WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY – 09 October 2022

09 Oct 2022

WEEKLY SNAPSHOT

Manufacturing PMI (Sep), U.K.

WHEN: WHAT IT HAD INFLUENCED:

03^rd OCTOBER 2022 GBP and its subsequent pairs

WHAT HAPPENED: The Manufacturing Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below 50 indicates contraction.

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

ADP Nonfarm Employment Change (Sep), U.S.

WHEN: WHAT IT HAD INFLUENCED:

05^th OCTOBER 2022 USD and its subsequent pairs

WHAT HAPPENED: The ADP National Employment Report is a measure of the monthly change in non-farm, private employment, based on the payroll data of approximately 400,000 U.S. business clients.

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

Retail Sales (MoM), AUSTRALIA

WHEN: WHAT IT HAD INFLUENCED:

04^th OCTOBER 2022 AUD and its subsequent pairs

WHAT HAPPENED: Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.

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

Gold, Copper Rally Eases as Fed Downplays Pivot Hopes

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED:

Gold and copper prices were muted on Thursday, pausing a recent rally after hawkish comments from Federal Reserve officials and signs of strength in the U.S. economy dented expectations for a dovish pivot by the central bank.

Metal markets rallied strongly this week after weak manufacturing data in the United States drove up expectations that the Fed would ease its hawkish stance to prevent more economic disruption from rising interest rates.

But Fed officials reiterated the bank’s hawkish stance on Wednesday. Better-than-expected service sector data and signs of a robust labor market also showed that the underlying U.S. economy remained strong, giving the central bank enough space to keep raising rates at a fast pace.

Spot gold rose 0.1% to $1,718.40 an ounce, while gold futures rose 0.4% to $1,726.70 an ounce by 19:31 ET (23:31 GMT). Both indicators fell slightly on Wednesday.

The dollar also resumed its upward trajectory, breaking a nearly six-day losing streak and rallying nearly 1% on Wednesday. Focus now turns to upcoming U.S. nonfarm payrolls data on Friday to gauge the strength of the jobs market.

Still, gold retained most of its gains made this week, trading comfortably above the $1,700 level as pressure from a hawkish Fed somewhat eased. The yellow metal also benefited from a measure of safe haven buying in recent sessions as investors feared a deeper economic collapse, particularly in the UK and the Eurozone.

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

Oil near three-week high on cuts to OPEC+ output targets

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED:

Oil prices held near three-week highs on Thursday after OPEC+ agreed to tighten global crude supply with a deal to cut production targets by 2 million barrel per day (bpd), the largest reduction since 2020.

Brent crude futures edged down 16 cents, or 0.2%, to $93.21 per barrel by 1020 GMT after settling 1.7% up in the previous session.

U.S. West Texas Intermediate (WTI) crude futures lost 14 cents, or 0.2%, to $87.62 after closing 1.4% up on Wednesday.

The agreement between the Organization of Petroleum Exporting Countries (OPEC) and allies including Russia, a group known collectively as OPEC+, comes ahead of a European Union embargo on Russian oil and would squeeze supplies in an already tight market, adding to inflation.

“We believe that the price impact of the announced measures will be significant,” said Jorge Leon, senior vice-president at Rystad Energy.

“By December this year Brent would reach over $100/bbl, up from our earlier call for $89.”

Saudi Energy Minister Abdulaziz bin Salman said the real supply cut would be about 1 million to 1.1 million bpd. Saudi Arabia’s share of the cut is about 0.5 million bpd.

Several OPEC+ members have been struggling to produce at quota levels because of under investment and sanctions.

U.S. President Joe Biden’s administration criticised the deal as “short-sighted” and the White House said Biden would continue to assess whether to release further strategic oil stocks to lower prices.

WTI CRUDE OIL was trading in an up channel; before there is breakout upside.

