Weekly Global Markets Technical Analysis Report – 23 May 2021

Global Markets Technical Analysis

Weekly Global Markets Technical Analysis Report – 23 May 2021

China Industrial Production YoY

 WHEN:                                                                WHAT IT INFLUENCES:

16th  May 2021                                                CNY and its subsequent 

                                                                             pairs

WHAT’S HAPPENING:

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

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

Japan Gross Domestic Product (GDP) QoQ

WHEN:                                                                 WHAT IT INFLUENCES:

17th  MAY 2021                                                  JPY and its subsequent 

                                                                             pairs

WHAT’S HAPPENING: 

Gross Domestic Product (GDP) measures the 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 higher than expected reading should be taken as positive/bullish for the JPY, while a lower than expected reading should be taken as negative/bearish for the JPY.

U.S. Federal Open Market Committee (FOMC) Meeting Minutes

WHEN:                                                               WHAT IT INFLUENCES:

19th May 2021                                                  USD  and its subsequent 

                                                                             pairs

WHAT’S HAPPENING: 

The Federal Open Market Committee (FOMC) Meeting Minutes are a detailed record of the committee’s policy-setting meeting held about two weeks earlier. The minutes offer detailed insights regarding the FOMC’s stance on monetary policy, so currency traders carefully examine them for clues regarding the outcome of future interest rate decisions.

Gold Rises 3rd Week in Row but Stopped by $1,890 Ceiling

WHAT IT HAD INFLUENCED:

GOLD 

WHAT HAPPENED

Gold prices dipped on Friday even as they clinched a third straight weekly gain. But longs hoping to break above $1,900 were stopped $10 short of the target, proving sentiment for the yellow metal wasn’t as hot yet as they thou

Gold for June Delivery settled on New York’s Comex settled at $1,876.70 an ounce, down $5.20, or 0.3%, on the day. For the week, the benchmark gold futures contract rose 2%, extending last week’s 0.7% gain and the 3.3% advance the week prior.

More importantly though, Friday’s peak was $1,890.15 — the second time this week that June gold had missed the $1,900 target by just about $10. The first occasion was on Wednesday when it got to as high as $1,891.25.

The spot price  of gold, reflective of real-time trades in bullion, was at $1,877.45 after an intraday high at $1,889.40.

Traders and fund managers sometimes decide on the direction for gold by looking at the spot price — which reflects bullion for prompt delivery — instead of futures.

A break above $1,900, particularly $1,920, will bring gold above the lows of the year, returning it to positive territory for 2021. It could also set the path for a recapture of the high $1,900s pivotal for those hoping to see a return to August record highs of above $2,000.

This week was significant for gold with more than a handful of analysts predicting a crack of the $1,900 ceiling as the Federal Reserve appears determined to stay with its ultra-low interest rates and accommodative monetary policy.

This is despite a raging debate on Wall Street that the central bank might be forced to tighten monetary policy quicker than it expects as inflation builds from soaring commodity prices.

“Gold bulls are pausing for breath after a six-session winning run,” said Sophie Griffiths, who heads U.K. and EMEA market research for online trading platform OANDA.

“The bottom line is that any rise in US interest rates is still a long way off. The low-interest-rate environment is set to stay for some time yet, which is supportive of non-yielding gold.”

The Federal Reserve acknowledges the price pressures arising from bottlenecks in U.S. supply chains struggling to cope with demand in an economy reopening after months of pandemic-suppression.

But the central bank insists that these inflationary pressures are “transitory” and will fade as the economy makes a full recovery from the pandemic. It also says it does not see the need for now to raise interest rates.

Such an environment heightens gold’s natural role as an inflation hedge, say longs who are emboldened to attempt first a return to $1,900 levels last seen in January, before a further push to record highs of around $2,100 set in August.

Oil Down 3% for Week as Fears of an Iran Deal Offset Gain for Day 

WHAT IT HAD INFLUENCED:

BRENT & WTI CRUDE OIL

WHAT HAPPENED:  

Oil prices rose on Friday but still ended the week about 3% down on fears that Iran was nearing a nuclear deal that could remove U.S. sanctions, possibly adding two million barrels per day of crude to the market. 

Speculation of a storm forming in the Gulf of Mexico, where the bulk of U.S. energy installations are located, helped oil prices to rebound from Thursday’s losses triggered by worries over the Iranian situation.

But the gain wasn’t enough to offset the slide for the week.

“Much of the energy market has priced in more Iranian crude output later this summer,” said Ed Moya, head of research for the Americas at online trading platform OANDA.

WTI and Brent rose on the day as a weather system forming over the western Gulf of Mexico showed a 40% chance of becoming a cyclone in the next 48 hours, according to data from the U.S. National Hurricane Center.

“This early storm prompted traders to buy crude ahead of the weekend in anticipation of potential production shut-ins,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

But the concerns over Iranian crude ramp-up were greater.

World powers negotiating to bring Tehran back into a nuclear accord canceled by former U.S. President Donald Trump have accepted that major sanctions imposed since 2018 on the Islamic Republic’s crude exports be lifted, President Hassan Rouhani told Iranian television on Thursday.

