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Global markets were beaten last week as worries over the China-US trade war and a spike in US bond yields alongside a cautious approach to earnings season wounded optimism. All three major U.S. stocks indexes posted their biggest weekly percentage declines since March 23rd. In addition, benchmark 10-year Treasury yields reached 3.261%, a level last seen in May 2011. The 30-year yield hit a 4 year high of 3.446%. This week however, Japan’s Nikkei started the week by slumping 1.8% as carmaker shares hit 13-month lows. That was after Washington said it will consider a currency manipulation provision in any future trade deal with Japan and China.

In UK, the FTSE 100 followed other equity markets, dropping to its lowest point since April. The UK market selloff was also bolstered by a rising pound on hopes London and Brussels were close to a breakthrough, easing fears of a no-deal Brexit from the bloc next March. However, an EU summit on Wednesday pierced optimism on Monday amid a stalemate over the post-Brexit status of Britain's land border with Ireland. Europe's STOXX 600 also dipped to a 22-month low in early trading, as investors steadied themselves for the summit.

In Eurozone news, Chancellor Angela Merkel's Bavarian allies suffered their worst election result since 1950. Italy also looked to approve a budget that sees an increase in the country's deficit, a move potentially drawing criticism from the EU.

The mood on Monday was also soured by a jump in oil prices, as tensions rose between the West and Saudi Arabia over the disappearance of journalist Jamal Khashoggi. This added to concerns over economic growth, with investors scurrying to traditional safe haven assets like the Japanese and Swiss currencies, as well as gold. At one point, Brent crude rose 1.3% to $81.50 per barrel. Investors fear if oil prices keep rising, so will inflation and in turn hurt weak borrowers.

UK Data for the week ahead

Date Time (BST) Data Forecast Previous Read
Tuesday 16th October 09:30am Average Earnings Index 3m/y 2.6% 2.6%
    Unemployment Rate 4.0% 4.0%
    Claimant Count Change 4.5K 8.7K
  2:15pm MPC Member Cunliffe Speaks    
Wednesday 17th October 09:30am CPI y/y 2.6% 2.7%
    Core CPI y/y 2.0% 2.1%
    PPI Input y/y 0.9% 0.5%
    PPI Output y/y 0.2% 0.2%
    RPI y/y 3.5% 3.5%
    HPI y/y 3.5% 3.1%
    FPC Meeting Minutes    
  2:30pm CB Leading Index m/m   -0.2%
  6:00pm MPC Member Broadbent Speaks    
Thursday 18th October 09:30am Retail Sales m/m -0.3% 0.3%
Friday 19th October 09:30am Public Sector Net Borrowing 4.6B 5.9B
  4:30pm BoE Gov Carney Speaks    

© Akif SH. Din, AGORA-direct Limited, A Global Market Outbreak, 15/10/2018.

Global markets started the new month confident after a brutal October sank global equity markets with one of their worst drops since the financial crisis. An index of stocks tracking 47 countries, the MSCI World Index, was down 7.5% and had wiped out as much as $4.5 trillion in October. Markets were hammered with a flurry of concerns ranging from trade war, global economy and higher interest rates.

Asian markets continued their rise on the first day of November. Hong Kong’s Hang Seng Index rose 1.5%, with the Shanghai Composite Index rising 0.2%. Japan’s benchmark Nikkei 225 however, didn’t conform, easing 1%.

European markets shadowed Asian markets, trading higher with the help of robust company earnings overshadowing worries of slowing economic growth and political risk. Strong earnings from ING, BT group and ASM International helped offset disappointing earnings from Credit Suisse. Shares in Shell also fell as the oil company slightly missed expectations.

FTSE 100 stocks have generally had a good set of results in October. Oil giant BP, posted its best profit result in 5 years. Glaxo Smith Kline (GSK) also beat estimates, though Reckitt Benckiser bucked the trend. UK banks also showed strong earnings with RBS, Lloyds and HSBC all beating forecasts, though Barclays lagged behind.

However, the UK benchmark didn’t follow its European peers on Thursday. The FTSE fell on the back of a strengthening pound on a report that London and Brussel are close to a deal that would give London financial institutions continued access to European markets after Brexit. The pound has taken a beating in recent months on worries whether Britain can assure a deal with the European Union.

