Weekly Technical Analysis & Weekly Market Strategy – 11 September 2022
11 Sep 2022
WEEKLY SNAPSHOT
Composite PMI (Aug), U.K.
WHEN: WHAT IT HAD INFLUENCED:
05th SEPTEMBER 2022 GBP and its subsequent pairs
WHAT HAPPENED: The Composite PMI Index measures the activity level of purchasing managers in the both sectors. A reading above 50 indicates expansion in the sector; a reading below 50 indicates contraction.
GBPNZD is currently in the downward channel. Further downside can be seen in the coming week.
Services PMI (Aug), U.S.
WHEN: WHAT IT HAD INFLUENCED:
06th SEPTEMBER 2022 USD and its subsequent pairs
WHAT HAPPENED: 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.
USDZAR is currently in the upward channel. Further upside can be seen in the coming week.
GDP (QoQ) (Q3), GERMANY
WHEN: WHAT IT HAD INFLUENCED:
07th SEPTEMBER 2022 EUR and its subsequent pairs
WHAT HAPPENED: 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.
EURNOK is currently in the upward channel. Further upside can be seen in the coming week.
Gold Notches First Weekly Gain to Stop 3 Weeks of Bleeding
WHAT IT HAD INFLUENCED:
GOLD
WHAT HAPPENED:
Gold had its first weekly gain in four as the dollar retreated further on Friday from its biggest rally in two decades, allowing bullion to somewhat reinforce its standing as a safe haven.
The benchmark gold futures contract on New York’s Comex, December, settled up $8.40, or 0.8%, at $1,728.60 per ounce. For the week, it gained 0.3% after a cumulative 5.2% loss over three previous weeks.
The Dollar Index, which pits itself against six major currencies led by the euro, slid for a third day in a row, reaching a low of 108.35 from Wednesday’s 20-year high of 110.79. The greenback slid even as Federal Reserve officials pushed on Friday for another outsized rate hike to keep inflation down, when the central bank meets on Sept. 21.
“Gold is higher as the historic run higher in the dollar appears to have run out of steam,” said Ed Moya, analyst at online trading platform OANDA. “It seems Wall Street is getting comfortable with the idea of another 75-basis point rate hike by the Fed.”
The United States should have another “significant” rate hike this month to curb inflation, Fed Governor Chris Waller said Friday, with one of his most hawkish colleagues, James Bullard, suggesting a third straight 75-basis point increase.
GOLD is trading in the down channel; an downside will be seen in the coming days.
Oil Soars 3% as Market Shorts Try to Avoid Being “Naked” Before Weekend
WHAT IT HAD INFLUENCED:
CRUDE OIL
WHAT HAPPENED:
Bottom-fishing and market shorts not wanting to be “naked” before the weekend sent crude prices soaring on Friday, extending the recovery in oil which hit seven-month lows earlier this week on an array of demand issues.
In a relative calm to the perfect storm that hit oil bulls between Tuesday and Wednesday, U.S. crude settled well above $85 per barrel while U.K. Brent oil stayed over $90.
The about 3% gain came amid a CNN report from late Thursday that the Biden administration might stop dumping barrels from the U.S. Strategic Petroleum Reserve, or SPR, on the market after October, in a bid to keep down energy prices that have fed runaway inflation.
Aiding oil’s recovery was the dollar’s retreat from its biggest rally in two decades. The Dollar Index, which pits itself against six major currencies led by the euro, slid for a third day in a row, reaching a low of 108.35 from Wednesday’s 20-year high of 110.79. The greenback slid even as Federal Reserve officials pushed on Friday for another outsized rate hike to keep inflation down, when the central bank meets on Sept. 21.
Those long oil also leveraged on old but positive news from earlier in the week that Russian President Vladimir Putin might shut down all energy exports from his country should there be more clampdowns by the West on the selling price of Russian oil and gas.
WTI CRUDE OIL is trading in the down channel; an downside will be seen in the coming days.
Bitcoin (BTC) Surges Over 8% As Central Banks Hike Rates
WHAT IT HAD INFLUENCED:
BITCOIN
WHAT HAPPENED:
Bitcoin (BTC) rose in value by 8.53% to $20,811over the last 24 hours, the most seen in over a month, as the markets reacted positively to a record rate hike by the European Central Bank (ECB), and the vows of a rate hike by Federal Reserve Bank (Fed) Chairperson Jerome Powell, hitting a peak so far on Friday, 9th September 2022.
