WEEKLY TECHNICAL ANALYSIS & WEEKLY MARKET STRATEGY – 24 SEPTEMBER 2022
25 Sep 2022
WEEKLY SNAPSHOT
BoE Interest Rate Decision (Sep), U.K.
WHEN: WHAT IT HAD INFLUENCED:
22nd SEPTEMBER 2022 GBP and its subsequent pairs
WHAT HAPPENED: 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.
GBPNZD was trading in the upward channel. The downside can be seen in the coming week after the breakout downside.
Initial Jobless Claims, U.S.
WHEN: WHAT IT HAD INFLUENCED:
22nd SEPTEMBER 2022 USD and its subsequent pairs
WHAT HAPPENED: 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.
USDMXN is currently in the upward channel. Further upside can be seen in the coming week.
Manufacturing PMI (Sep), GERMANY
WHEN: WHAT IT HAD INFLUENCED:
23rd SEPTEMBER 2022 EUR and its subsequent pairs
WHAT HAPPENED: 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.
EURAUD is currently in the upward channel. Further upside can be seen in the coming week.
Gold prices hit two-year low on dollar strength, Fed rate concerns
WHAT IT HAD INFLUENCED:
GOLD
WHAT HAPPENED:
Gold prices dropped more than 1% to their lowest since April 2020 on Friday as a cocktail of factors from a robust dollar and elevated U.S. bond yields to worries around more U.S. interest rate hikes diminished bullion’s appeal.
Spot gold was down 1.7% at $1,642.79 per ounce by 1058 GMT and was heading for its second straight weekly decline, down 1.8%. U.S. gold futures GCv1 fell 0.5% to $1,672.10.
“The renewed strength of the dollar is pushing gold lower. The gold market’s short-term outlook is still challenged by the market looking for a peak in the dollar and especially in the yields,” said Ole Hansen, head of commodity strategy at Saxo Bank.
“Consumer price index numbers are likely to remain elevated and the Fed looks determined to bring down inflation. We are expecting gold prices to fall towards (the) $1,620 per ounce level and below $1,600 per ounce.”
Caught in gold’s slipstream, spot silver dropped 3.3% to $19.01 per ounce, palladium slipped 3.6% to $2,091.91 and platinum dipped 2.7% to $875.97. All three metals were heading for weekly declines.
GOLD is trading in the down channel; an downside will be seen in the coming days.
Oil prices plunge 4% with recession fears in focus
WHAT IT HAD INFLUENCED:
CRUDE OIL
WHAT HAPPENED:
Oil prices dumped on Friday to trade at levels not seen since January as the dollar index hit its strongest level in two decades and on demand fears as rising interest rates risked tipping major economics into recession.
Brent crude futures fell $3.74, or 4.13%, to $86.72 a barrel by 1313 GMT. U.S. West Texas Intermediate (WTI) crude futures were also down by $3.98, or 4.77%, to $79.51 a barrel.
Front-month Brent and WTI contracts were down 5.28% and 6.80% respectively over the past week.
Global equities hit a two-year low on Friday while the dollar index reached its highest level in two decades, putting downward pressure on oil.
“Weak European PMIs, growth concerns as result of aggressive monetary policy tightening in the US and Europe are weighing on risk assets. Oil prices are not immune to those growth concerns,” Giovanni Staunovo, analyst at UBS, said.
A downturn in business activity across the euro zone deepened in September, a survey showed, suggesting that a recession is looming as consumers rein in spending to contend with a cost-of-living crisis.
WTI CRUDE OIL is trading in the down channel; an downside will be seen in the coming days.
After an upgrade, the quantity of Ethereum issued drops by 95%.
WHAT IT HAD INFLUENCED:
ETHEREUM
WHAT HAPPENED:
The amount of Ethereum (ETH) being issued has fallen 95% since the cryptocurrency’s network upgrade was completed on September 15.
The amount of new Ethereum being issued has dropped from 3.79% to 0.20% since “the Merge” switched the digital token’s protocol to a more energy efficient proof-of-stake model.
The shift from a proof-of-work consensus mechanism to the new proof-of-stake protocol is expected to cut Ethereum’s energy consumption by 99.95%.
However, Ethereum’s daily token issuance has also plummeted since the change. Daily issuance refers to the total amount of new tokens created to reward crypto miners or validators.
Following the merge, the network has created 4,581.26 new Ethereum, a 95% reduction compared to the previous proof-of-work protocol.
Ethereum will be viewed as deflationary if the number of tokens issued each day is less than the amount that are regularly destroyed.
So far, Ethereum continues to produce more tokens than are being destroyed. However, concerns are growing about the number of new tokens being created.
Post-merge, Ethereum’s daily issuance has declined to 772 tokens a day from 12,500 before the upgrade.
The diminishing supply is also hurting Ethereum’s price, which has dropped 22% since the Merge and is now down 65% on the year at $1,300.00 U.S.
ETHEREUM is trading in the down channel; an downside will be seen in the coming days.
5 KEY EVENTS TO WATCH OUT
GDP (YoY), U.K.
WHEN: WHAT IT INFLUENCES:
30th 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.
Pending Home Sales (MoM) (Aug), U.S.
WHEN: WHAT IT INFLUENCES:
28th SEPTEMBER 2022 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 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.
GDP (MoM) (Jul), CANADA
WHEN: WHAT IT INFLUENCES:
29th SEPTEMBER 2022 CAD 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 CAD, whereas a lower-than-expected reading should be taken as negative/bearish for the CAD.
GDP (QoQ) (Q3), GERMANY
WHEN: WHAT IT INFLUENCES:
26th SEPTEMBER 2022 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 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.
CPI (YoY) (Sep), EURO ZONE
WHEN: WHAT IT INFLUENCES:
30th SEPTEMBER 2022 EUR and its subsequent pairs
WHAT’S HAPPENING: 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.
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
- Nike (NKE) to announce its Quarterly Results on 29th SEPTEMBER 2022, EPS estimated to 0.9299 per share while revenue estimated 12.3B.
- Micron (MU) to announce its Quarterly Results on 29th SEPTEMBER 2022, EPS estimated to 1.43 per share while revenue estimated 6.85B.
- Cintas (CTAS) to announce its Quarterly Results on 28th SEPTEMBER 2022, EPS estimated to 3.11 per share while revenue estimated 2.08B.
- Jefferies Financial (JEF) to announce its Quarterly Results on 28th SEPTEMBER 2022, EPS estimated to 0.635 per share while revenue estimated 1.35B.
- BlackBerry (BB) to announce its Quarterly Results on 27th SEPTEMBER 2022, EPS estimated to -0.0744 per share while revenue estimated 161.45M.
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 is trading in an up channel; an upside will be seen in the coming days.
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
ETEHREUM is trading in the down channel; an downside will be seen in the coming days.
TOP CURRENCY IN THE COMING WEEK
EURUSD
EURUSD is trading in the down channel; after the breakdown, if it sustains below channel further downside can be seen.
GBPUSD
GBPUSD is trading in the down channel; after the breakdown, if it sustains below channel further downside can be seen.
USDCHF
USDCHF is trading in the up channel; an upside will be seen in the coming days.
TOP INDEX IN THE COMING WEEK
NIKKEI 225
NIKKEI 225 is trading in the down channel; an downside will be seen in the coming days.
HANG SENG
HANG SENG is trading in the down channel; an downside will be seen in the coming days.
DATA WATCH