S&P 500 October Selloff

© Akif SH. Din, AGORA-direct Limited, 05/11/18

Disclaimer

The content of this text is deemed reliable, but the accuracy or completeness of the of the information therein is not guaranteed and AGORA-direct Limited shall not be liable for a delay if this information is not kept up to date. Although Agora-direct Limited believes that all information in this text is accurate, Agora direct Ltd. shall not be liable if this is not so. The information must not be suitable for everyone and should not be construed as an offer, recommendation, advice, call for action, or advertisement intended or designed.

Risk aversion drove equity markets across Asia and Europe lower, along with the Sterling and Euro. The US Dollar, which is considered a safe haven in times of turmoil, was buoyed on the back of global tensions and global growth uncertainties. A spike in US bond yields has also hurt emerging markets.

The UK benchmark, FTSE 100, bucked the European trend as a weaker sterling helped the index trade slightly higher. The DAX, Euro Stoxx 600 and Stoxx 50 were all in the red as lingering worries from Brexit and Italy hampered investor confidence.

For mainland Europe, the focus remains on the Italian spending budget and wide fiscal deficit. Italy must submit a revised budget to the EU before a Tuesday deadline. So far it has refused to cut the current draft budget deficit which has promoted a clash with Brussels.

In addition, markets were hurt by reports that Banca Carige, whose shares and bonds were suspended, would need €400million to fill a capital gap. The bank would issue a convertible bond then offer shares to repay the bond. This reinforced the Italian banking crisis and has consequently kept BTP/Bund yield spreads above a key psychological level.

In UK, a turnaround in Brexit optimism hurt the UK currency as doubts whether Prime Minister Theresa May could get the backing of the EU and her own Conservative party for any Brexit deal. PM May was forced to cancel plans for an emergency cabinet meeting to approve a Brexit agreement. Moreover, a November summit looks very unlikely unless something dramatic changes in the next few days. Progress is being made, though vital subjects-largely the issue around the Irish backstop-remain.

Over the year, a reoccurring theme has taken hold of markets, as GBP has rallied over Brexit progress only to quickly reverse gains over Brexit pessimism.

Active moves were also seen in commodity markets where oil pared some of its recent losses. Oil giant Saudi Arabia said that Riyadh could reduce supply by 500,000 bpd in December. This would reduce global oil supply by 0.5%. Furthermore, Khalid Al-Falih stated we need to do whatever it takes to keep inventory in a narrow band, and maintain long-term market balance. He also said technical analysis shows we need to reduce supply by 1 million bpd from October levels.

UK Data for the week ahead

Date

Time (GMT)

Data

Forecast

Previous Read

Tuesday 13th

09:30

Average Earnings Index (3m/y)

3.0%

2.7%

 

 

Average Earnings Index (ex-Bonus)

3.1%

3.1%

 

 

Claimant Count Change

4.3K

18.5K

 

 

Unemployment Rate

4.0%

4.0%

 

 

 

 

 

Wednesday 14th

09:30

CPI (y/y)

2.5%

2.4%

 

 

Core CPI (y/y)

1.9%

1.9%

 

 

PPI Input (m/m)

0.6%

1.3%

 

 

PPI Output (m/m)

0.2%

0.4%

 

 

RPI (y/y)

3.4%

3.3%

 

 

HPI (y/y)

3.3%

3.2%

 

 

 

 

 

Thursday 15th

09:30

Retail Sales (m/m)

0.1%

-0.8%

 

 

Retails Sales (y/y)

 2.8%

3.0%

 

 

Core Retail Sales (m/m)

0.2%

-0.8%

 

 

Core Retail Sales (y/y)

3.3%

3.2%

 

13:00

MPC Member Tenreyro Speaks

 

 

 

 

 

 

 

Friday 16th

Tentative

Inflation Report Hearing

 

 

 

14:30

CB Leading Index (m/m)

 

-0.2%

 

 

 

 

 

 

 

 

 

 

 Brexit Uncertainties Weigh on GBP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

© Akif SH. Din, AGORA-direct Limited, 12/11/18

UK politics stole the limelight last week as a reckless number of resignations from the Conservative Party casted doubts over Prime Minister Theresa May’s Brexit deal and leadership. Just hours after unveiling her draft Brexit agreement to her party, MP’s including Brexit Minister Raab resigned.

In turn, Thursday saw Sterling face the largest one-day decline against the Euro since October 2016. Bond markets were also shocked, with yields on the 5-year bond contract record its biggest decline since the Brexit vote.

