US officials have indicated that they will buy back as much oil to replenish the strategic oil reserve as they can at current prices. Technically, this also supports the price.
It was logical to expect oil to quickly move higher on such news, but we see a fourth session of declines.
Apparently, sellers are on the side of falling actual demand, which pressurises prices despite promises to cut production.
But it is quite possible that the pressure on prices in recent days was a sell-off after a failed test of the 200-day moving average. From current levels, oil has downside potential to $66-70 per barrel WTI and $70-73 for Brent, from where it was repurchased from March to the end of June and several more times from July 2021. A decline in this area would bring the 200-week average back into focus, which requires global events such as a rupture within OPEC, a global pandemic or abnormal volatility in financial markets to break.
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It was logical to expect oil to quickly move higher on such news, but we see a fourth session of declines.
Apparently, sellers are on the side of falling actual demand, which pressurises prices despite promises to cut production.
But it is quite possible that the pressure on prices in recent days was a sell-off after a failed test of the 200-day moving average. From current levels, oil has downside potential to $66-70 per barrel WTI and $70-73 for Brent, from where it was repurchased from March to the end of June and several more times from July 2021. A decline in this area would bring the 200-week average back into focus, which requires global events such as a rupture within OPEC, a global pandemic or abnormal volatility in financial markets to break.
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There were more signs of a cooling US labour market ahead of Friday's employment report. The number of open job vacancies in October fell to 8.733 million from 9.35 million a month earlier and 9.31 million expected.
With occasional bounces, the figure is down from 12 million since March last year. However, the job market is still hotter than it was at its peak in January 2019 at 7.5 million.
US markets remain in "bad is good" mode. This logic makes sense for inflation, suggesting the Fed is easing its stance or bringing the date for an interest rate cut closer.
But it is a very volatile game when we look at indicators of economic activity such as the labour market or consumption. A deterioration in these indicators may first prove to be the cause of market turbulence before a softening of the Central Bank's stance and a "natural recovery" of the market reverses the trend.
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With occasional bounces, the figure is down from 12 million since March last year. However, the job market is still hotter than it was at its peak in January 2019 at 7.5 million.
US markets remain in "bad is good" mode. This logic makes sense for inflation, suggesting the Fed is easing its stance or bringing the date for an interest rate cut closer.
But it is a very volatile game when we look at indicators of economic activity such as the labour market or consumption. A deterioration in these indicators may first prove to be the cause of market turbulence before a softening of the Central Bank's stance and a "natural recovery" of the market reverses the trend.
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#WaveAnalysis
#EURUSD broke daily up channel
Likely to fall to support level 1.0700
EURUSD currency pair under the bearish pressure after the earlier breakout of the support trendline of the daily up channel, which enclosed the previous impulse wave (C) from the start of November.
The breakout of this daily up channel accelerated the active impulse wave 1.
Given the clear daily downtrend and the strong USD bullish sentiment seen today, EURUSD can be expected to fall further to the next support level 1.0700 (former monthly high from October).
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#EURUSD broke daily up channel
Likely to fall to support level 1.0700
EURUSD currency pair under the bearish pressure after the earlier breakout of the support trendline of the daily up channel, which enclosed the previous impulse wave (C) from the start of November.
The breakout of this daily up channel accelerated the active impulse wave 1.
Given the clear daily downtrend and the strong USD bullish sentiment seen today, EURUSD can be expected to fall further to the next support level 1.0700 (former monthly high from October).
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#WaveAnalysis
#Gold reversed from multi-year resistance level 2065
Likely to fall to support level 1900
Gold recently reversed down from the major multi-year resistance level 2065, which has been reversing the price from the middle of 2020, as can be seen below.
The resistance level 2065.00 was strengthened by the upper daily and the weekly Bollinger Bands.
Given the strength of the resistance level 2065 (which was never broken on a closing basis over the last few years) and the overbought weekly Stochastic, Gold can be expected to fall further to the next round support level 2000 – the breakout of which can lead to further losses to 1900.
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#Gold reversed from multi-year resistance level 2065
Likely to fall to support level 1900
Gold recently reversed down from the major multi-year resistance level 2065, which has been reversing the price from the middle of 2020, as can be seen below.
The resistance level 2065.00 was strengthened by the upper daily and the weekly Bollinger Bands.
