WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY

11 Dec

WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY – 11 December 2022

/ CSFX Analytics

WEEKLY SNAPSHOT

Service PMI (Nov), U.K.

WHEN: WHAT IT HAD INFLUENCED:

5 DECEMBER 2022 GBP and its subsequent pairs

WHAT HAPPENED: The Services Purchasing Managers’ Index (PMI) is a diffusion index incorporating survey results provided by firms in the services sector throughout the country. A reading above fifty suggests the service sector is expanding, while a reading below fifty suggests the service sector is in contraction. Policymakers and traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, rather than waiting for the hard data to emerge. The service sector is far larger than manufacturing sector and thus accounts for the largest share of the country’s economic output

GBPTRY is trading in an upward channel. Further upside can be seen in the coming week.

Initial Jobless Claims, U.S.

WHEN: WHAT IT HAD INFLUENCED:

8 December 2022 USD and its subsequent pairs

WHAT HAPPENED: Initial Jobless Claims measures the number of people who filed for unemployment insurance for the first time during the past week. This is the timeliest U.S. economic data, but the market impact varies from week to week

USDZAR is currently in the upward channel. Further upside can be seen in the coming week.

GDP (QoQ) (Q3), AUSTRALIA

WHEN: WHAT IT HAD INFLUENCED:

7 December 2022 AUD and its subsequent pairs

WHAT HAPPENED: Gross Domestic Product (GDP) gauges the inflation-adjusted value of all goods and services produced within the economy. It is the most comprehensive measure of economic activity and an important indicator of economic health

AUDNZD is currently in the downward channel. Further downside can be seen in the coming week.

Gold steadies ahead of U.S. inflation data

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED: Gold prices moved little on Friday as investors hunkered down ahead of key U.S. inflation data due later in the day, while the red metal headed for a second positive week amid optimism over loosening COVID restrictions in China.

Bullion prices were set to close the week a touch lower after paring a majority of earlier losses, as fears of a recession invited some safe haven plays back into the yellow metal. Recent weakness in the dollar also benefited gold prices.

Spot gold hovered around $1,789.43 an ounce, while gold futures steadied at $1,801.25 an ounce by 18:56 ET. Both instruments were set to lose about 0.4% this week, having sunk as low as $1,765.86 an ounce.

Focus is now squarely on U.S. producer price index inflation data for November, due later in the day. The reading is expected to have eased further from the prior month, signalling that rising interest rates and tightening monetary conditions are having their intended effect.

But any signs that inflation remained sticky during the month could trigger more losses in markets, given that the Federal Reserve is likely to hike interest rates for longer in such a scenario. Several market participants warned that this could trigger a recession in 2023.

Rising interest rates were the biggest weight on gold prices this year, dragging the metal off annual highs as the opportunity cost of non-yielding assets rose.

GOLD is trading in up channel; a upside will be seen in the coming days.

Oil drops in volatile trade, records biggest weekly slump in months

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED: Oil price settled lower in volatile trading on Friday, with both benchmarks recording their biggest weekly declines in months, as growing recession fears negated any supply woes after weak economic data from China, Europe and the United States.

U.S. West Texas Intermediate crude settled 44 cents lower at $71.02 a barrel, a new low for 2022. Brent crude settled 5 cents lower at $76.10 per barrel.

“Any concerns about supply are secondary to worries about the economy,” Mizuho analyst Robert Yawger said.

Oil prices had found some support and risen more than 1% earlier in the session after Russian President Vladimir Putin said the world’s biggest energy exporter could cut output in response to a price cap on its crude oil exports.

However, a slightly higher-than-expected rise in U.S. producer prices in November, and news of a partial restart on the Keystone Pipeline undid those gains and pushed the benchmarks more than a dollar lower. Keystone shut earlier this week after a 14,000-barrel oil leak in Kansas.

The U.S. producer prices index (PPI) rose slightly more than expected in November amid a jump in the costs of services, according to a report from the U.S. Labour Department.

The increase may make it more likely that the Federal Reserve will “step on the accelerator” on interest rate hikes, furthering fears of a looming recession, Yeager said.

Both crude benchmarks posted weekly losses of around 10% each. It was the biggest weekly decline since April for the U.S. WTI futures, and since early August for Brent

WTI CRUDE OIL is trading in a down channel; a downside will be seen in the coming days.