More recently, PM May stated toppling her would risk delaying Brexit and she would not let talks of a leadership challenge against her distract her from a critical week of negotiations with Brussels. To challenge the leadership of the Prime Minister a confidence vote must take place, where lawmakers of the party in power submit votes of ‘no confidence’. The Threshold for triggering a confidence vote is 48 and is yet to be met. May also said changing leadership at this point isn’t going to make it easier.

Taking a backseat, but still impacting markets, were trade tensions between the US and China. Conflicting tones from US President Donald Trump and Mike Pence didn’t provide a clear signal for global asset classes.

In addition, US Federal Reserve members highlighted risks from a global economic slowdown and has markets wagering on whether the US rate hike cycle will soon come to an end.

In the energy space, WTI and International Brent Oil staged a rebound after taking a hammering over recent weeks as well as going into contango. The black gold pared some its losses on the back of the possibility that OPEC members could cut production to prevent another global oil glut.

UK Data for the week ahead

Date

Time (GMT)

DATA

Forecast

previous read

Tuesday 20th

10:00

BoE Governor Mark Carney Speaks

 

 

 

10:00

Inflation Report Hearing

 

 

 

11:00

CBI Industrial Trends Orders

-7

-6

Wednesday 21st

09:30

Public Sector Net Borrowing

5.35B

3.26B

 

 

Public Sector Net Cash Requirements

 

15.846B

Thursday 22nd

20:55

BoE MPC Saunders Speaks

 

 

 

 

 

 

 

Note: Brexit remains the forefront for global markets, especially, UK markets.

 

© Akif SH. Din, AGORA-direct Limited, 19/11/2018

Major European bourses ended the day in green as worries regarding Brexit and Italy eased. The DAX, CAC and STOXX50 finished 1.45%, 0.97% and 1.13% respectively after signs that Italy was arranging to redraft their spending plans as this issue has caused increasing tensions with the European Union. As a result, on-going matters have bolstered volatility in European markets, especially the Italian banking sector.


In UK, the FTSE 100 joined its European cousins. The benchmark index finished the day up 1.20% as Brexit uncertainties eased after a positive weekend vote in Brussels. Thus, shares in the financial sector led the advance. UK Mid Cap FTSE 250 also had a positive day, gaining 1%. Moreover, energy shares traded positively as oil markets recouped some of its recent losses amid a global supply glut.


On the other side of the pond, US equity markets continued the trend as retailer shares gained on the back Black Friday and Cyber Monday sales. This traditionally begins the US holiday shopping season. The DOW, S&P 500 and the tech heavy NASDAQ added 1.46%, 1.55% and 2.31% respectively.


For UK, this week’s main event is of course Brexit related. UK Prime Minister Theresa May has to try to persuade parliament to agree to her Brexit deal.


For US, President Donald Trump and his Chinese counterpart Xi Jinping are expecting to meet at the G20 meeting in Buenos Aires. Furthermore, FED minutes are due later this week. Expectations have taken a dovish tilt over the past two weeks with the markets continuing to price in a December interest rate hike. However, markets have now only priced in one hike in 2019 instead of the two hikes anticipated just a month ago.

UK Data for the week ahead

Date

Time (GMT)

Data

Forecast

Previous Read

Tuesday 27th

11:00

CBI Realised Sales

10

5

 

Wednesday 28th

12:01

BRC Shop Price Index (y/y)

 

-0.2%

 

Tentative

Bank Stress Test Results

 

 

 

Tentative

BOE Financial Stability Report

 

 

Thursday 29th

09:30

Net Lending to Individuals (m/m)

 

 

 

 

M4 Money Supply (m/m)

0.3%

-0.3%

 

 

Mortgage Approvals

65K

65K

Friday 30th

12:01

GfK Consumer Confidence

-11

10

 

07:00

Nationwide HPI (m/m)

0.1%

0.1%


Note: Brexit remains the forefront for global markets, especially, UK markets.


© Akif SH. Din, AGORA-direct Limited, 27/11/18

Japanese Candlestick Charts (often referred to as candlestick or candle charts) is a Japanese charting method that compares to the western bar chart. The candlestick charting method has only recently gained popularity in the west since its introduction in the 18th century, making it one of the oldest types of charting.