Given the strength of the resistance level 2065 (which was never broken on a closing basis over the last few years) and the overbought weekly Stochastic, Gold can be expected to fall further to the next round support level 2000 – the breakout of which can lead to further losses to 1900.
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The crypto market made another leap forward on Tuesday afternoon after spending less than 24 hours in consolidation mode. In the last day, the total crypto cap reached $1.6 trillion, up 3.9% in a day, 11% in a week and 20% in 30 days. The acceleration in recent days is evident, which may reflect both speculators hastily closing short positions and increasing FOMO.
#Bitcoin is adding over 5% in 24 hours, trading near $43.7K at the time of writing and touching $44.5K at the start of the day. Previously, we have repeatedly noted "thin air territory" in the $40-46K range. The market did not linger here in previous times, and we should look for hints of turning points not earlier than the $46-47K area, where there was a reversal in March last year and temporary support in 2021.
#Bitcoin is adding over 5% in 24 hours, trading near $43.7K at the time of writing and touching $44.5K at the start of the day. Previously, we have repeatedly noted "thin air territory" in the $40-46K range. The market did not linger here in previous times, and we should look for hints of turning points not earlier than the $46-47K area, where there was a reversal in March last year and temporary support in 2021.
#Ethereum tested $2300 but has so far quickly retreated to $2260. In the dynamics of ETH since the middle of last year, a broad upward channel can be identified, the upper boundary of which now passes through $2430. It is worth being prepared for the bulls to pull the price closer to these levels before deciding to take profits.
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The Dow Jones index has switched into consolidation mode, joining the S&P500 and Nasdaq100, which did so almost two and three weeks ago, respectively. This could be consolidation before a spurt to new highs, but it's more likely that we're seeing a depletion of growth.
The Dow Jones index is trading just 0.8% away from its record close in December 2021 and 2% away from its all-time high, having added nearly 12% during the rally over the past five weeks. The rally has been so rapid that the RSI on the daily charts has exceeded 80, an extremely overbought zone. Sometimes, a move into this territory kicks off an even wilder rally, indicating extreme investor greed.
But a different pattern of behaviour seems to have been chosen this time. The Dow Jones index slowly slid on Monday and Tuesday. The S&P500 and Nasdaq100, the broader equity indices, did not connect to the upside and continued to consolidate at recent tops.
The Dow Jones index is trading just 0.8% away from its record close in December 2021 and 2% away from its all-time high, having added nearly 12% during the rally over the past five weeks. The rally has been so rapid that the RSI on the daily charts has exceeded 80, an extremely overbought zone. Sometimes, a move into this territory kicks off an even wilder rally, indicating extreme investor greed.
But a different pattern of behaviour seems to have been chosen this time. The Dow Jones index slowly slid on Monday and Tuesday. The S&P500 and Nasdaq100, the broader equity indices, did not connect to the upside and continued to consolidate at recent tops.
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Equally important is the behaviour of the currency market, where the dollar has been adding since late November, which is usually a bearish factor for the market. And this is clearly visible in the dynamics of other indices. Dow Jones, contrary to simple logic, has accelerated its ascent these days.
Such character of movement reminds one of active liquidation of short positions. We saw ruthless equivalents of such liquidations in gold, with the capitulation peak on the 1st and at the beginning of trading on the 4th of December. We saw the opposite situation in April 2020, with negative prices in some oil futures.
That is, technically, from current levels, it is now more comfortable to be bearish in the Dow Jones, assuming that the index is more likely to fall by 5% than rise by another similar amount. Fundamentally, it's also not easy to buy stocks whose prices include expectations that the Fed will cut rates by 150 points over the next year, with final demand and corporate profits remaining as strong.
Such character of movement reminds one of active liquidation of short positions. We saw ruthless equivalents of such liquidations in gold, with the capitulation peak on the 1st and at the beginning of trading on the 4th of December. We saw the opposite situation in April 2020, with negative prices in some oil futures.
That is, technically, from current levels, it is now more comfortable to be bearish in the Dow Jones, assuming that the index is more likely to fall by 5% than rise by another similar amount. Fundamentally, it's also not easy to buy stocks whose prices include expectations that the Fed will cut rates by 150 points over the next year, with final demand and corporate profits remaining as strong.
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ADP reported a 103k increase in new private sector jobs in the US, against expectations of 130k and 106k (revised from 113k) a month earlier.
