impulse wave (3), which then broke the weekly down channel from May.
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#Silver rising inside intermediate impulse wave (3)
Likely to test resistance level 25.00
Silver recently broke the key resistance level 23.50 (which has been reversing the price from
September, as can be seen below).
The breakout of the resistance level 23.50 accelerated the active intermediate impulse wave (3), which then broke the weekly down channel from May.
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The crypto market cap was near $1.42 trillion on Monday morning. Failure to build on the growth caused moderate pressure on prices.
#Bitcoin exchange rate was pulling back to $37.0K, having remained within an uptrend for over a month now, with the lower boundary now at $36.6K and the upper boundary at $38.3K. Only a decline below the lower boundary will question the sustainability of the uptrend. Until then, the prevalence of buying on declines in the major cryptocurrencies is very likely.
As a result of another recalculation, Bitcoin mining difficulty increased by 5%. The index reached an all-time high at 67.96 T. According to CryptoQuant data, selling pressure from miners is at its lowest level since 2017.
#Ethereum failed to hold above $2100 levels for the third time this year. Before that, there were attempts in April and early November. The price rolled back to $2050, which does not look scary yet but sets up for increased pressure in the short term.
#Bitcoin exchange rate was pulling back to $37.0K, having remained within an uptrend for over a month now, with the lower boundary now at $36.6K and the upper boundary at $38.3K. Only a decline below the lower boundary will question the sustainability of the uptrend. Until then, the prevalence of buying on declines in the major cryptocurrencies is very likely.
As a result of another recalculation, Bitcoin mining difficulty increased by 5%. The index reached an all-time high at 67.96 T. According to CryptoQuant data, selling pressure from miners is at its lowest level since 2017.
#Ethereum failed to hold above $2100 levels for the third time this year. Before that, there were attempts in April and early November. The price rolled back to $2050, which does not look scary yet but sets up for increased pressure in the short term.