FEATURES AND CONSTRUCTION

Candle charts provide added detail compared to your standard line charts. This is because candle charts not only show the final closing price, but also the open, high and low. By this description, both bar and candle charts are exactly the same.

However, the single most distinct feature which makes candle charts stand out is something called a real body. The real body is the area between the open the close. On electronic charts this is shown by drawing a rectangle (or square) between the open and close. This feature provides greater understanding of market psychology.

Another feature is the range. The range is the distance between the high and low of the trading session and allows you to measure volatility.

Furthermore, upper and lower shadows (or wicks and tails) are the distance between either the open/close and the high/low. This is dependent on the trading session. Shadows are a really useful feature that can aid you in determining the underlying psychology of the market.

As you can see from the above images, the real body is also coloured. Traditionally, black and white colours were used but given todays advanced charting platforms, individuals like to choose their own colours. Green and red are common choices with green denoting a positive session, and red, a negative session.

  • A positive trading session (bullish day) is where the closing price is higher than the opening price. Prices have advanced or rallied higher and suggests buyers are dominating the market. This would be called an ‘open’ candle.
  • A negative trading session (bearish day) is where the close is lower than the open. Prices have fallen or sold off and suggests sellers are in control of the market. This would be called a ‘filled’ candle.

If you enjoy the classic black/white charting, then white would represent positive day, and black, a negative day.

PSYCHOLOGY INTERPRETATION

The first image also shows the psychology of the market. The first candle traded above and below its open before closing below the midpoint of the sessions range. What this tells us is even though buyers are in control, sellers have a sound backing and are threatening bulls. This specific candle is called a hammer candle.

The second candle has a larger range and body compared to the first. It also opened below the prior close. Something to also note is the long upper shadow. This suggests buyers pushed the market higher only to meet determined sellers, who seized control and consequently pushed prices lower.

Sometimes a particular trading session may not have a wick. This is a strong sign that sentiment is one sided. The below image shows how price only traded beneath the open, indicating a strongly negatively biased market. Sellers didn’t allow buyer to push prices higher.

CANDLE CHARTS VS LINE AND BAR CHARTS

Against the line chart, one can notice the additional detail candle charts provide. Not only can we see trends, but we can also instantly see who is in control – the bulls or the bears. In addition, we can see the influence these participants have on price action.

Against its western counterpart, candlesticks provide a greater understanding into the conviction of market participants. Both charting types provide information of who is in control, but candle charts offer another dimension into market sentiment and bias.

Overall, Japanese candlesticks provide the individual with knowledge of market behaviour, market strength and an understanding of price trends. Here are a few advantages and disadvantages:

ADVANTAGES

  • Offers the user a greater depth of detail. The open, close, high and low are all recorded.
  • Instantly understand who is in control of the market.
  • Understand the conviction of market participant at any given time. Market sentiment and psychology is easily understood.

DISADVANTAGES

  • To construct a candlestick, all four data types are required and sometimes this may not be available.

There are more advantages to candle charts through windows and patterns, which may be discussed in the future.

 

© Akif SH. Din, AGORA-direct Limited, 03/12/2018

 

GBP plumbed a new 2018 low and traded at its lowest level since June 2017 on Monday as Brexit uncertainties hit FX markets. The GBP index traded down 0.84% on reports that PM May has decided to delay Tuesday’s important Brexit vote. UK data added to the negativity. Y/y GDP came in below expected at 1.5% against 1.6%. In addition, manufacturing production and goods trade balance fell below forecasts. Antipodean currency indices, AUD and NZD were up 0.47% and 0.28% respectively on the back of speculation the U.S. FED may be close to ending its rate hike cycle. The Euro was up 0.19%, with traders waiting for French President Emmanuel Macron to address the country after protestors caused chaos in Paris over the weekend. Global markets remain fragile with trade tension, global growth worries, Brexit and Italian budget issues impacting global asset classes.

Last week, global bond markets rallied and yields fell as global growth uncertainties took centre stage. The U.S. 2/5-year and 3/5-year yield spreads inverted, as well as the benchmark 2/10-year spread touching its lowest in over a decade, heightening fears of a recession. The decline in yields resulted in the USD trading lower which has been performing excellently over the last few months. This resulted in the dollar’s largest weekly loss in 3 months. Moreover, Canadian officials had arrested Huawei CFO for extradition to the U.S, potentially increasing tensions between the U.S. and China.

