WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY

16 Oct

WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY – 16 October 2022

/ CSFX Analytics

WEEKLY SNAPSHOT

Claimant Count Change (Sep), U.K.

WHEN: WHAT IT HAD INFLUENCED:

11^th OCTOBER 2022 GBP and its subsequent pairs

WHAT HAPPENED: 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.

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

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

WHEN: WHAT IT HAD INFLUENCED:

12^th OCTOBER 2022 USD and its subsequent pairs

WHAT HAPPENED: 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.

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

Industrial Production (MoM) (Aug), EURO ZONE

WHEN: WHAT IT HAD INFLUENCED:

12^th OCTOBER 2022 EUR and its subsequent pairs

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

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

Gold Has Worst Week in 2 Months as U.S. Yields at 14-Year High

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED:

The dollar is stealing every bit of safe-haven shine out there, leaving gold — the original precious metal — with very little lustre.

Gold’s benchmark futures contract on New York’s Comex, December, settled at $1,648.90 an ounce, down $28.10, or 1.7%, on the day, after a session low at $1,646.15. For the week, it lost just over $60, or 3.5%.

The spot price of bullion, which is more closely followed than futures by some traders, was at $1,645.24 by 14:00 ET (18:00 GMT), after a midday tumble to $1,640.71.

Investing.com data showed the weekly drop in gold was the metal’s worst since a near 4% drop during the week of early August.

Gold broke below key $1,650 support on Thursday before bulls in the space lucked out, as the dollar’s tumble on talk of peak-inflation in the U.S. helped the yellow metal recoup virtually all that it lost on the day.

Gold’s selling, however, resumed Friday as the Dollar Index rose for a seventh time in eight days. The index, which pits the dollar against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, reached a session high of 113.30. Technical charts indicated a very likely 120 high for the Dollar Index, said analysts.

GOLD is trading in down channel; an downside will be seen in the coming days.

Oil Down 7% on Week as U.S. Inflation Simply Unyielding

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED:

The Federal Reserve’s one-step-forward-two-steps-back fight against inflation is costing oil more dearly than the market’s optimists would want to admit.

Crude prices were down as much as 7% on the week, giving back about half of the past two weeks’ gains, after latest readings for U.S. retail sales and inflation showed the central bank was barely winning in its year-long battle against price pressures.

“The global growth outlook remains a major downside risk, also,” Craig Erlam, analyst at online trading platform OANDA, said, pointing to new lockdowns in China, the world’s largest crude oil importer, which has been fighting COVID flare-ups after a week-long holiday.

“With labor markets remaining tight and inflation stubborn, further downgrades could be on the cards,” Erlam added.

New York-traded West Texas Intermediate crude was down $3.50, or 3.9%, at $85.61 per barrel. For the week, it was down just over 7%. U.S. crude benchmark rose 17% over two prior weeks, in a powerful start to October, after a 12.5% drop in September and 24% loss for the third quarter.

London-traded Brent oil settled down $2.94, or 3.1%, at $91.63 per barrel. Brent had risen 13% over two prior weeks. The global crude benchmark was down 11% in September and dropped 22% in the third-quarter.

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

51% of Ethereum blocks are now compliant with OFAC standards

WHAT IT HAD INFLUENCED:

ETHEREUM

WHAT HAPPENED:

One month after the Merge, 51% of Ethereum blocks were compliant with OFAC standards, according to blockchain development Labrys’ data, as MEV-Boost relays take over market share.

OFAC stands for the Office of Foreign Assets Control, the entity in charge of enforcing United States economic sanctions, while MEV-Boost relays are centralized entities that act as trusted mediators between block producers and block builders. In this way, all Ethereum proof-of-stake (PoS) validators can outsource their block production to other builders.

This metric tracks how many blocks were built by OFAC-compliant MEV-Boost relays since the Merge. Due to Ethereum’s upgrade to a PoS consensus, MEV-Boost has been enabled to a more representative distribution of block proposers, rather than a small group of miners under proof-of-work (PoW).

Under a hard censorship scenario, “nodes would be forced by regulation to basically discard any blocks with any of these transactions in them.”

He also noted that even with soft censorship, when sanctioned transactions would eventually be validated, it would likely result in long waits and high-priority fees, making the user experience substandard.

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

5 KEY EVENTS TO WATCH OUT

CPI (YoY) (Sep), U.K.

WHEN: WHAT IT INFLUENCES:

19^th OCTOBER 2022 GBP and its subsequent pairs

WHAT’S HAPPENING: The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

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

Initial Jobless Claims, U.S.

WHEN: WHAT IT INFLUENCES:

20^thOCTOBER 2022 USD and its subsequent pairs

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

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

Core Retail Sales (MoM) (Aug), CANADA

WHEN: WHAT IT INFLUENCES:

21^st OCTOBER 2022 CAD and its subsequent pairs

WHAT’S HAPPENING: Core Retail Sales measures the change in the total value of sales at the retail level in Canada, excluding automobiles. It is an important indicator of consumer spending and is also considered a pace indicator for the Canadian economy.

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.

Employment Change (Sep), AUSTRALIA

WHEN: WHAT IT INFLUENCES:

19^th OCTOBER 2022 AUD and its subsequent pairs

WHAT’S HAPPENING: Employment Change measures the change in the number of people employed. Job creation is an important indicator of consumer spending.

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

CPI (QoQ) (Q3), NEW ZEALAND

WHEN: WHAT IT INFLUENCES:

17^th OCTOBER 2022 NZD and its subsequent pairs

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

EQUITIES IN THE COMING WEEK

Bank of America (BAC) to announce its Quarterly Results on 17^th OCTOBER 2022, EPS estimated to 0.7862 per share while revenue estimated 23.53B.
J&J (JNJ) to announce its Quarterly Results on 18^thOCTOBER 2022, EPS estimated to 2.52 per share while revenue estimated 23.48B.
TESLA (TSLA) to announce its Quarterly Results on 19^thOCTOBER 2022, EPS estimated to 1.04 per share while revenue estimated 22.65B.
Philip Morris (PM) to announce its Quarterly Results on 20^thOCTOBER 2022, EPS estimated to 1.37 per share while revenue estimated 7.43B.
Verizon (VZ) to announce its Quarterly Results on 21^st OCTOBER 2022, EPS estimated to 1.28 per share while revenue estimated 33.79B.