This indicator was designed as the last insight on the jobs market before the official data. In the last three months, according to ADP, the private sector has been creating an average of 100k new jobs per month. We saw a similar slowdown at the end of 2018, followed by a year of stagnation and a reversal to decline before the pandemic hit.
The slowdown in the labour market comes as interest rates come under pressure and the potential for a quick recovery from the pandemic is exhausted.
The importance of the ADP reports to the markets is diminishing as they increasingly diverge from official data. The difference began to accumulate in 2018 when the official data continued the trend of employment growth with stagnant or declining numbers from an independent source.
This indicator was designed as the last insight on the jobs market before the official data. In the last three months, according to ADP, the private sector has been creating an average of 100k new jobs per month. We saw a similar slowdown at the end of 2018, followed by a year of stagnation and a reversal to decline before the pandemic hit.
The slowdown in the labour market comes as interest rates come under pressure and the potential for a quick recovery from the pandemic is exhausted.
The importance of the ADP reports to the markets is diminishing as they increasingly diverge from official data. The difference began to accumulate in 2018 when the official data continued the trend of employment growth with stagnant or declining numbers from an independent source.
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#WaveAnalysis
#Silver reversed from resistance level 25.80
– Likely to fall to support level 23.50
Silver falling strongly after the price reversed down from the key resistance level 25.80, which reversed the price multiple times in April and May.
The downward reversal from the resistance level 25.80 started the active minor corrective wave iv.
Given the strength of the resistance level 25.80 and the bearish sentiment seen across the precious metal markets today, Silver can be expected to fall further to the next support level 23.50.
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#Silver reversed from resistance level 25.80
– Likely to fall to support level 23.50
Silver falling strongly after the price reversed down from the key resistance level 25.80, which reversed the price multiple times in April and May.
The downward reversal from the resistance level 25.80 started the active minor corrective wave iv.
Given the strength of the resistance level 25.80 and the bearish sentiment seen across the precious metal markets today, Silver can be expected to fall further to the next support level 23.50.
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#WaveAnalysis #SPX
S&P 500 reversed from long-term resistance level 4600.00
Likely to fall to support level 4500.00
S&P 500 index under the bearish pressure after the earlier downward reversal from the long-term resistance level 4600.00, which stopped the sharp weekly uptrend in July.
The downward reversal from the resistance level 4600.00 stopped the previous minor impulse wave 3.
Given the strength of the resistance level 4600.00 and the still overbought daily Stochastic, S&P 500 index can be expected to fall further to the next round support level 4500.00.
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S&P 500 reversed from long-term resistance level 4600.00
Likely to fall to support level 4500.00
S&P 500 index under the bearish pressure after the earlier downward reversal from the long-term resistance level 4600.00, which stopped the sharp weekly uptrend in July.
The downward reversal from the resistance level 4600.00 stopped the previous minor impulse wave 3.
Given the strength of the resistance level 4600.00 and the still overbought daily Stochastic, S&P 500 index can be expected to fall further to the next round support level 4500.00.
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#Crypto market capitalisation changed little at the end of trading on Wednesday, remaining close to $1.59 trillion (-0.14% d/d). But this modest result is a show of strength, given the pressure in equity markets, which intensified selling in #Bitcoin and #Ethereum.
Meanwhile, Altcoins got their chance to catch up with the leaders. For example, XRP added 2% in 24h) and #Cardano added 4%.
#XRP has formed an upward trend since mid-October. An attempt to accelerate growth last month failed, but it also failed to break this line at the start of December. In addition to the trend line, the 50-day moving average, the touch of which stops the sell-off for the last 50 days, also turned out to be on the side of buyers.
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Meanwhile, Altcoins got their chance to catch up with the leaders. For example, XRP added 2% in 24h) and #Cardano added 4%.
#XRP has formed an upward trend since mid-October. An attempt to accelerate growth last month failed, but it also failed to break this line at the start of December. In addition to the trend line, the 50-day moving average, the touch of which stops the sell-off for the last 50 days, also turned out to be on the side of buyers.
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#JPY was the hero of the day on Thursday, adding over 1.7% vs USD and 1.6% vs EUR. The yen has been sided by Japan's regional banks, which are rumoured to be lobbying for the abandonment of the yield targeting policy. USDJPY dipped below 145, and EURJPY fell under 156.
Simultaneously, markets are laying that Fed and ECB rates have reached a plateau, and the next step will be to lower them. The logical outcome of this divergence is an accelerated narrowing of yield spreads between Japanese and other G7 economies bonds, bringing capital back into the yen.