TECHNICALS

GBP.USD

GBPUSD has broken the 1.2661 support and a close would bolster downside risks. Both near-term 21/10-DMA’s are southbound, highlighting negative pressures. Momentum setups reinforce trending setups, with the RSI remaining in negative territory, now at 36. The bias continues to the downside and the 76.4% fib retracement of the post-Brexit rally now comes into focus.

EUR.USD

EURUSD is trading in a range between 1.1215 and 1.15. A break above the 1.1501 high may suggest further gains, though the downtrend line may cap the rally. The recent consolidation has caused short-term trending setups to have no directional bias. Friday’s bullish MA cross is negated unless prices rally above the aforementioned range.  Momentum setups have been tracking higher into positive territory, though the overall bias seems to lack upside conviction.

USD.JPY

Uptrend remains intact for USDJPY as prices rejected the 23.6% fib of the March-October rally. A counter downtrend has formed as prices have failed to make new highs. The recent decline lower has caused near-term 21/10-DMA’s to touch. Further negativity may well see the moving averages cross, suggesting a greater bearish backdrop may be developing. The RSI is below 50, though is tracking higher.

AUD.USD

AUDUSD has broken through the uptrend channel, but prices have held onto the 0.7202 support. Resistance lies at 0.7250, the 38.2% fib retracement of the October-December advance. Trending setups are flat with the 21/10-DMA’s trending sideways. The Daily MA’s may also offer resistance on rally attempts. The RSI has fallen below the uptrend line, now at 46.

© Akif SH. Din, AGORA-direct Limited, 10/12/2018

FTSE 100 continued to trade higher for a second consecutive day on Wednesday. Global equity markets staged a rebound as trade tension between the U.S. and China eased. Media company WPP and aerospace giant Rolls Royce led the advance, gaining 5.40% and 4.92% respectively. Investors were cheerful after Rolls Royce stated annual profits and cash flow were to come in towards the upper end of its guidance range. At the other end of the spectrum, Wood Group and Sainsburys were down 8.32% and 4.93%.

In the technical space for the FTSE 100, bear themes remain intact despite the recent rebound. After a downside breakout of the symmetrical triangle pattern, prices rejected the 50% fib level of the 2016-2018 bull market and have since rallied higher. The benchmark index has broken above the 6,861 resistance level but may find trouble to continue higher from a flurry of technical factors, namely nearby fibo level and moving averages.

Trending studies continue to reinforce bearish pressures as 50/21-DMA’s are trending south. Prices may find resistance from the 21-DMA if the index were to rally higher. In addition, the up sloping trend line may prevent the FTSE from advancing further. This would form a pullback, and a rejection may suggest deeper downside risks.  

Momentum studies also remain negative. The RSI has advanced through the 50 level, nearing its downtrend line. This has held strong before, and a rejection would confirm negative pressures. The ADX is above the crucial 25 level, and the DI’s are converging.

The FTSE 100 continues its bearish stance. Trade tensions between the U.S. and China will probably fizzle out. Markets have rallied on little progress only to be disappointed from escalations. Moreover, Brexit and political turmoil in UK will keep the pressure on UK equities.

© Akif SH. Din, AGORA-direct Limited, 12/12/2018

Even as British Prime Minister Theresa May is expected to face defeat on her Brexit deal, today marks a historic day for British politics with Parliament facing its most important decision since the second world war.

Uncertainty continues to dominate markets as a loss in Parliament today will leave Britain politically and economically tangled. Doubts of crashing out the EU without a transition deal have eased slightly but worries over what happens after PM May loses continue to dominate.

The size of Theresa May’s loss in Parliament will have different outcomes. A small loss could allow her to try again, asking Brussels for more concessions before trying to get her proposal through Parliament. However, a heavy defeat could lead to a potential delay of Brexit, crashing out with no deal or even having another referendum or general election.  

Markets are positioned for a substantial government loss and therefore the initial reaction to PM May’s defeat may be subdued. Option markets are potentially over pricing the volatility expectation, though GBP volatility may increase over coming trading sessions as new alternatives to Brexit become apparent.   

In the technical space a bearish backdrop remains intact for Cable. The rate has rejected 1.2890, the 50% fib level of the October-December decline, on its recent rally higher. A down sloping trendline helped with the significance of the aforementioned level and as a result, yesterday’s session saw a Shooting Star candle pattern form. This suggests a potential for greater downside risks.

