Weekly Technical Analysis & Price Market Strategy

22 Jan

Weekly Technical Analysis & Price Market Strategy – 21 January2023

/ CSFX Analytics

WEEKLY SNAPSHOT

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

WHEN: WHAT IT HAD INFLUENCED:

18 JANUARY 2023 GBP 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 remarkably close attention to this figure in its role of maintaining price stability.

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.

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

Retail Sales (MoM) (Dec), U.S.

WHEN: WHAT IT HAD INFLUENCED:

18 JANUARY 2023 USD and its subsequent pairs

WHAT HAPPENED: Retail Sales gauges the change in the aggregate value of sales at the retail level across the country. It is an important indicator of consumer spending accounting for most of the overall economic activity.

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.

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

Core CPI (MoM) (Dec), CAD

WHEN: WHAT IT HAD INFLUENCED:

17 JANUARY 2023 CAD and its subsequent pairs

WHAT HAPPENED: The Core Consumer Price Index (CPI) measures the change in the prices of goods and services from the perspective of the consumer (excluding food and energy). The Central bank pays remarkably close attention to this figure in its role of maintaining price stability, as it excludes the volatile food and energy components.
CADUSD is trading in downward channel. Further downside can be seen in coming week.

Gold prices cool after strong rally, head for fifth week of gains

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED: Gold prices hovered at a nine-month high on Friday after a sharp rally in the prior session, and were headed for a fifth consecutive week of gains amid resurgent haven demand and growing uncertainty over the path of U.S. monetary policy.

Prices of the yellow metal surged nearly 1.5% in the prior session, rallying in tandem with a sharp drop in stock markets as weak corporate earnings and softer-than-expected economic data pushed up concerns over a looming economic slowdown.

Hawkish comments from the Federal Reserve also weighed on sentiment. Fed Vice Chair Lael Brainard said on Thursday that interest rates will need to remain high despite signs of easing inflation, given that price pressures are still trending close to 40-year highs. Her comments mirrored similar commitments from other Fed officials this week.

But markets remained uncertain over where U.S. interest rates would peak, given that Fed officials offered differing takes on the level, ranging from just below 5% to close to 6%.

Spot gold fell 0.1% to $1,930.90 an ounce, while gold futures steadied around $1,932.35 an ounce by 19:40 ET (00:40 GMT). Both instruments were trading close to their highest level since April 2022, and were set to add about 0.6% this week.

Gold prices have been on a tear since data showed a sustained downturn in U.S. inflation, which is likely to invite less hawkish moves by the Fed this year. The prospect of smaller rate hikes brings much relief to bullion prices, which were rattled by a hawkish Fed in 2022.

The prospect of a global recession also boosted haven demand for gold in recent weeks, amid multiple warnings that major economies could see a contraction this year.

The red metal has rallied sharply in recent weeks on growing bets of an economic recovery in China, after the world’s largest copper importer began scaling back most anti-COVID measures in December.

Still, recent gains in the red metal were held back by growing fears of a recession this year.

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

Oil prices rise as China optimism grows ahead of Lunar New Year

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED: Oil prices rose further on Friday, and were set to end the week higher as optimism over an eventual recovery in Chinese demand this year largely offset fears that a global economic slowdown will dent crude markets.

Markets are betting on a strong boost to the Chinese economy from the week-long Lunar New Year holiday, particularly after the country relaxed almost all anti-COVID restrictions earlier this month.

China kept its key lending rates at historic lows for a fifth consecutive month on Friday, indicating that the government plans to keep liquidity conditions loose to spur an economic recovery.

Brent oil futures rose 0.3% to $86.53 a barrel, while West Texas Intermediate crude futures rose 0.6% to $81.08 a barrel by 21:23 ET (02:23 GMT). Both contracts were up for a second consecutive session, and were set to gain up to 1.7% this week.

Crude markets largely looked past data showing a bigger-than-expected build in U.S. inventories over the past week. But despite the large inventory build, an unexpected drop in distillates stockpiles indicated that freight and transport demand remained strong in the world’s largest economy.

