Technical Analysis Report By Our Expert – 29 August 2022
29 Aug 2022
U.S. DOLLAR INDEX SURGED TO 20 YR HIGH
Asian Pacific stock markets tumbled on Monday after hawkish comments from Fed. The Shanghai Composite is down 0.14% at 3,231.74. Overall, the Singapore MSCI is down 1.85% at 288.70. Over in Hong Kong, the Hang Seng Index is down 0.48% at 20,029.00. In Japan, the Nikkei 225 is down 2.66% at 27,850.00, while the Topix index is down 1.79% at 1944.13. South Korea’s Kospi is down 2.09% at 2,429.68. Australia S&P/ASX 200 down 1.93% at 6966.90.
Top News of the Day:
The U.S dollar surged to a 20-year high against a basket of currencies on Monday after Federal Reserve Chair Jerome Powell signalled interest rates would be kept higher for longer to bring down soaring inflation.
The dollar index scaled to a fresh two-decade peak of 109.44 in the Asia trade, with greenback strength pushing other major currencies to new lows and putting pressure on its emerging markets counterparts.
Market Summary as per 26/08/2022:
European equities Friday closing. The DAX futures contract in Germany traded down 2.26% at 12,971.47, CAC 40 futures down 1.68% at 6274.27 and the UK 100 futures contract in the U.K. down 0.70% at 7,427.32.
In the U.S. on Wall Street, the Dow Jones Industrial Average closed down 3.03% at 32283.41. The S&P 500 down 3.37% at 4057.66 and the Nasdaq 100 down 4.10% at 12605.17, NYSE closes down 2.67% at 15178.20.
Top Market News Today:
In the Forex market, GBPUSD down 0.71% at 1.1651. The USDJPY up 1.05% at 138.959. The USDCHF up 0.42% at 0.9698. EURUSD down 0.49% at 0.9915, EUR/GBP up 0.34% at 0.8510. The USD/CNY up 0.64% at 6.9156 at the time of writing.
In the Commodity market U.S. Gold futures down 0.78% at $1,723.30. Elsewhere, Silver futures down 1.85% at $18.534 per ounce, Platinum flat at $863.50 per ounce, and Palladium flat at $2110.50.
Crude Oil up on Monday; Brent Crude Oil up 1.03% at $101.74 per barrel while U.S. West Texas Intermediate (CLc1) up 1.33% at $93.83.
In the Cryptocurrency Markets, Bitcoin at 19655.00 down 3.75%, Ethereum up 1.78% at 1451.10, Litecoin at 54.64 up 2.46%, at the time of writing.
Top Market Segment to Watch Out Today:
GOLD: Gold prices sank to a one-month low on Monday following hawkish signals from the U.S. Federal Reserve. Spot gold prices slumped 0.7% to $1,726.06 an ounce, while gold futures sank 0.7% to $1,727.50 an ounce by 22:20 ET (02:20 ET). Both instruments were trading around their weakest levels since late-July.
US: Democratic U.S. Senator Elizabeth Warren said on Sunday that she was very worried that the Federal Reserve was going to tip the nation’s economy into recession and that interest rate hikes would put people out of work.
“Do you know what’s worse than high prices and a strong economy? It’s high prices and millions of people out of work. I am very worried that the Fed is going to tip this economy into recession,” Warren told CNN on Sunday.
The U.S. central bank’s chief, Jerome Powell, warned on Friday that Americans were headed for a painful period of slow economic growth and possibly rising joblessness as the Federal Reserve raises interest rates to fight high inflation.
Powell said in a speech on Friday the Fed will raise rates as high as needed, and would keep them there “for some time” to bring down inflation that is running at more than three times the Fed’s 2% goal.
Warren said inflation was high partly due to supply chain problems, the COVID-19 pandemic and the war between Russia and Ukraine.
Eurozone: European Central Bank policymakers made the case on Saturday for a large interest rate hike next month as inflation remains uncomfortably high and the public may be losing trust in the bank’s inflation-fighting credentials.
The ECB raised rates by 50 basis points to zero last month and a similar or even bigger move is now expected on Sept 8, partly on sky-high inflation and partly because the U.S. Federal Reserve is also moving in exceptionally large steps.
Speaking at Fed’s annual Jackson Hole Economic Symposium, ECB board member Isabel Schnabel, French Central Bank chief Francois Villeroy de Galhau and Latvian central bank Governor Martins Kazaks all argued for forceful or significant policy action.
Markets were betting on a 50-basis point move on Sept 8 until just days ago but a host of policymakers, speaking on and off record, now argue that a 75-basis point move should also be considered.
Top Economic Releases Today:
- AUSTRALIA Building Approvals (MoM) (Jul) today at 21:30 this time estimated -2.00%, previously which was -0.70%.
- this time estimated 1.27, previously which was 1.27.
- U.S. 6-Month Bill Auction today at 11:30 previously which was 3.110%.
- EURO ZONE ECB’s Lane Speaks today at 9:00.
- U.S. Fed Vice Chair Brainard Speaks today at 14:15.
Forex Technical Analysis
TRADE SUGGESTION- SELL AT 1.1660, TAKE PROFIT AT 1.1653 AND STOP LOSS AT 1.1668
TRADE SUGGESTION- SELL AT 0.9916, TAKE PROFIT AT 0.9911 AND STOP LOSS AT 0.9920
TRADE SUGGESTION- SELL AT 161.835, TAKE PROFIT AT 160.797 AND STOP LOSS AT 162.751
TRADE SUGGESTION- BUY AT 143.162, TAKE PROFIT AT 143.247 AND STOP LOSS AT 143.092
Indices Technical Analysis
EURO STOXX 50
TRADE SUGGESTION- SELL AT 3549.00 TAKE PROFIT AT 3527.00 AND STOP LOSS AT 3575.00
Commodities Technical Analysis
WTI CRUDE OIL
TRADE SUGGESTION- SELL AT 93.45 TAKE PROFIT AT 92.32 AND STOP LOSS AT 94.43
TRADE SUGGESTION- SELL AT 1724.28, TAKE PROFIT AT 1717.39 AND STOP AT 1732.07
Cryptocurrency Technical Analysis
TRADE SUGGESTION- SELL AT 1448.00 TAKE PROFIT AT 1252.70 AND STOP AT 1590.37