In terms of trending setups, price is holding above the shorter term 21-Day EMA and currently resides at 1.2732. Due to the recent move higher the 21-Day EMA has turned higher and may offer some support. Price is now testing the 50-Day EMA which is flat and reinforced key downside pressures.

Momentum setups are at vital positions. The RSI has fallen from its high of 59 to 52 and is approaching is uptrend line. and the DI are negatively converging. A cross could potentially bolster the bearish sentiment. The ADX is below its key 25 level, indicating a non-trending market.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Key levels on the downside are 1.2709. Key topside levels are 1.2930, and the downtrend line.

Voting for May’s Brexit plan is due to begin at 1900 GMT

Note: GBP FX pairs will remain volatile over the next few days as the market will begin to take in more information on the alternative paths. UK equity markets will also remain volatile.

© Akif SH. Din MSTA, CFTe, AGORA-direct Limited, 15/01/2019

UK benchmark index, FTSE 100, traded 0.5% lower on Wednesday after a brutal government defeat made Brexit evermore complicated. In addition, sterling traded higher on Wednesday and its ‘sell the rumour, buy the fact’ gyration seemed to have no impact on the FTSE. Leading the pack were housing stocks, with Persimmon trading up 3.82%. On the flip side, education publisher Pearson is down 6.80% after total underlying revenue is expected to slip by 1%. Reckitt Benckiser is also in the red after its CEO stated he intends to retire by the end of 2019.

The technical space for FTSE 100 continues the bear theme as mentioned in my previous report. Recently, the index has rallied higher from its 6,527 low and has traded through the middle tine of the Andrews pitchfork as well as breaking through the 23.6% Fibonacci level of May-December selloff. Price found resistance at the key psychological level of 7,000.00 and in turn have retrace lower, nearing 6,820.82, the 38.2% fibo level of the 6,527.28-7,002.27 advance.

Trending setups are mixed. The short-term 21-Day EMA has turned higher, now at 6,836.26 and may provide support to price action. The 50-Day EMA is flat with the 100-Day EMA trending southbound. The 100/50-Day EMA’s lie at 7,051.45 and 6,905.34 respectively.

Momentum setups are a little more positive. The RSI continues to hold above the 50 level, at 51. The MACD trends higher though remains in negative territory.

Key levels to watch out on the downside are:

  • 6,851.97
  • 6,820.82
  • 6,677.96

Weekly Pivot Points

7,242.00

R3

7,122.13

R2

7,015.77

R1

6,895.90

PP

6,789.54

S1

6,669.67

S2

6,563.31

S3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

© Akif SH. Din MSTA, CFTe, AGORA-direct Limited, 16/01/2019

GBPUSD

  • Cable has had an impressive week, rallying 2.33% from its Monday low as momentum to prevent a no-deal brexit gained traction.
  • Market positioning shows a potential fall in shorts against sterling-a favoured position in the FX market for over two years.
  • Cable has rallied through a key level, namely 1.30. After rejecting twice, the rate pierced the downtrend line taken from the September 2018 high and could test the November 2018 high of 1.3172. Nearby is the 38.2% fib level, at 1.32. This round level could be pivotal to GBPUSD as fundamental risks from Parliament on Tuesday could hurt the rally.
  • A deeper topside target could potentially be 1.3429. This is the 50% fib level of the same down move.
  • Momentum setups are bullish with the daily MACD trending in positive territory.

 

 

 

 

 

 

 

 

 

 

 

EURUSD

  • EURUSD punched higher on Friday after slipping earlier in the week on comments from ECB chief Mario Draghi.
  • Mario Draghi stated economic risks have shifted to the downside. Future data is likely to be weaker than forecasted.
  • Thursdays fall holds above 76.4% fibo of the Nov-Dec rise.
  • EURUSD ignores German IFO miss, rallies hard towards the Ichimoku cloud top.
  • Standard line resides at 1.1429 and may reinforce resistance from the cloud top.
  • In addition to topside struggles is the 38.2% fib of the aforementioned rally. The flurry of factors may provide a problem for a continued EURUSD rally.

