WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY – 23 October 2022

23 Oct 2022

WEEKLY SNAPSHOT

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

WHEN: WHAT IT HAD INFLUENCED:

19^th OCTOBER 2022 GBP and its subsequent pairs

WHAT HAPPENED: 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.

GBPNZD is trading in an downward channel. Further downside can be seen in the coming week.

Initial Jobless Claims, U.S.

WHEN: WHAT IT HAD INFLUENCED:

20^th OCTOBER 2022 USD and its subsequent pairs

WHAT HAPPENED: 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.

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

Core Retail Sales (MoM) (Aug), CANADA

WHEN: WHAT IT HAD INFLUENCED:

21^st OCTOBER 2022 CAD 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.

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

Gold Still Lacking Footing, But Steadies for Slight Weekly Gain

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED:

Gold longs haven’t been able to crawl out of the mid-$1,600 hole they fell into a month ago.

But after a wretched week last week that proved to be its worst in two months, the yellow metal managed a positive showing this week, although its gain itself was tiny.

Gold’s benchmark futures contract on New York’s Comex, December, settled Friday’s trade at $1,656.30 an ounce, up $19.50, or 1.2%, on the day. For the week, it gained $7.40, or 0.5%.

Last week, December gold lost just over $60, or 3.5%.

The spot price of bullion, which is more closely followed than futures by some traders, was at $1,654.24 by 15:00 ET (19:00 GMT).

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

Crude Oil Higher; Set to Post Positive Week

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED:

Oil prices edged higher Friday in volatile trading, as traders weighed up slowing economic growth on the back of higher interest rates as well as cuts to supply from a group of top producers.

By 09:10 ET (13:10 GMT), U.S. crude futures traded 1% higher at $85.39 a barrel, while the Brent contract rose 1% to $93.32.

Brent is on track for a weekly gain of just under 2%, while U.S. crude is set to close the week 0.8% higher. Both benchmarks dropped in the previous week.

Oil has retreated from the highs of the first quarter on fears the aggressive monetary tightening undertaken by central banks across the globe to combat soaring inflation will lead to a widespread recession.

Tesla Chief Executive Elon Musk said on Friday he thinks a recession will last until spring of 2024 after raising concerns on demand in China and Europe.

The European Central Bank is expected to increase interest rates, probably by 75 basis points, next week, while Federal Reserve Bank of Philadelphia President Patrick Harker said on Thursday that the U.S. central bank has to keep on lifting its interest rates as inflation is still too high.

However, there has been some good news for oil bulls to latch on to this week.

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

Bored Bitcoin investors await ‘halving’ for rally

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED:

Trading has gotten so tedious in the cryptocurrency world that advocates are resorting to touting as scheduled reduction in the number of Bitcoins awarded to miners that is set to take place in about 18 months as a potential catalyst.

Bitcoin, the largest cryptocurrency, fell 1% to about $19,000 early on Thursday. It has been locked in a narrow range of around $20,000 since prices collapsed in June. Even so, analysts from ByteTree Research say “it is time to sit up and pay attention”, as the next halving is expected to happen in 2024.

Bitcoin undergoes what’s known as halving, or havening, every 3-4 years or so. During a halving, coin rewards to miners — whose computers order transactions on the network and get paid with new Bitcoins — get cut in half. Prior halving’s have coincided with bull runs, which often started a few months before a halving and continued for some months afterwards. The last halving, in May of2020, was followed by a bull run that ended in a record Bitcoin price of almost $69,000 in November 2021. Since reaching that milestone, Bitcoin has tumbled about 70%.

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

5 KEY EVENTS TO WATCH OUT

CBI Distributive Trades Survey (Oct), U.K.

WHEN: WHAT IT INFLUENCES:

25^th OCTOBER 2022 GBP and its subsequent pairs

WHAT’S HAPPENING: The Confederation of British Industry (CBI) Industrial Trends Orders measures the economic expectations of the manufacturing executives in the U.K. It is a leading indicator of business conditions.

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.

Services PMI (Oct), U.S.

WHEN: WHAT IT INFLUENCES:

23^rdOCTOBER 2022 USD and its subsequent pairs

WHAT’S HAPPENING: The Service PMI release is published monthly by Markit Economics. The data are based on surveys of over 400 executives in private sector service companies

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.

BoC Interest Rate Decision, CANADA

WHEN: WHAT IT INFLUENCES:

26^th OCTOBER 2022 CAD and its subsequent pairs

WHAT’S HAPPENING: Bank of Canada (BOC) governing council members come to a consensus on where to set the rate. Traders watch interest rate changes closely as short-term interest rates are the primary factor in currency valuation.

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.

CPI (QoQ) (Q3), AUSTRALIA

WHEN: WHAT IT INFLUENCES:

25^th OCTOBER 2022 AUD 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 AUD, whereas a lower-than-expected reading should be taken as negative/bearish for the AUD.

ECB Interest Rate Decision (Oct), EURO ZONE

WHEN: WHAT IT INFLUENCES:

27^th OCTOBER 2022 EUR and its subsequent pairs

WHAT’S HAPPENING: The six members of the European Central Bank (ECB) Executive Board and the 16 governors of the euro area central banks vote on where to set the rate.

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.

EQUITIES IN THE COMING WEEK

Alphabet C (GOOG) to announce its Quarterly Results on 25^th OCTOBER 2022, EPS estimated to 1.28 per share while revenue estimated 71.34B.
Microsoft (MSFT) to announce its Quarterly Results on 26^thOCTOBER 2022, EPS estimated to 2.32 per share while revenue estimated 49.86B.
Boeing (BA) to announce its Quarterly Results on 26^thOCTOBER 2022, EPS estimated to 0.1781 per share while revenue estimated 18.19B.
Apple (AAPL) to announce its Quarterly Results on 27^thOCTOBER 2022, EPS estimated to 1.26 per share while revenue estimated 88.76B.
Exxon Mobil (XOM) to announce its Quarterly Results on 28^th OCTOBER 2022, EPS estimated to 3.67 per share while revenue estimated 107.24B.