On Thursday, 8th September 2022, the ECB announced a 75 basis point interest rate rise, taking its benchmark deposit rate to 0.75%. Following the news, BTC managed to push past the $20,000 resistance level to trade at $20,728 at the time of writing. Following suit, the price of Ethereum (ETH) also rose, hitting $1,696.6, and is being predicted to further rise to $1,700.
One of the reasons for the fluctuations in BTC’s value is the uncertainty around how far central banks are willing to go in terms of raising interest rates in the face of a worsening global economy.
CNBC reports that the ECB has also revised its inflation expectations, placing them at an average of 8.1% in 2022 and stating that it expects to hike rates further as “inflation remains far too high and is likely to stay above target for an extended period.”
BTCUSD is trading in the down channel; an downside will be seen in the coming days.
5 KEY EVENTS TO WATCH OUT
GDP (MoM), U.K.
WHEN: WHAT IT INFLUENCES:
12th SEPTEMBER 2022 GBP 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.
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.
PPI (MoM) (Aug), U.S.
WHEN: WHAT IT INFLUENCES:
14th SEPTEMBER 2022 USD and its subsequent pairs
WHAT’S HAPPENING: The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, which accounts for the majority of overall inflation.
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.
Employment Change (Aug), AUSTRALIA
WHEN: WHAT IT INFLUENCES:
14th SEPTEMBER 2022 AUD and its subsequent pairs
WHAT’S HAPPENING: Employment Change measures the change in the number of people employed. Job creation is an important indicator of consumer spending.
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.
Interest Rate Decision (Sep), RUSSIA
WHEN: WHAT IT INFLUENCES:
16th SEPTEMBER 2022 RUB and its subsequent pairs
WHAT’S HAPPENING: The Bank Rossii decision on short term interest rate. The decision on where to set interest rates depends mostly on growth outlook and inflation. The primary objective of the central bank is to achieve price stability.
A higher-than-expected reading ought to be taken as positive/bullish for the RUB, whereas a lower-than-expected reading should be taken as negative/bearish for the RUB.
ZEW Economic Sentiment (Sep), GERMANY
WHEN: WHAT IT INFLUENCES:
13th SEPTEMBER 2022 EUR and its subsequent pairs
WHAT’S HAPPENING: The German Zentrum für Europäische Wirtschaftsforschung (ZEW) Economic Sentiment Index gauges the six-month economic outlook. A level above zero indicates optimism; below indicates pessimism.
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
- Oracle (ORCL) to announce its Quarterly Results on 12th SEPTEMBER 2022, EPS estimated to 1.08 per share while revenue estimated 11.35B.
- Radiant (RLGT) to announce its Quarterly Results on 13th SEPTEMBER 2022, EPS estimated to 0.2275 per share while revenue estimated 375.17M.
- BRP Inc (DOOO) to announce its Quarterly Results on 14th SEPTEMBER 2022, EPS estimated to 2.04 per share while revenue estimated 1.79B.
- Adobe (ADBE) to announce its Quarterly Results on 15th SEPTEMBER 2022, EPS estimated to 3.34 per share while revenue estimated 4.44B.
- MYT Netherlands (MYTE) to announce its Quarterly Results on 15th SEPTEMBER 2022, EPS estimated to 0.0788 per share while revenue estimated 182.95M.
TOP COMMODITIES IN THE COMING WEEK
- GOLD
GOLD is trading in the down channel; an downside will be seen in the coming days.
- SILVER
SILVER was trading in the down channel. There will be a upside in the coming week after the breakout upside.
- WTI CRUDE OIL
WTI CRUDE OIL is trading in the down channel; an downside will be seen in the coming days.
TOP CRYPTO IN THE COMING WEEK
- BTCUSD
BTCUSD is trading in the down channel; an downside will be seen in the coming days.
- ETHEREUM
ETHEREUM is trading in the up channel; an upside will be seen in the coming days.
TOP CURRENCY IN THE COMING WEEK
- EURUSD
EURUSD is trading in the down channel; an downside will be seen in the coming days.
- GBPUSD
GBPUSD is trading in the down channel; an downside will be seen in the coming days.
- EURGBP
EURGBP was trading in the up channel. There will be a upside in the coming week after the breakout upside.
TOP INDEX IN THE COMING WEEK
- EURO STOXX 50
EURO STOXX 50 was trading in the down channel. There will be a upside in the coming week after the breakout upside.
- NIKKEI 225
HANG SENG was trading in the down channel. There will be a upside in the coming week after the breakout upside.
DATA WATCH
