Weekly Technical Analysis & Price Market Strategy

19 Feb

Weekly Technical Analysis & Price Market Strategy – 19 February 2023

/ CSFX Analytics

WEEKLY SNAPSHOT

GDP (QoQ) (Q4), U.K.

WHEN: WHAT IT HAD INFLUENCED:

14 FEBRUARY 2023 GBP 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.

EURGBP is currently in a downward channel. The further downside can be seen in the coming week.

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

WHEN: WHAT IT HAD INFLUENCED:

14 FEBRUARY 2023 USD and its subsequent pairs

WHAT HAPPENED: 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.

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

Employment change (Jan), AUD

WHEN: WHAT IT HAD INFLUENCED:

16 FEBRUARY 2023 AUD and its subsequent pairs

WHAT HAPPENED: Employment Change reports the change in the number of people employed across Australia. Jobs and the income they generate is an important factors in consumer spending.

AUDUSD is trading in a downward channel. The further downside can be seen in the coming week.

Gold futures post 3rd weekly loss while clinging to mid $1,800

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED: Gold futures posted their third weekly loss while clinging to support at the mid-$1,800 level as bulls in the space tried to discern direction amid calls by Federal Reserve officials for sharper rate hikes as U.S. inflation proved stickier than thought.

Gold for April delivery on New York’s Comex settled Friday’s trading at $1850.20 an ounce, down $1.60, or 0.01%. For the week, the benchmark gold futures contract lost $12.60, or 0.7%.

The spot price of gold, more closely followed than futures by some traders, was at $1,842.15 by 15:00 ET (20:00 GMT), up $5.66, or 0.3%.

Some investors see gold as a hedge against inflation (meaning it should be bought as a store of value) and while others view it as a liability (in the event the Fed hikes rates further, boosting the dollar instead). The tug-of-war between the two sides is one reason for the yellow metal being stuck at the mid-$1,800 level.

“Gold’s vulnerability to further downside, however, should be limited as central banks appear poised to increase their bullion holdings,” said Ed Moya, analyst at online trading platform OANDA. “Global recession risks are returning and that should lead to some haven flows for gold. “

U.S. wholesale prices, one of the key determinants of inflation, rose their most in seven months in January, the Labor Department reported on Thursday.

That was after Tuesday’s report on consumer prices from the department that again suggested stickier-than-thought inflation.

Since the updated data on inflation emerged, Federal Reserve officials have been girding for an extended period of high-interest rates, including a return to a 50-basis point hike in March, saying creeping inflation makes the 25-basis point quantum that the central bank agreed on this month untenable.

GOLD is trading in up and down channels; a downside will be seen in the coming days.

Oil settles down $2/bbl., ends week lower on Fed worries, ample supply

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED: Oil settled down $2 a barrel on Friday and ended the week markedly lower, as traders worried that future U.S. interest rate hikes could weigh on demand and got nervous about mounting signs of ample crude and fuel supply.

On Thursday, two Fed officials warned additional hikes in borrowing costs are essential to curb inflation. The sentiments lifted the U.S. dollar, making oil more expensive for holders of other currencies.

Brent crude futures settled down $2.14 or 2.5%, to $83.00 a barrel, falling 3.9% week on week. West Texas Intermediate (WTI) U.S. crude settled down $2.15, or 2.7%, to $76.34, falling 4.2% from last Friday’s settlement.

“Rate hike jitters have returned with a vengeance,” said Stephen Brennock of oil broker PVM.

Various signs of ample supply also weighed on the market.

Russian oil producers expect to maintain current volumes of crude oil exports, despite the government’s plan to cut oil output in March, the Voodooist newspaper said on Friday, citing sources familiar with companies’ plans.

The latest snapshot of U.S. supplies, released on Wednesday, showed crude inventories in the week to Feb. 10 rose by 16.3 million barrels to 471.4 million barrels, their highest level since June 2021.

“Because oil storage is at a 19-month high, refiners are going to stretch out turnaround season for as long as they can,” said Bob Yawger, director of energy futures at Mizuho.

Heating oil cracks fell 5% on Friday as warm weather sapped demand for the fuel in mid-February.

The oil and gas rig count, an early indicator of future output, fell by one to 760 in the week to Feb. 17, energy services firm Baker Hughes Co said on Friday.

Despite this week’s rig decline, Baker Hughes said the total count was still up 115, or 18%, over this time last year.

