WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY

25 Dec

WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY – 25 December 2022

/ CSFX Analytics

WEEKLY SNAPSHOT

Wages in Euro Zone, U.K.

WHEN: WHAT IT HAD INFLUENCED:

19 DECEMBER 2022 GBP and its subsequent pairs

WHAT HAPPENED: Breakdown of total nominal hourly labor costs, whole economy: wages. % Change from the previous year, not seasonally adjusted. In addition to employees’ gross earnings, total labor costs include indirect costs such as employers’ social contributions and taxes connected to the employment. Gross earnings or wages are those paid directly and regularly by the employer at the time of each wage payment. They include the value of any social contributions, income taxes, etc.

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

GDP (QoQ) (Q3), U.S.

WHEN: WHAT IT HAD INFLUENCED:

22 December 2022 USD and its subsequent pairs

WHAT HAPPENED: Gross Domestic Product (GDP) measures the annualized 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.

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

Core CPI (MoM) (Nov), CAD

WHEN: WHAT IT HAD INFLUENCED:

21 December 2022 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 very close attention to this figure in its role of maintaining price stability, as it excludes the volatile food and energy components.

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

While investors wait for the GDP and inflation numbers, gold maintains its current rise

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED: Gold prices rose as fears of a 2023 recession spurred some safe haven plays into the yellow metal, with the focus now turning to key readings on U.S. economic growth and inflation due this week.

Bullion prices rallied this week against a weaker dollar, which was in part dented by a less dovish-than-expected stance from the Bank of Japan. The greenback was also dented by growing bets that U.S. inflation has peaked, which could invite a slower pace of rate hikes by the Federal Reserve.

Spot gold rose 0.2% to $1,818.58 an ounce, while gold futures rose 0.1% to $1,827.45 an ounce by 20:08 ET (01:08 GMT). The yellow metal was trading up 1.5% for the week and was close to a five-month high.

Markets are now awaiting revised U.S. GDP data for the third quarter. A preliminary reading showed that the economy grew a better-than-expected 2.9% in the September quarter, with analysts forecasting the figure to remain the same in its first revision due later in the day.

Focus this week is squarely on the U.S. Personal Consumption Expenditure price index, which is the Federal Reserve’s preferred inflation gauge. The core index is expected to have eased further in November from the prior month.

But the index still remains well above the Fed’s annual target range, indicating that the central bank still needs to tighten policy further to curb inflation.

The prospect of rising interest rates in developed markets is likely to keep gold prices subdued in the coming months, with the Bank of Japan, European Central Bank, and the Bank of England also sending hawkish messages.

Among industrial metals, copper prices surged on more signs of an economic reopening in China, even as the country grapples with a massive spike in COVID-19 cases.

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

Oil prices in the weekly win on tighter supply bets as Russia mulls output cuts

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED: U.S. crude oil prices settled higher Friday, as Moscow said it may cut oil production to offset price caps on Russian crude imposed by the G7 nations and the European Union.

On the New York Mercantile Exchange crude futures settled 2.7% higher at $79.56 a barrel, while on London’s Intercontinental Exchange, Brent added 3.6% to settle at $83.92 a barrel.

Russia may cut its oil output by 500,000-700,000 barrels a day in early 2023, Deputy Prime Minister Alexander Novak reportedly said in a media interview on Friday.

Novak said Moscow would lean toward cutting production rather than selling crude in line with the price cap.

The Group of Seven (G7) nations and the European Union agreed earlier this month to cap the price of Russian seaborne crude oil at $60 per barrel. The price cap aims to curb Russia’s income from oil sales – primarily to hinder its ability to fund its war against Ukraine – and keep a lid on global oil prices.

But many argue the price cap hasn’t dented Russia’s income from oil exports, which have found willing buyers from China, India, and Turkey.

Possible production cuts from Moscow stoked fears of a potential supply shortage as demand looks set to receive a boost from the China reopening.

Oil demand from China, the world’s top oil importer, could reach 15.7 million barrels per day in 2023, around 700,000 barrels higher than in 2022, S&P estimated in its most recent forecast.

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

FTX’s Bankman-Fried, charged with ‘epic’ fraud, released on $250 million bond

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED: Sam Bankman-Fried was released on a $250 million bond package on Thursday while he awaits trial over the collapse of the FTX crypto exchange, which a U.S. prosecutor called a “fraud of epic proportions.”

