WEEKLY TECHNICAL ANALYSIS & WEEKLY MARKET STRATEGY – 02 October 2022

02 Oct 2022

WEEKLY SNAPSHOT

GDP (YoY), U.K.

WHEN: WHAT IT HAD INFLUENCED:

30^th SEPTEMBER 2022 GBP 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.

GBPCAD was trading in the downward channel. The upside can be seen in the coming week after the breakout upside.

Pending Home Sales (MoM) (Aug), U.S.

WHEN: WHAT IT HAD INFLUENCED:

28^th SEPTEMBER 2022 USD and its subsequent pairs

WHAT HAPPENED: 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.

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

CPI (YoY) (Sep), EURO ZONE

WHEN: WHAT IT HAD INFLUENCED:

30^th SEPTEMBER 2022 EUR 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.

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

Gold Hits Week High, Despite Crash and Burn for September and Q3

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED:

Gold prices perked up for a fourth day in a row, hitting a one-week high after a largely miserable September for longs in the game.

For the month though, bullion was down 3%, while for the quarter, it tumbled 7.5% for its worst quarter since March 2021.

Gold’s benchmark futures contract on New York’s Comex, December, settled Friday’s trade up $3.40, or 0.2%, at $1,672 per ounce.

The spot price of bullion, which is more closely followed than futures by some traders, was up just $1.25, or 0.1%, at $1,661.86 by 15:12 ET (19:12 GMT).

Gold’s four-day rebound reached a climax Friday when the spot price hit a one-week high of $1,675.35 after data showing another surprisingly higher U.S. inflation print for August that reinforced expectations for more super-sized Federal Reserve rate hikes. Gold is often seen as a store of value and a hedge against inflation and Fed rate increases.

Risk assets came under pressure on Friday after latest data showed the Fed’s preferred inflation indicator, the Personal Consumption Expenditures Index, grew 6.2% during the year to August, versus 6.3% in the 12 months to July.

Economists polled by U.S. media had expected the so-called PCE Index to expand by just 6% during the year to August.

On a monthly basis, the PCE Index actually grew more in August than in July, rising 0.3% from a previous decline of 0.1%. Economists had expected a monthly growth of just 0.2% in August.

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

Oil falls but notches weekly gain as OPEC+ considers output cut

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED:

Oil prices dipped on Friday in choppy trading but notched their first weekly gain in five on Friday, underpinned by the possibility that OPEC+ will agree to cut crude output when it meets on Oct. 5.

Brent crude futures for November, which expire on Friday, fell 53 cents, or 0.6%, to $87.96 a barrel. The more active December contract was down $2.07 at $85.11.

U.S. West Texas Intermediate (WTI) crude futures fell $1.74, or 2.1%, to $79.49.

Both contracts rose by more than $1 during the session but dropped on news that OPEC’s oil output rose in September to its highest since 2020, surpassing a pledged hike for the month, according to a Reuters survey on Friday.

Brent and WTI gained 2% and 1% on a weekly basis, marking the first weekly rise since August and following nine-month lows hit this week.

Money managers cut their net long U.S. crude futures and options positions in the week to September 27, the U.S. Commodity Futures Trading Commission (CFTC) said.

While the dollar has dropped from 20-year highs earlier in the week, it gained through the day. A stronger greenback makes dollar-denominated oil more expensive for buyers holding other currencies, reducing demand for the commodity.

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

Bitcoin Mining’s Climate Damage Is as Bad for Earth as Beef, Fossil Fuel.

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED:

Bitcoin’s negative environmental effects are equivalent to those of well-known polluters like beef farming and burning crude oil for fuel, according to new a new study published in the journal Nature.

The study finds that bitcoin mining and the mining of other cryptocurrencies use huge amounts of energy—in fact, more than that used by any small country. For example, “in 2020, BTC mining used 75.4 TWh yr−1 of electricity, which is more energy than used by Austria (69.9 TWh yr−1 in 2020) or Portugal (48.4 TWh yr−1 in 2020). There is a general upward time trend in BTC electricity use and a close correlation between BTC prices and mining energy usage.”

The study evaluated the annual emissions from mining between 2016 and 2021 as well as the energy intensity of bitcoin mining. The researchers determined the potential costs associated with the climate and adverse hazards that those emissions would cause using those estimates.

According to the study, the market value of Bitcoin caused an average global climate loss of 35 cents for every $1. As a percentage of market value, the anticipated costs associated with mining bitcoins were significantly higher than those associated with mining gold.

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

5 KEY EVENTS TO WATCH OUT

Manufacturing PMI (Sep), U.K.

WHEN: WHAT IT INFLUENCES:

03^rd OCTOBER 2022 GBP and its subsequent pairs

WHAT’S HAPPENING: The Manufacturing Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below 50 indicates contraction.

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.

ADP Nonfarm Employment Change (Sep), U.S.

WHEN: WHAT IT INFLUENCES:

05^thOCTOBER 2022 USD and its subsequent pairs

WHAT’S HAPPENING: The ADP National Employment Report is a measure of the monthly change in non-farm, private employment, based on the payroll data of approximately 400,000 U.S. business clients.

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.

Ivey PMI (Sep), CANADA

WHEN: WHAT IT INFLUENCES:

06^th OCTOBER 2022 CAD and its subsequent pairs

WHAT’S HAPPENING: The Ivey Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in Canada. A reading above 50 indicates expansion; a reading below 50 indicates contraction.

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.

Retail Sales (MoM), AUSTRALIA

WHEN: WHAT IT INFLUENCES:

04^th OCTOBER 2022 AUD and its subsequent pairs

WHAT’S HAPPENING: Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.

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.

Tankan Large Manufacturers Index (Q3), JAPAN

WHEN: WHAT IT INFLUENCES:

02^nd OCTOBER 2022 JPY and its subsequent pairs

WHAT’S HAPPENING: The Tankan Large Manufacturing Index rates the relative level of general business conditions in the manufacturing sector. On the index, a level above zero indicates improving conditions; below indicates worsening conditions.

A higher-than-expected reading ought to be taken as positive/bullish for the JPY, whereas a lower-than-expected reading should be taken as negative/bearish for the JPY.

EQUITIES IN THE COMING WEEK

Acuity Brands (AYI) to announce its Quarterly Results on 04^th OCTOBER 2022, EPS estimated to 3.63 per share while revenue estimated 1.08B.
RPM (RPM) to announce its Quarterly Results on 05^thOCTOBER 2022, EPS estimated to 1.34 per share while revenue estimated 1.89B.
Levi Strauss A (LEVI) to announce its Quarterly Results on 06^thOCTOBER 2022, EPS estimated to 0.3704 per share while revenue estimated 1.59B.
Thera Technologies (THTX) to announce its Quarterly Results on 06^thOCTOBER 2022, EPS estimated to -0.125 per share while revenue estimated 21.62M.
Accolade (ACCD) to announce its Quarterly Results on 07^th OCTOBER 2022, EPS estimated to -0.7236 per share while revenue estimated 82.86M.