 

 

 

 

 

 

 

 

 

 

 

© Akif SH. Din MSTA, CFTe, AGORA-direct Limited, 25/01/2019

Recent positivity in the DAX 30 has led to a rally of 0.36% from its low set in December. The German benchmark managed to trade past the 61.8% fibo of the Feb 2016-Jan 2018 rally, to touch a low of 10,275.54. However, the recent bullishness has not eliminated the overall bearish technical picture. DAX remains below the down sloping neckline of the broken head & shoulders topping pattern. Moreover, price has found resistance at the valid uptrend line which dates back to 2011. Last week’s Doji candle failed just shy of the 21-WMA (Weekly Moving Average), reinforcing topside pressure.

Even as price has rallied higher on the back of improving sentiment, short- and medium-term trending setups continue to underpin bear themes. 50/21 WMA’s are trending south and may offer strong resistance to continued positivity. However, the separation between the two moving averages may suggest a possible oversold situation. 50/21 WMA’s currently reside at 12,016.08 and 11,344.06 respectively.

Momentum setups continue to display a negative backdrop. The 14-week RSI, which has broken out of its downtrend, remains below 50. The MACD has positively crossed, though remains significantly below 0.  

The DAX is showing signs of heightened topside risks, though price would need to trade through a flurry of resistance levels to eradicate negative pressures. Overall, the bias remains to the downside and it would be prudent to look for opportunities in that direction.

 

 

 

 

 

 

 

 

 

 

 

 

 

Download a Saxo Demo Account Here: Saxo Demo

© Akif SH. Din MSTA, CFTe, AGORA-direct Limited, 28/01/2019.

  • Gold trades at its highest level in more than 8 months on the back of a potential escalation in US-China trade tensions. This comes as the US charged telecommunication equipment giant, Huawei, over bank and wire fraud.
  • A weaker US Dollar also helped push spot gold through a key psychological level. The USD traded near a two-week low as the FED is expected to press pause on its interest rate hike cycle.
  • The precious metal has risen close to 13% since its 19-month low hit in August 2018.
  • Technically, gold is trading in a crucial resistance area between 1,300-1,3010. A confirmed break above 1,306 may bolster topside risks.
  • A rally through the top of an upsloping channel highlighted strong bullish momentum with prices just shy of 1,300. Sellers pushed prices back below the 61.8% fib level of the April-August (2018) selloff, though the correction soon found support at the channel top.
  • For now, gold must face resistance from the 76.4% fib level of the aforementioned decline if it continues to rally higher. A key resistance area between 1,320 and 1,326 may forestall gains if the fibo gives way.
  • Daily trending setups suggest a greater bullish scenario. The 50/21 EMA’s are biased up, reinforcing near-term positivity. However, their separation also suggests a potential overbought situation, possibly causing a near-term correction. Nevertheless, the 50/21 EMA’s should offer support to any retracements and currently reside at 1,268.34 and 1,286.60 respectively.
  • Daily momentum setups hold their positive stance. The 14-Day RSI continues to track higher, approaching the 70 level. The MACD lines are touching and a positive cross may confirm further upside.
  • Initial upside targets are the 76.4% fibo and the 1,320-1,326 resistance region. If these levels gave way, a deeper topside target would be the 23.6% fib extension level taken on from the August low.

Gold Monthly

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold Monthly - The crucial $1,300 level.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gold Daily

 

 

© Akif SH. Din MSTA, CFTe, AGORA-direct Limited, 28/01/2019

  • EURUSD continues to lift higher on Tuesday as German investor morale improved in March.
  • German ZEW economic sentiment came in at -3.6 from a prior read of -13.4 and a huge beat against forecasts of -11.0.
  • Brexit delay also providing fuel for the recent EUR rally.
  • After falling to as low as 1.1176 on a dovish ECB, EURUSD has made an impressive rally to trade back to as high as 1.1361. However, despite the recent strengthening in the common currency, the long-term theme remains bearish.
  • The pair is trading at a key level, where a break above may unmask further upside potential.
  • Trending setups reinforce the bearish stance. The long-term 200/100 EMA combination continue trending south. The 200/100 EMA’s reside at 1.1489 and 1.1391 respectively.
  • Alongside the downtrend line, the 50% fibo of the 1.1569-1.1176 fall lies nearby, at 1.1372.
  • Daily momentum are turning increasingly positive. The 14-period RSI is positively biased, rising through 50. The MACD has positively crossed though remains in negative territory.
  • Weekly standpoint continues negative theme.
  • Futures market show a net long USD position of c.$29billion, the highest since week ending Jan 1st.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

© Akif SH. Din MSTA, CFTe, AGORA-direct Limited, 19/03/2019.

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