Yen appreciation has been on a steady course since early November, a couple of weeks after the peak in US 10-year yields, when markets became convinced that their decline had become a trend.
Also, the yen may work the cautious mood of the stock markets in recent days. The yen is very often used as a funding currency to buy risky assets. The shift of market sentiment to profit-taking on major indices triggered a predictable deleveraging.
Simultaneously, markets are laying that Fed and ECB rates have reached a plateau, and the next step will be to lower them. The logical outcome of this divergence is an accelerated narrowing of yield spreads between Japanese and other G7 economies bonds, bringing capital back into the yen.
Yen appreciation has been on a steady course since early November, a couple of weeks after the peak in US 10-year yields, when markets became convinced that their decline had become a trend.
Also, the yen may work the cautious mood of the stock markets in recent days. The yen is very often used as a funding currency to buy risky assets. The shift of market sentiment to profit-taking on major indices triggered a predictable deleveraging.
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#WaveAnalysis
#GBPCHF reversed from support level 1.1000
Likely to rise to resistance level 1.1125
GBPCHF recently reversed up from the round support level 1.1000, lower boundary of the sideways price range inside which the pair has been trading from the start of November.
The support level 1.1000 was strengthened by the lower daily Bollinger Band and by the 38.2% Fibonacci correction of the upward impulse from October.
Given the strength of the support level 1.1000, GBPCHF currency pair can be expected to rise further to the next resistance level 1.1125 (upper boundary of the active sideways price range).
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#GBPCHF reversed from support level 1.1000
Likely to rise to resistance level 1.1125
GBPCHF recently reversed up from the round support level 1.1000, lower boundary of the sideways price range inside which the pair has been trading from the start of November.
The support level 1.1000 was strengthened by the lower daily Bollinger Band and by the 38.2% Fibonacci correction of the upward impulse from October.
Given the strength of the support level 1.1000, GBPCHF currency pair can be expected to rise further to the next resistance level 1.1125 (upper boundary of the active sideways price range).
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#WaveAnalysis
#EURNZD reversed from support level 1.7530
Likely to rise to resistance level 1.7800
EURNZD recently reversed up from the strong support level 1.7530, which has been steadily reversing the pair from the middle of January.
The support level 1.7530 was strengthened by the lower daily Bollinger Band.
Given the strength of the support level 0.9420 and the oversold daily Stochastic, EURNZD can be expected to rise further to the next resistance level 1.7800.
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#EURNZD reversed from support level 1.7530
Likely to rise to resistance level 1.7800
EURNZD recently reversed up from the strong support level 1.7530, which has been steadily reversing the pair from the middle of January.
The support level 1.7530 was strengthened by the lower daily Bollinger Band.
Given the strength of the support level 0.9420 and the oversold daily Stochastic, EURNZD can be expected to rise further to the next resistance level 1.7800.
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A wave of profit-taking hit the crypto market on Monday morning. It seems that the failure of cryptocurrencies to rise over the weekend caused players to pull stop orders very close to market prices, and we saw a massive exit from long positions in low liquidity before the regular session in Asia. Strong demand for risk assets in traditional markets suggests that the market will try to get back on its previous growth track.
Bitcoin started the day at $43.8K, soon fell to $40.7K, and then stabilised at $42.1K, losing 4% since the start of the day. In our view, the uptrend will remain in force if Bitcoin manages to hold above $40K.
The sudden sell-off proved even harder for altcoins. At one point, Ethereum was losing over 9%, XRP was losing over 10%, Solana collapsed by 13%, and Cardano lost 14%. The largest altcoins have already recovered about half of those losses. The sell-off attracted buyers who were waiting for lower prices to enter the market, and the market gave them that chance.
Bitcoin started the day at $43.8K, soon fell to $40.7K, and then stabilised at $42.1K, losing 4% since the start of the day. In our view, the uptrend will remain in force if Bitcoin manages to hold above $40K.
The sudden sell-off proved even harder for altcoins. At one point, Ethereum was losing over 9%, XRP was losing over 10%, Solana collapsed by 13%, and Cardano lost 14%. The largest altcoins have already recovered about half of those losses. The sell-off attracted buyers who were waiting for lower prices to enter the market, and the market gave them that chance.
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Consumer prices in China accelerated their decline in November, losing 0.5% yoy vs. 0.2% yoy expected and the same amount a month earlier.