“Finer points” were being worked to finalize a deal, Rouhani said, even as European diplomats insisted that success was not guaranteed and that tough issues remained in the talks.

At stake is an additional supply of some 500,000 to 2 million barrels of crude that could enter the market anytime between the next three to 18 months, those in the know say.

Iran has said previously that it could return “within months” to its peak oil production of nearly 4 million barrels a day once the sanctions on its oil are lifted. Sources familiar with the country’s crude output currently estimated its production at around 2 million barrels daily. 

Analysts say the additional supply from Iran, whenever that comes, will force a reconfiguration of global oil supply that could be more bearish than bullish — especially with questions about demand resurfacing after new coronavirus flare-ups in No. 3 oil consumer India.

5 KEY EVENTS TO WATCH OUT

Germany Gross Domestic Product (GDP) QoQ 

 WHEN:                                                                WHAT IT INFLUENCES:

25th May 2021                                         EUR and its subsequent pairs                                                                   

WHAT’S HAPPENING: 

Gross Domestic Product (GDP) is the broadest measure of economic activity and is a key indicator of economic health. The quarterly percent changes in GDP show the growth rate of the economy as a whole.

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

New Zealand Interest Rate Decision

     WHEN:                                                               WHAT IT INFLUENCES:

25th May 2021                                       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. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

A higher than expected rate is positive/bullish for the NZD, while a lower than expected rate is negative/bearish for the NZD.

U.S. Crude Oil Inventories

WHEN:                                                               WHAT IT INFLUENCES:

26th May  2021                                                  USD  and its subsequent 

                                                                             pairs

WHAT’S HAPPENING: 

The Energy Information Administration’s (EIA) Crude Oil Inventories measures the weekly change in the number of barrels of commercial crude oil held by US firms. The level of inventories influences the price of petroleum products, which can have an impact on inflation.

If the increase in crude inventories is more than expected, it implies weaker demand and is bearish for crude prices. The same can be said if a decline in inventories is less than expected.

If the increase in crude is less than expected, it implies greater demand and is bullish for crude prices. The same can be said if a decline in inventories is more than expected

U.S. Gross Domestic Product (GDP) QoQ

WHEN:                                                                WHAT IT INFLUENCES:

27th May 2021                                                  USD and its subsequent 

                                                                             Pairs 

WHAT’S HAPPENING: 

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.

Usual Effect: Actual > Forecast = Good for currency

Frequency: Released monthly. There are 3 versions of GDP released a month apart – Advance, second release and Final. Both the advance the second release are tagged as preliminary in the economic calendar.

U.S. Pending Home Sales MoM

WHEN:                                                                 WHAT IT INFLUENCES:

27th May 2021                                                    USD  and its subsequent 

                                                                             pairs

WHAT’S HAPPENING: 

The National Association of Realtors (NAR) Pending Home Sales Report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction.

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

EQUITIES IN THE COMING WEEK

1. Intuit(INTU) to announce its Quarterly Results on 25th May 2021, EPS estimated to 6.56 per share while revenue estimated 4.46B 

2. Aveva(AVV) to announce its Quarterly Results on 25th  May 2021, EPS estimated to 59.92 per share while revenue estimated 486.59B.

3.Nvidia (NVDA)  to announce its Quarterly Results on 26th May 2021, EPS estimated to 3.38 per share while revenue estimated 5.39B

4. SSE(SSE) to announce its Quarterly Results on 26th May 2021, EPS estimated to 74.84  per share while revenue estimated 4,221 M.

5. HP (HPQ) to announce its Quarterly Results on 27th May 2021, EPS estimated to  per 0.882 share while revenue estimated 14.69B.

     TOP CURRENCIES IN THE UPCOMING  WEEK

EUR/USD 

Technical Analysis

EUR/USD is trading in a upward channel, the Up side can be seen in the coming days.

 GBP/USD

Technical Analysis

GBP/USD is trading in a Upward channel, the  Upside can be seen in the coming days

USD/JPY

Technical Analysis

USD/JPY is trading in an Upward channel, the Upside can be seen in the coming days.

TOP INDEX TO WATCH OUT

S&P 500

Technical Analysis

S&P 500 is trading in a Upward channel, the Up side can be seen in the coming days.

CAC 40 

Technical Analysis

CAC 40 is trading in a upward channel, the Up side can be seen in the coming days.

DAX 30

Technical Analysis

DAX 30 is trading in a upward channel, the Up side can be seen in the coming days.

TOP COMMODITIES TO WATCH OUT

SILVER

Technical Analysis

Silver is trading in a upward channel, the Up side can be seen in the coming days.

Brent Crude

Technical Analysis

Brent Crude is trading in a upward channel, the Up side can be seen in the coming days.

TOP CRYPTO -CURRENCIES TO WATCH OUT

Bitcoin

Technical Analysis

Bitcoin is trading in a Downward channel, the Down side can be seen in the coming days.

RIPPLE

Technical Analysis

Ripple is trading in an Downward channel, the down side can be seen in the coming days.

 DATA WATCH

Technical Analysis

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