the daily chartist

Overview of Kiwi in the midst of a new high

published 1 day ago
NZD/USD

Technical view:
* A/D ratio is descending - accumulation is slowing down and we have a big divergence with the price level;
* Money flows are starting to turn south, as the capital outflow is following the A/D contraction;
* CM top/bottom indicator is in extreme top zone (overbought);

Fundamental view:
* Covid - 19 situation in New Zealand is somewhat under control, as meassures are being taken and followed by the public;
* Although both the NZD and USD interest rates are in par, the economies of the both countries are still experiencing a sluggish recovery;
* USD's demand starting to slowly pick up;

Possible short outcome towards the lower trend line and if: a break there, we may see the price fall towards the marked area, or a good bounce up back inside the overall uptrend.

SPX overextends it's buying potential. Bulls taking a break

published 2 days ago
SPX

Technically:

* CM top/bottom indicator signaling that a top is forming;

* A/D ratio decending as accumulation is nearing its peak;

* Money flows turning lower as money are going out of stocks;

Fundamentally:

* Labour market starts to hick up again as new Covid - 19 cases rise in the US;

* Labour market cracks will weigh in on other economic indicators;

* FED lower it's stimulus program in a steady pace;

Near - term correction is potential towards the lower trend line .

What's next for the upcoming week on the calendar 05.11 - 09.11

published 2 years ago

Soften start of the new week and month, but ended yet again in badly for the major indexes and stocks after the rumours that Trump ordered to the administration to draft a proposal on an eventual positive outcome of the talks between China were denied by the administration itself and after Apple told that they won't disclose anymore the number on iPhone sales. Apple stocks plunged with 6% on Friday. 

So here are the things that we need to have in mind when we set our trading set up for next week:

Monday we have GBP Service PMI 53.4/53.9 and CAD BOC Gov Poloz speaking before the US session. USD ISM Non-Manufacturing PMI follows after the opening.

On Tuesday we have German Factory Orders -0.4%/2% and German Final Services PMI to remain flat at 53.6/53.6. Euro PPI follows with a forecast of 0.4% vs 0.3%. CAD Building Permits is for the US session 0.3%/0.4%, US JOLTS Jo Openings with no current forecast, but at 7.14M previously. And of course, we have the Congressional Elections or the Midterm elections for a new Senate in the US!

Wednesday will offer us some data from German Industrial Production -0.1%/-0.3%, Euro Retail Sales -0.1%/0.7 and on the US side we have Crude Oil Inventories with no current forecast, but the last time the report showed there is a build of 3.2M barrels. 

Thursday we have German Trade Balance with a forecast of 21.2B vs 18.3B and the Euro Economic Bulletin and Economic Forecasts. Canada Housing Starts 195K vs previously 189K will be the prelude to the US opening and in the session itself, we are going to wait for the Unemployment Claims where previously they were 214K and the forecast is to remain at that number. Later we have FOMC statement, which is going to be without a press conference and the Funds rate, but there won't be a move on the rates as it is expected to be done in December. 

With closing the week on Friday we have GBP GDP 0.1%/0%, Manufacturing Production 0.1%/-0.2% and Prelim GDP 0.4%/0.6%. On the US side, we have PPI 0.3%/0.2%.

That's it for the recap of the most important events that will drive the markets for the next week. Type them, have them in mind and good luck to everyone and have a successful trading week!

 

 

Crude Oil in trouble

published 2 years ago
WTI Daily

For Crude everything started with the bearish engulfing bar on 4 October. Fundamentals weighed in on the price with heavy pressure from the sellers. On Sunday Iranian sanctions are going to take an effect so we are going to see an interesting opening for WTI on Monday. I personally think that the market has already priced in the effects, bringing down the price below $70 pb.  Selling has been heavy indeed as the price quickly found its way below the 50 SMA, the first channel line of the uptrend, under 61.8 Fibo and under the 200 SMA. DeMarker also formed a selling signal around the time the engulfing bar was formed. 

First scenario: Price opens with a gap down and depending on how fast it is covered and how much we will have a confirmation that we can begin to short the Crude with a stop loss at $72. In this scenario, the price will go down towards the 200 SMA where we will need to see a final breach and test to confirm that the instrument is going into a Bear market. 

Second scenario: Everything has been priced in already, the sanctions are not a surprise and Oil goes up with a gap on Monday. Price is stabilising for a move up where the market will form a balance between supply and demand and our idea of shorting the commodity will break down.

 

Sterling shows resilience

published 2 years ago
GBP/USD Daily

Cable has played out the double top very well as it was sold under pressure as a result from disappointing news surrounding Brexit talks and the overall USD strength. Even with the recent gains because the news came out that London will remain Europe's financial Gateway, the currency pair is still in a downtrend. The Friday's close shows it as the bar failed to breach the upper line of the channel and the price also closed under the psychological 1.3000. Don't be fooled by DeMarker showing a turn above 0.3 in the oversold zone. This has occurred, because of the sharp impulse after the news. The dollar was also sold heavily on Thursday. The price will test the neckline for sure on its way down and it's going to be a key level. 

First scenario: Sell on Monday opening with a stop loss at 1.32500.

Second scenario: Wait for a test on the neckline and open a short after the breakout and the confirmation. 

Third scenario: Price moves up from the neckline, moving away from the down channel and towards a test for the 50 SMA and an eventual 200 SMA test for early indications that the price will continue on its correction course.