ETH’s Price Gradually Climbs as Bear Sell Pressure Alleviates

WHAT IT HAD INFLUENCED:

ETHEREUM

WHAT HAPPENED:

ETH), the altcoin with a market cap of $167,645,055,379 at press time, has seen its price rise by 1.62% over the last 24 hours according to the CoinMarketCap. This has taken its price to $1,374.15. Furthermore, the weekly performance for the altcoin is also in the green as ETH’s price finds itself 2.43% up over the last week as well.

Data shared by Santiment in the early hours of this morning shows that ETH’s current levels were last visited on September 27 of this year, and that it appears that traders have turned their interest to other coins. As a result of this, ETH’s price has been left to gradually rise with reduced levels of resistance.

ETH’s trading volume has picked up 12.52% to take the daily volume to $11,215,030,623. Its price has also strengthened against the crypto market leader, Bitcoin (BTC) by 0.76%. Therefore, one ETH token is worth approximately 0.0676 BTC.

ETEHREUM is trading in an up channel; an upside will be seen in the coming days.

5 KEY EVENTS TO WATCH OUT

Claimant Count Change (Sep), U.K.

WHEN: WHAT IT INFLUENCES:

11^th OCTOBER 2022 GBP and its subsequent pairs

WHAT’S HAPPENING: Claimant Count Change measures the change in the number of unemployed people in the U.K. during the reported month. A rising trend indicates weakness in the labor market, which has a trickle-down effect on consumer spending and economic growth.

A higher-than-expected reading ought to be taken as negative/bearish for the GBP, whereas a lower-than-expected reading should be taken as positive/bullish for the GBP.

PPI (MoM) (Sep), U.S.

WHEN: WHAT IT INFLUENCES:

12^thOCTOBER 2022 USD and its subsequent pairs

WHAT’S HAPPENING: The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, which accounts for the majority of overall inflation.

A higher-than-expected reading ought to be taken as positive/bullish for the USD, whereas a lower-than-expected reading should be taken as negative/bearish for the USD.

CPI (YoY) (Sep), GERMANY

WHEN: WHAT IT INFLUENCES:

13^th OCTOBER 2022 EUR and its subsequent pairs

WHAT’S HAPPENING: The German Consumer Price Index (CPI) measures the changes in the price of goods and services purchased by consumers.

A higher-than-expected reading ought to be taken as positive/bullish for the EUR, whereas a lower-than-expected reading should be taken as negative/bearish for the EUR.

Industrial Production (MoM) (Aug), EURO ZONE

WHEN: WHAT IT INFLUENCES:

12^th OCTOBER 2022 EUR and its subsequent pairs

WHAT’S HAPPENING: Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

A higher-than-expected reading ought to be taken as positive/bullish for the EUR, whereas a lower-than-expected reading should be taken as negative/bearish for the EUR.

Wholesale Sales (MoM) (Aug), CANADA

WHEN: WHAT IT INFLUENCES:

14^th OCTOBER 2022 CAD and its subsequent pairs

WHAT’S HAPPENING: Wholesale Sales measures the change in the total value of sales at the wholesale level. It is a leading indicator of consumer spending.

A higher-than-expected reading ought to be taken as positive/bullish for the CAD, whereas a lower-than-expected reading should be taken as negative/bearish for the CAD.

EQUITIES IN THE COMING WEEK

PepsiCo (PEP) to announce its Quarterly Results on 12^th OCTOBER 2022, EPS estimated to 1.84 per share while revenue estimated 20.72B.
BlackRock (BLK) to announce its Quarterly Results on 13^thOCTOBER 2022, EPS estimated to 8.02 per share while revenue estimated 4.38B.
UnitedHealth (UNH) to announce its Quarterly Results on 14^thOCTOBER 2022, EPS estimated to 5.43 per share while revenue estimated 80.52B.
Wells Fargo &Co (WFC) to announce its Quarterly Results on 14^thOCTOBER 2022, EPS estimated to 1.1 per share while revenue estimated 18.72M.
Delta Air Lines (DAL) to announce its Quarterly Results on 13^th OCTOBER 2022, EPS estimated to 1.56 per share while revenue estimated 12.92B.