U.S. supplies are also set to tighten as the Biden administration stopped drawing crude from the Strategic Petroleum Reserve. The government has also flagged that it will begin refiling the reserve from February, which could act as a buy signal for markets.

Markets were also uncertain over the path of U.S. monetary policy, following comments from several Federal Reserve members this week. While most Fed members have called for a smaller pace of interest rate hikes in the coming months, they offered differing takes on when U.S. interest rates would peak.

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

BTC Surges 7.68% As the Crypto Market Cap Surpasses $1 Trillion

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED: The global crypto market cap has surpassed $1 trillion.

Sentiment tweeted that BTC’s price broke above $22,7k.

BTC’s price currently rests on the support level at $22,496.55.

The global crypto market cap has surpassed the $1 trillion mark over the last 24 hours according to Coin Market Cap. At press time, the crypto market cap stands at $1.04 trillion, which is a 6.40% increase over the last 24 hours. Bitcoin (BTC), the crypto market leader, printed a 24-hour gain of 7.68% and is currently trading at $22,594.28.

Sentiment tweeted today that BTC’s price was able to break above $22,700 for the first time since August 18, 2022 in the last 24 hours. The blockchain analytics firm attributed the rise in BTC’s price to the large tier group of addresses holding 1,000 to 10,000 BTC which have collectively accumulated 64,638 BTC in the past 15 days. At current prices, this is worth ($1.46 billion).

BTC is currently trading at $22747.80 and ETH at $ 1635.80 BTC is up by 0.33% and ETH down by 1.21% in the last 24 hours.

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

5 KEY EVENTS TO WATCH OUT

Service PMI (Jan), U.K.

WHEN: WHAT IT INFLUENCES:

24 JANUARY 2023 GBP and its subsequent pairs

WHAT’S HAPPENING: The Services Purchasing Managers’ Index (PMI) is a diffusion index incorporating survey results provided by firms in the services sector throughout the country. A reading above fifty suggests the service sector is expanding, while a reading below fifty suggests the service sector is in contraction. Policymakers and traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, rather than waiting for the hard data to emerge. The service sector is far larger than manufacturing sector and thus accounts for the largest share of the country’s economic output.

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.

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

WHEN: WHAT IT INFLUENCES:

26 JANUARY 2023 USD and its subsequent pairs

WHAT’S HAPPENING: Gross Domestic Product (GDP) measures the annualised change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

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.

CPI (QoQ) (Q4), AUD

WHEN: WHAT IT INFLUENCES:

25 JANUARY 2023 AUD 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 remarkably close attention to this figure in its role of maintaining price stability.

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.

BoC Interest Rate Decision, CAD

WHEN: WHAT IT INFLUENCES:

25 JANUARY 2023 CAD and its subsequent pairs

WHAT’S HAPPENING: The Bank of Canada (BOC) publishes its decision on where to set the benchmark interest rate. As short-term interest rates are an important determinant of currency valuation, traders watch interest rate changes closely.

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

CPI (QoQ) (Q4), NZD

WHEN: WHAT IT INFLUENCES:

25 JANUARY 2023 NZD 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 remarkably close attention to this figure in its role of maintaining price stability.

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

MICROSOFT CORP. (MSFT) to announce its Quarterly Results on 24 JANUARY 2023, EPS estimated to 2.30 per share while revenue estimated 53.127B
VISA Inc. (V) to announce its Quarterly Results on 26 JANUARY 2023, EPS estimated to 2.01 per share while revenue estimated 7.701B
TESLA, Inc. (TSLA) to announce its Quarterly Results on 25 JANUARY 2023, EPS estimated to 1.15 per share while revenue estimated 24.636B.
MASTERCARD INCORPORATED (MA) to announce its Quarterly Results on 26 JANUARY 2023, EPS estimated to 2.57 per share while revenue estimated 5.793B
DANAHER CORPORATION (DHR) to announce its Quarterly Results on 24 JANUARY 2023, EPS is estimated to be 2.51 per share while revenue is estimated at 7.873B.