Some support came from moves this week by the International Energy Agency and the Organization of the Petroleum Exporting Countries to raise their forecasts for global oil demand growth this year, citing expectations for more Chinese demand.

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

Around 25% of new crypto tokens looked like pump-and-dump schemes in 2022, a report says

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED: Creators of crypto token pump-and-dump schemes made an estimated $30 million in profits from selling off their holdings before the token value plummeted, blockchain-analysis firm Chain analysis said in a report Thursday.

Out of 40,521 crypto tokens that were launched and traded in 2022, about a quarter of them saw a drastic price decline in the first week, indicating possible pump-and-dump activity, the report said.

The researchers defined a “drastic price decline” as any token that saw a drop of 90% or more in the first week of trading, which they said could suggest that the token’s earliest holders dumped the token extremely fast.

In traditional finance, pump-and-dump schemes refer to when holders of a tradable asset heavily promote it to other investors, often misleading them into investing, and thereby causing the price to rapidly rise as the new investors buy in. The holders then sell their overvalued shares at a profit, causing a sudden price drop, leaving the new investors stuck with a low asset value.

The report looked at all tokens launched on the Ethereum and BNB block chains in 2022. While more than 1.1 million tokens were launched last year, most saw no traction as measured by activity on decentralized exchanges. The research focused on projects that achieved a minimum of 10 swaps and four consecutive days of trading in the week following their launch, which narrowed the 1.1 million number to 40,521.

Meanwhile, the prices of major cryptocurrencies have recovered in 2023 from the latter half of 2022. Bitcoin BTCUSD, -0.31% was trading at $24,575.21, up 1.8% over the past 24 hours, according to CoinDesk data. Earlier on Thursday, it soared past $25,000. Ethereum ETHE, +4.64% was trading at $1,691.05, up 1.6% over the past 24 hours, according to Coin Desk data.

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

5 KEY EVENTS TO WATCH OUT

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

WHEN: WHAT IT INFLUENCES:

23 FEBRUARY 2023 GBP 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 the forecast is generally supportive (bullish) for the EUR, while a weaker-than-forecast reading is generally negative (bearish) for the EUR.

Initial Jobless Claims, U.S.

WHEN: WHAT IT INFLUENCES:

23 FEBRUARY 2023 USD and its subsequent pairs

WHAT’S HAPPENING: 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.

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

Wage Price Index (QoQ) (Q4), AUD

WHEN: WHAT IT INFLUENCES:

22 FEBRUARY 2023 AUD and its subsequent pairs

WHAT’S HAPPENING: The Wage Price Index reports the change in the number of money businesses and the government in Australia pay for labor, relative to the prior quarter. The figure excludes bonuses. It is an indicator of potential inflationary pressures.

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

Core Retail Sales (MoM) (Dec), CAD

WHEN: WHAT IT INFLUENCES:

21 FEBRUARY 2023 CAD and its subsequent pairs

WHAT’S HAPPENING: Retail Sales gauges the change in the aggregate value of sales at the retail level across the country (excluding automobile sales). It is an important indicator of consumer spending accounting for most of the overall economic activity.

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

RBNZ Interest Rate Decision, NZD

WHEN: WHAT IT INFLUENCES:

22 FEBRUARY 2023 NZD and its subsequent pairs

WHAT’S HAPPENING: The Reserve Bank of New Zealand (RBNZ) governor decides where to set the rate after consulting senior bank staff and external advisers. As short-term interest rates are an important determinant of currency Valuation.

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.

EQUITIES IN THE COMING WEEK

BERKSHIRE HATHAWAY INC. (BRK.A) to announce its Quarterly Results on 27 FEBRUARY 2023, EPS is estimated to be 5305.83 per share while revenue is estimated at 79.837B.
NVIDIA CORPORATION (NVDA) is to announce its Quarterly Results on 22 FEBRUARY 2023, EPS is estimated to 0.81 per share while revenue is estimated at 6.013B.
WALMART INC. (WMT) to announce its Quarterly Results on 21 FEBRUARY 2023, EPS estimated to 1.52 per share while revenue estimated 159.759B.
DELL TECHNOLOGIES INC. (DELL) to announce its Quarterly Results on 24 FEBRUARY 2023, EPS estimated to 1.65 per share while revenue estimated 23.515B.
INTUIT INC. (INTU) to announce its Quarterly Results on 23 FEBRUARY 2023, EPS estimated to 1.47 per share while revenue estimated 2.906B.