MasterCard Chief Sees Crypto Market ‘Resetting’ After Crypto Exchange’s collapse

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED: FTX, the collapsed cryptocurrency exchange platform founded by Sam Banksman-Fried (SBF), may have done more than just wipe the entire crypto market with billions worth of capitalization in just a matter of few days.

In the wake of one of the worst and most bemusing digital currency-related company implosions to date, MasterCard’s Grace Berker is convinced that something good came out of the market-crippling event.

The start-up engagement director for the payment processing firm believes the series of events involving FTX provides an opportunity for the industry and its participants to take a break and reset in order to better assess their next steps moving forward.

Moreover, Berker is also adamant that this “setback” brought about by the FTX crash won’t be enough to dissuade institutional investors to continue exploring the ever-growing and extremely volatile crypto space.

BTC is currently trading at $17144.70 and ETH at $1,263.40. BTC is up by 0.6% and ETH by 0.04% in the last 24 hours.

BITCOIN is trading in a down channel; a downside will be seen in the coming days.

5 KEY EVENTS TO WATCH OUT

Manufacturing Production (MoM) (Oct), U.K.

WHEN: WHAT IT INFLUENCES:

12 DECEMBER 2022 GBP and its subsequent pairs

WHAT’S HAPPENING: Manufacturing Production measures the change in the total inflation-adjusted value of output produced by manufacturers. Manufacturing accounts for about eighty percent of overall Industrial Production.

A reading that is stronger than forecast is supportive (bullish) for the EUR, while a weaker than forecast reading is negative (bearish) for the EUR.

CPI (MoM) (Nov), U.S.

WHEN: WHAT IT INFLUENCES:

13 DECEMBER 2022 USD and its subsequent pairs

WHAT’S HAPPENING: The Consumer Price Index (CPI) measures the change in the prices of goods and services contained in a basket of consumer items. The Central bank pays very close attention to this figure in its role of maintaining price stability.

A reading that is stronger than forecast is generally supportive (bullish) for the USD, while a weaker than forecast reading is generally negative (bearish) for the USD.

GDP (QoQ) (Q3), New Zealand

WHEN: WHAT IT INFLUENCES:

13 DECEMBER 2022 NZD and its subsequent pairs

WHAT’S HAPPENING: Gross Domestic Product (GDP) gauges the inflation-adjusted value of all goods and services produced within the economy. It is the most comprehensive measure of economic activity and an important indicator of economic health.

A reading that is stronger than forecast is generally supportive (bullish) for the NZD, while a weaker than forecast reading is generally negative (bearish) for the NZD

Manufacturing Sales (MoM) (Oct), CANADA

WHEN: WHAT IT INFLUENCES:

14 DECEMBER 2022 AUD and its subsequent pairs

WHAT’S HAPPENING: Manufacturing Sales reports the change in the value of sales made by manufacturers across Canada.

A reading that is stronger than forecast is generally supportive (bullish) for the CAD, while a weaker than forecast reading is generally negative (bearish) for the CAD.

Tankan Large Manufacturers Index (Q4), JAPAN

WHEN: WHAT IT INFLUENCES:

14 DECEMBER 2022 JPY and its subsequent pairs

WHAT’S HAPPENING: The Tankan Large Manufacturing Index reports the level of business conditions amongst large firms within the Japanese manufacturing sector. On the index, a negative reading points to deteriorating conditions; whereas a reading above zero below indicates conditions are improving. The data is compiled from survey responses from approximately 1,200 large Japanese manufacturers.

A reading that is stronger than forecast is generally supportive (bullish) for the JPY, while a weaker than forecast reading is generally negative (bearish) for the JPY.

EQUITIES IN THE COMING WEEK

Johnson Outdoors (JOUT) to announce its Quarterly Results on 9 DECEMBER 2022, EPS estimated to 0.97 per share while revenue estimated 196.4M.
Oracle (ORCL) to announce its Quarterly Results on 12 DECEMBER 2022, EPS estimated to 1.17 per share while revenue estimated 11.95B.
Adobe Inc., (ADB) to announce its Quarterly Results on 15 DECEMBER 2022, EPS estimated to 3.50 per share while revenue estimated 4.527B.
Nordson Corporation (NDSN) to announce its Quarterly Results on 14 DECEMBER 2022, EPS estimated to 2.33 per share while revenue estimated 651.288M.
ABM Industries Incorporated (ABM) to announce its Quarterly Results on 13 DECEMBER 2022, EPS estimated to 0.88 per share while revenue estimated 1.962B.