Federal prosecutors in Manhattan have accused the FTX founder of stealing billions of dollars in customer funds to plug losses at his hedge fund, Alameda Research.

Bankman-Fried was not asked to enter a plea on Thursday. He has previously acknowledged risk-management failures at FTX but has said he does not believe he has criminal liability. His defense lawyer, Mark Cohen, declined to comment after the hearing in Manhattan federal court.

U.S. Magistrate Judge Gabriel Gorenstein set Bankman-Fried’s next court date for Jan. 3, 2023, before U.S. District Judge Ronnie Abrams, who will handle the case.

Bankman-Fried founded FTX in 2019. A boom in the values of bitcoin and other digital assets propelled the exchange to a valuation of some $32 billion earlier this year, making the Massachusetts Institute of Technology (MIT) graduate a billionaire several times over, as well as an influential donor to U.S. political campaigns.

In granting him pretrial release, Gorenstein said Bankman-Fried had “achieved sufficient notoriety that it would be impossible” for him to engage in further financial schemes or to hide without being recognized.

After Thursday’s court appearance, the one-time billionaire was surrounded by photographers as he exited the lower Manhattan courthouse and entered a black SUV. He sported facial stubble and a grey suit – a far cry from the shorts and T-shirt he became notorious for wearing in public appearances while running FTX.

BTC is currently trading at $16827.30 and ETH at $ 1218.17. BTC is up by 0.30% and ETH is down by 0.15% in the last 24 hours.

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, U.K.

WHEN: WHAT IT INFLUENCES:

31 DECEMBER 2022 GBP and its 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 analyzing market sentiment and many speculative traders use the data to help them decide whether or not to take a long or short position.

Initial Jobless Claims, U.S.

WHEN: WHAT IT INFLUENCES:

29 DECEMBER 2022 USD and its subsequent pairs

WHAT’S HAPPENING: Initial Jobless Claims measure 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.

Retail Sales (YoY) (Nov), RUB

WHEN: WHAT IT INFLUENCES:

28 DECEMBER 2022 RUB 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. It is an important indicator of consumer spending accounting for a significant proportion of overall economic activity.
A reading that is stronger than forecast is generally supportive (bullish) for the RUB, while a weaker-than-forecast reading is generally negative (bearish) for the RUB.

Manufacturing PMI, CNY

WHEN: WHAT IT INFLUENCES:

31 DECEMBER 2022 CNY and its subsequent pairs

WHAT’S HAPPENING: China Manufacturing Purchasing Managers Index (PMI) provides an early indication each month of economic activities in the Chinese manufacturing sector. It is compiled by the China Federation of Logistics & Purchasing (CFLP) and the China Logistics Information Centre (CLIC), based on data collected by the National Bureau of Statistics (NBS). Li & Fung Research Centre is responsible for drafting and disseminating the English PMI report. Every month questionnaires are sent to over 700 manufacturing enterprises all over China. The data presented here is compiled from the enterprise’s responses about their purchasing activities and supply situations. The PMI should be compared to other economic data sources when used in decision-making.

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

Retail Sales (YoY) (Nov), JAPAN

WHEN: WHAT IT INFLUENCES:

27 DECEMBER 2022 JPY 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. It is an important indicator of consumer spending accounting for a significant proportion of overall economic activity.

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

EQUITIES IN THE COMING WEEK

CAL-MAINE FOODS Inc. (CALM) is to announce its Quarterly Results on 28 DECEMBER 2022, EPS is estimated to be 4.24 per share while revenue is estimated at 797.804M.
CODA OCTOPUS GROUP, Inc. (CODA) is to announce its Quarterly Results on 21 DECEMBER 2022, EPS is estimated to be 0.10 per share while revenue is estimated at 5.688M.
KAIVAL BRANDS INNOVATIONS GROUP, Inc. (AVL) is to announce its Quarterly Results on 28 DECEMBER 2022, EPS is estimated to be -0.05 per share while revenue is estimated at 5M.
MITIK SYSTEMS Inc. (MITK) is to announce its Quarterly Results on 26 DECEMBER 2022, EPS is estimated to be 0.20 per share while revenue is estimated at 38.57M
BLADE AIR MOBILITY Inc. (GIS) is to announce its Quarterly Results on 20 DECEMBER 2022, EPS is estimated to be –0.16 per share while revenue is estimated at 35.957M.