Producer prices also intensified their decline, losing 3.0% y/y vs -2.6% previously and a softer-than-expected -2.8%. PPI has been in negative territory for the past 13 months, also losing 1.3% y/y in November 2022.
The weakness in consumer prices has brought the markets' focus back to the health of the national economy and led analysts to suggest that consumers are choosing to save. This is a negative signal for markets, which had hoped that domestic consumption in China would be a growth driver in the face of waning external demand.
Low inflation is a negative for the local currency for the following reasons. First, falling consumer prices point to problems with domestic demand, indicating room for stimulus. Second, the intensified fall in producer prices also hints at sales problems of the "global factory".
Producer prices also intensified their decline, losing 3.0% y/y vs -2.6% previously and a softer-than-expected -2.8%. PPI has been in negative territory for the past 13 months, also losing 1.3% y/y in November 2022.
The weakness in consumer prices has brought the markets' focus back to the health of the national economy and led analysts to suggest that consumers are choosing to save. This is a negative signal for markets, which had hoped that domestic consumption in China would be a growth driver in the face of waning external demand.
Low inflation is a negative for the local currency for the following reasons. First, falling consumer prices point to problems with domestic demand, indicating room for stimulus. Second, the intensified fall in producer prices also hints at sales problems of the "global factory".
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A weaker yuan for China would be an attempt to address several issues at once, from improving the competitiveness of Chinese exports to trying to boost retail sales by encouraging Chinese to spend now rather than save.
The USDCNH exchange rate approached as close as 7.20 on Monday, playing off the weakness in inflation and the general dollar trend that prevailed on Monday. In addition, the pair's ability to quickly move back into territory above the 200-day average and begin to recover from a local oversold condition should be considered a bullish signal for the pair.
The pair's ability to consolidate above 7.20 would be an indication that we are seeing more than a correction from the decline. If this is the case, the road to 7.26 potentially opens up, and beyond that, possibly to all-time highs above 7.36.
The USDCNH exchange rate approached as close as 7.20 on Monday, playing off the weakness in inflation and the general dollar trend that prevailed on Monday. In addition, the pair's ability to quickly move back into territory above the 200-day average and begin to recover from a local oversold condition should be considered a bullish signal for the pair.
The pair's ability to consolidate above 7.20 would be an indication that we are seeing more than a correction from the decline. If this is the case, the road to 7.26 potentially opens up, and beyond that, possibly to all-time highs above 7.36.
#WaveAnalysis
#Nasdaq100 broke resistance level 16000
Likely to rise to resistance level 16500
Nasdaq-100 index recently under the bullish pressure after the price broke above the round resistance level 16000, which stopped the weekly uptrend earlier this year, as can be seen below.
The breakout of the resistance level 16000 accelerated the active intermediate impulse wave (3) .
Given the strong uptrend from the start of this year, Nasdaq-100 index can be expected to rise further to the next resistance level 16500 (which started the weekly downtrend at the end of 2021).
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#Nasdaq100 broke resistance level 16000
Likely to rise to resistance level 16500
Nasdaq-100 index recently under the bullish pressure after the price broke above the round resistance level 16000, which stopped the weekly uptrend earlier this year, as can be seen below.
The breakout of the resistance level 16000 accelerated the active intermediate impulse wave (3) .
Given the strong uptrend from the start of this year, Nasdaq-100 index can be expected to rise further to the next resistance level 16500 (which started the weekly downtrend at the end of 2021).
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#WaveAnalysis
#CHFJPY reversed from support level 162.40
Likely to rise to resistance level 167.35
CHFJPY recently reversed up sharply from the key support level 162.40, which has been reversing the pair from the start of August.
The upward reversal from the support level 162.40 created the daily Japanese candlesticks reversal pattern Long legged Doji.
Given the strong daily uptrend, CHFJPY currency pair can be expected to rise further to the next resistance level 167.35 (former support from the end of November).
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#CHFJPY reversed from support level 162.40
Likely to rise to resistance level 167.35
CHFJPY recently reversed up sharply from the key support level 162.40, which has been reversing the pair from the start of August.
The upward reversal from the support level 162.40 created the daily Japanese candlesticks reversal pattern Long legged Doji.
Given the strong daily uptrend, CHFJPY currency pair can be expected to rise further to the next resistance level 167.35 (former support from the end of November).
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