Weekly Technical Analysis & Weekly Market Strategy – 18 September 2022

18 Sep 2022

WEEKLY SNAPSHOT

GDP (MoM), U.K.

WHEN: WHAT IT HAD INFLUENCED:

12^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.

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

PPI (MoM) (Aug), U.S.

WHEN: WHAT IT HAD INFLUENCED:

14^th SEPTEMBER 2022 USD and its subsequent pairs

WHAT HAPPENED: 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.

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

Employment Change (Aug), AUSTRALIA

WHEN: WHAT IT HAD INFLUENCED:

14^th SEPTEMBER 2022 AUD and its subsequent pairs

WHAT HAPPENED: Employment Change measures the change in the number of people employed. Job creation is an important indicator of consumer spending.

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

Gold Near 2-½ Year Low on Overdone Panic Over Rates

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED:

In an ideal world, market moves sync perfectly with the news, data and other valuation matrix of an asset. In the real world, of course, there’s a greater chance for things to be overly exuberant or gloomy. Thursday’s selloff in gold was beyond gloom, bordering on utter, ridiculous panic.

On a day when neither the forex nor bond markets did enough to move the needle on gold, bears found it fit to hammer the yellow metal to mid-$1,600 lows seen before the pandemic rally of 2020 that eventually resulted in the all-time highs of above $2,100.

The benchmark gold futures contract on New York’s Comex, December, settled down $31.80, or 1.9%, at $1,677.30 per ounce. The session low was $1,669.05, marking a bottom since June 2020.

Worse was the spot price of bullion, which is more closely followed at times than futures. Spot gold was at $1,665.20, down $32.25, or 1.9%, on the day. The intraday low was $1,660.41. The last time spot gold was lower than that was in April 2020, before it began the turnaround that took it to record highs.

With the tumble over two previous days of trading, both the futures and spot markets were down 3% on the week.

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

Oil prices up after Basra spill, but log weekly decline

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED:

Oil prices rose slightly on Friday as a spill at Iraq’s Basra terminal appeared likely to constrain crude supply, but remained down on the week on fears that hefty interest rate increases will curb global economic growth and demand for fuel.

Brent crude futures settled at $91.35 a barrel, up 51 cents, while U.S. West Texas Intermediate (WTI) crude futures settled at $85.11 a barrel, up 1 cent.

Both benchmarks were down by nearly 2% on the week, hurt partly by the U.S. dollar’s strong run, which makes oil more expensive for buyers using other currencies. The dollar index was largely flat on the day but up for its fourth week in five weeks.

In the third quarter so far, both Brent and WTI are down about 20% for the biggest quarterly percentage declines since the start of the COVID-19 pandemic in 2020.

Oil exports from Iraq’s Basra oil terminal are being gradually resumed after they were halted last night due to a spillage, which has been contained, Basra Oil Company said.

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

Ethereum may now be more vulnerable to censorship

WHAT IT HAD INFLUENCED:

ETHEREUM

WHAT HAPPENED:

Ethereum’s upgrade to proof-of-stake (PoS) may make it more vulnerable to government intervention and censorship, according to the lead investigator of Merkle Science.

Speaking to Cointelegraph following the Ethereum Merge, Coby Moran, a former FBI analyst and the lead investigator for crypto compliance and forensic firm Merkle Science, expressed his thoughts on some of the risks posed by Ethereum’s transition to PoS.

While centralization issues have been broadly discussed leading up to the Merge, Moran suggested the prohibitive cost of becoming a validator could result in the consolidation of validator nodes to the bigger crypto firms like Binance, Coinbase and Kraken.

In order to become a full validator for the Ethereum network, one is required to stake 32 Ether (ETH), which is worth around $47,000 at the time of writing.

A pre-Merge report from blockchain analytics platform from Nansen earlier this month revealed that 64% of staked ETH is controlled by just five entities.

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

5 KEY EVENTS TO WATCH OUT

BoE Interest Rate Decision (Sep), U.K.

WHEN: WHAT IT INFLUENCES:

22^nd SEPTEMBER 2022 GBP and its subsequent pairs

WHAT’S HAPPENING: Bank of England (BOE) monetary policy committee members vote 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 GBP, whereas a lower-than-expected reading should be taken as negative/bearish for the GBP.

Initial Jobless Claims, U.S.

WHEN: WHAT IT INFLUENCES:

22^ndSEPTEMBER 2022 USD and its subsequent pairs

WHAT’S HAPPENING: 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.

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

Core Retail Sales (MoM) (Jul), CANADA

WHEN: WHAT IT INFLUENCES:

23^rd SEPTEMBER 2022 CAD and its subsequent pairs

WHAT’S HAPPENING: Core Retail Sales measures the change in the total value of sales at the retail level in Canada, excluding automobiles. It is an important indicator of consumer spending and is also considered a pace indicator for the Canadian economy.

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.

Manufacturing PMI (Sep), GERMANY

WHEN: WHAT IT INFLUENCES:

23^rd SEPTEMBER 2022 EUR and its subsequent pairs

WHAT’S HAPPENING: The German 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 indicates contraction.

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.

SNB Interest Rate Decision (Q3), SWITZERLAND

WHEN: WHAT IT INFLUENCES:

22^nd SEPTEMBER 2022 CHF and its subsequent pairs

WHAT’S HAPPENING: Swiss National Bank (SNB) governing board members come to a consensus on where to set the target range for 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 CHF, whereas a lower-than-expected reading should be taken as negative/bearish for the CHF.

EQUITIES IN THE COMING WEEK

AutoZone (AZO) to announce its Quarterly Results on 19^th SEPTEMBER 2022, EPS estimated to 38.57 per share while revenue estimated 5.16B.
General Mills (GIS) to announce its Quarterly Results on 21^stSEPTEMBER 2022, EPS estimated to 0.9863 per share while revenue estimated 4.68B.
Accenture (ACN) to announce its Quarterly Results on 22^ndSEPTEMBER 2022, EPS estimated to 2.58 per share while revenue estimated 15.43B.
FactSet Research (FDS) to announce its Quarterly Results on 22^ndSEPTEMBER 2022, EPS estimated to 3.21 per share while revenue estimated 487.34M.
Apogee (APOG) to announce its Quarterly Results on 20^th SEPTEMBER 2022, EPS estimated to 0.826 per share while revenue estimated 342.84M.