20 Nov

WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY – 20 November 2022

/ CSFX Analytics

WEEKLY SNAPSHOT

Industrial Production (YoY) (Sep), U.K.

WHEN: WHAT IT HAD INFLUENCED:

14, NOVEMBER 2022 GBP and its subsequent pairs

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

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

Core PPI (YoY) (Oct), U.S.

WHEN: WHAT IT HAD INFLUENCED:

15 NOVEMBER 2022 USD and its subsequent pairs

WHAT HAPPENED: The core Producer Price Index (PPI) measures a change in input prices of raw, semi-finished or finished goods and services (excluding food & energy). If input costs rise, some will be absorbed by the producer and some passed on to the consumer. Conversely, if input costs fall, some of the decline will be enjoyed as wider profit margins by the producer and some will be passed on to the consumer in the form of lower prices. Because PPI impacts core consumer prices, it is watched by central bankers as part of fulfilling their mandate of 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.

Wage Price Index (QoQ) (Q3), AUSTRALIA

WHEN: WHAT IT HAD INFLUENCED:

16 NOVEMBER2022 AUD and its subsequent pairs

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

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

Gold falls on Fed rate hike prospects, on track for weekly dip

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED: Gold prices fell on Friday and were bound for a weekly dip following indications from U.S. Federal Reserve officials that more interest rate hikes were due as the bank seeks to lower inflation.

Spot gold fell 0.7% to $1,748.84 per ounce by 2:08 p.m. ET (1908 GMT), set for a weekly decline of about 1.3%, its biggest since mid-October.

U.S. gold futures settled down 0.5% at $1,754.4.

The slight pullback in gold after the recent rally has been through a technical retracement in the gold market, said David Meger, director of metals trading at High Ridge Future.

The pullback could continue going into next week’s December option expiration, which could cause a further consolidation in gold, Meger said, adding that the market overall seems focused on interest rate expectations from the Fed.

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

Oil falls on worries of U.S. rate hikes, China demand outlook

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED: Oil prices fell more than 3% on Thursday, with demand squeezed by mounting COVID-19 cases in China and fears of more aggressive hikes in U.S. interest rates.

Brent crude fell $3.08 to settle at $89.78 a barrel, down 3.3%. U.S. West Texas Intermediate (WTI) crude slid $3.95, or 4.6%, to settle at $81.64 per barrel.

“It’s kind of a triple whammy. We’ve got COVID-19 cases rising in China, interest rates are continuing to rise here in the U.S. and now we’ve got technical weakness in the market,” said Dennis Kissler, senior vice president of trading at BOK Financial.

The U.S. Consumer Price Index for All Urban Consumers (CPI-U) rose by 0.4 percent in October from September, the CPI data showed. This compares with the expectation of a 0.6 percent increase in consumer prices month over month.

Over the last 12 months, the CPI increased by 7.7 percent before seasonal adjustment, which again was lower than the 7.9 percent expected annual inflation for October.

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

Bitcoin scarcity rises as bad exchanges take 1.2M BTC out of circulation

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED: Historical data around crypto crashes revealed that 14 crypto exchanges, together, were responsible for the loss of at least 1,195,000 BTC, representing 6.3% of the 19.2 Bitcoin currently in circulation.

One of the biggest factors differentiating Bitcoin

from fiat currency and most cryptocurrencies is the hard limit of 21 million on its total circulating supply. However, the demise of numerous crypto exchanges over the last decade has permanently taken out at least 5.7% (1.2 million BTC) of the total issuable Bitcoin from circulation.

The lack of clarity around a crypto exchange’s proof-of-reserves came out as the primary reason for their sudden collapses, as seen recently with FTX. Historical data around crypto crashes revealed that 14 crypto exchanges, together, were responsible for the loss of 1,195,000 BTC, which represents 6.3% of the 19.2 Bitcoin currently in circulation.

The global crypto market that has been putting on a green rally has slightly turned reddish. BTC is currently trading at $16579.60 and ETH at $1,205.52. BTC is down by 0.60% and ETH by 0.44% in the last 24 hours. It is unclear now whether the two-day bullish stance was a bubble and whether the market is going back to its bearish stance.

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

5 KEY EVENTS TO WATCH OUT

CFTC EUR SPECULATIVE NET POSITIONS (Nov), U.K.

WHEN: WHAT IT INFLUENCES:

19 NOVEMBER 2022 GBP and it subsequent pairs

WHAT’S HAPPENING: The Commodity Futures Trading Commission’s (CFTC) weekly Commitments of Traders (COT) report provides a breakdown of the net positions for “”non-commercial”” (speculative) traders in U.S. futures markets.
All data corresponds to positions held by participants primarily based in Chicago and New York futures markets.
The Commitments of Traders report is considered an indicator for analysing market sentiment and many speculative traders use the data to help them decide whether to take a long or short position.

CFTC Natural Gas Net Positions, U.S.

WHEN: WHAT IT INFLUENCES:

19 NOVEMBER 2022 USD and its subsequent pairs

CFTC RUB Speculative Positions, Russia

WHEN: WHAT IT INFLUENCES:

20 NOVEMBER 2022 RUB and its subsequent pairs

NZD Credit Card Spending, New Zealand

WHEN: WHAT IT INFLUENCES:

21 NOVEMBER 2022 NZD and its subsequent pairs

WHAT’S HAPPENING:

Credit Card Spending measures the change in the credit card spending by individuals. It is closely correlated with consumer spending and confidence.

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

AUD Service PMI, Australia

WHEN: WHAT IT IN INFLUENCES

23 NOVEMBER 2022 AUD and its subsequent pairs

WHATS HAPPENING: The Australian Services Purchasing Managers Index (PMI) measures the activity level of purchasing managers in the services sector. The report is based on surveys of over 300 business executives in private sector services companies. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Replies from larger companies have a greater impact on the final index numbers than those from small companies. Results are presented by question asked, showing the percentage of respondents reporting an improvement, deterioration or no change since the previous month. From these percentages, an index is derived: a level of 50.0 signals no change since the previous month, above 50.0 signals an increase (or improvement), below 50.0 a decrease (or contraction). Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance. A higher-than-expected reading should be taken as positive/bullish for the AUD, while a lower-than-expected reading should be taken as negative/bearish for the AUD.

EQUITIES IN THE COMING WEEK

Auto desk to announce its Quarterly Results on 22 November, EPS estimated to 1.07 per share.
Dollar Tree Inc. is to announce its Quarterly Results on 22 NOVEMBER 2022, with EPS estimated to be 1.17 per share.
National steel company to announce its Quarterly Results on 23 NOVEMBER 2022, EPS estimated to 0.13 per share.
UP Health Inc, to announce its Quarterly Results on 23 NOVEMBER 2022, EPS estimated to be 0.08 per share.
EVEX is to announce its Quarterly Results on 23 NOVEMBER 2022, EPS estimated to be 0.09 per share.