Weekly Technical Analysis with Candlestick Charts – 15 May, 2022

Weekly Technical Analysis with Candlestick Charts – 15 May, 2022

Technical Analysis

GDP (QoQ) (Q1), U.K.

WHEN: 12th May 2022                                                   WHAT IT HAD INFLUENCED: GBP and its subsequent pairs.

WHAT HAPPENED: Gross Domestic Product (GDP) gauges the inflation-adjusted value of all goods and services produced within the economy.  It is the most comprehensive measure of economic activity and an important indicator of economic health.  A reading that is stronger than forecast is generally supportive (bullish) for the GBP, while a weaker than forecast reading is generally negative (bearish) for the GBP.

GBP/USD is trading in a downward channel.  Further downside movement can be seen in the coming weeks.

Core CPI (MoM) (Apr), U.S.

WHEN: 11th May 2022                                                    WHAT IT HAD INFLUENCED: USD and its subsequent pairs.

WHAT HAPPENED: The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy.  The Central bank pays very close attention to this figure in its role of maintaining price stability.  Because the Fed believes that core inflation is a better gauge of underlying price pressures, it is more closely watched than overall inflation which tends to be more volatile.  A reading that is stronger than forecast is generally supportive (bullish) for the USD, while a weaker than forecast reading is generally negative (bearish) for the USD.

USD/CHF is trading in an upward channel.  Further upside movement can be seen in the coming weeks.

German ZEW Economic Sentiment (May), Eurozone

WHEN: 10th May 2022                                                   WHAT IT HAD INFLUENCED: EUR and its subsequent pairs.

WHAT HAPPENED: 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.  The reading is compiled from a survey of about 350 German institutional investors and analysts.  A reading that is stronger than forecast is generally supportive (bullish) for the EUR, while a weaker than forecast reading is generally negative (bearish) for the EUR.

EUR/USD is trading below its previous upward channel.  Further downside movement can be seen in the coming weeks.

Building Permits (MoM) (Mar), Canada

WHEN: 09th May 2022                                                   WHAT IT HAD INFLUENCED: CAD and its subsequent pairs.

WHAT HAPPENED: Building Permits reports the change in the quantity of new building permits issued by the government relative the prior month.  Building permits are an important leading indicator of housing starts.  A reading that is stronger than forecast is generally supportive (bullish) for the CAD, while a weaker than forecast reading is generally negative (bearish) for the CAD.

CAD/JPY is trading in a downward channel.  Further downside movement can be seen in the coming weeks.

NAB Business Confidence (Apr), Australia

WHEN: 10th May 2022                                                   WHAT IT HAD INFLUENCED: AUD and its subsequent pairs.

WHAT HAPPENED: The National Australia Bank (NAB) Business Confidence Index rates the current level of business conditions in Australia.  Changes in business sentiment can be an early signal of future economic activity such as spending, hiring, and investment.  The index is based on data collected from a survey of around 350 companies.  A level above zero indicates improving conditions; below indicates worsening conditions.  A higher-than-expected reading should be taken as positive/bullish for the AUD, while a lower-than-expected reading should be taken as negative/bearish for the AUD.

AUD/USD is trading in a downward channel.  Further downside can be seen in the coming weeks

Gold prices below $1800, record fourth consecutive weekly decline

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED:   Gold prices dropped around 3.5% this week as equities and bond yields rose.  On Monday, it opened the week on a bearish note closing below the $1800-level.  Although the yellow metal managed to stage a minor rebound of around 0.5% on Wednesday, the price dropped further as the market mood soured on Thursday.  This boosted the safe-haven dollar, causing gold to suffer heavy losses and drop below its 200-day Simple Moving Average (SMA) for the first time since February.

Gold recorded its fourth consecutive week of decline as the dollar’s strength proved a significant headwind for the yellow metal.  The Dollar Index (DXY) closed the week at an all-time high of $1044.5016.  A strong dollar typically spells bad news for the dollar-denominated commodities as it becomes too expensive for foreign buyers.

The immediate support and resistance are seen at the $1780 and $1800 – levels.

Gold is trading in a downward channel.  Further downside is seen in the coming weeks.

Crude oil recovered after a bearish start this week.

WHAT IT HAD INFLUENCED:

WTI CRUDE OIL

WHAT HAPPENED: Chicago WTI crude oil futures price is up 0.36% this week after witnessing a volatile week.  Price opened this week on heavy bearish pressure, dropping around 6%.  On Monday, the broader market selloff resulted from the European Union (EU) softening up on its earlier call to ban Russian crude oil imports.  Prices further declined on Tuesday due to rising inventories of crude oil and its products.  However, prices rebounded on Wednesday after a plunge of nearly 10% over the last two trading sessions, supported by supply concerns.  The possibility of stimulus support by the Chinese central bank also serves as a tailwind.  

Many analysts have warned of a supply vacuum with the increasing sanction on Russia and as the EU mulls a ban on Russian crude oil imports.  However, an International Energy Agency (IEA) report highlighted the dueling factors in the market.  It stated that the rising oil production in the Middle East and the United States and a slowdown in demand growth are “expected to fend off an acute supply deficit amid a worsening Russian supply disruption.”

The immediate support and resistance are seen at the $104 and $115 – levels.

WTI Crude oil is trading in an upward channel. Further upside is seen in the coming weeks.

Bitcoin below the $30,000 – level as crypto market crash.

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED: Bitcoin price has crashed around 60% from its all-time high at $69,000. Price opened the week on a heavy bearish pressure, plunging around 11%. While price dipped below the $30,000 – level on early Tuesday trades, it was able to stabilizes at $31,000 – level. However, the rebound was short lived as price slipped below the $30,000 – level on Wednesday, leading to 40% of the Bitcoin holders being underwater. Being underwater is a term used to describe addresses that hold and that were purchased above the current market price. The price hits its lowest level since December 2020 at $25,338.95 on Thursday. Prices rebounded on Friday and early Saturday trades; however, the price will face a strong resistance at the $30,000 – level. Many veteran analysts and traders expect Bitcoin price to drop to $20,000 – level, citing historical trend.

The immediate support and resistance are seen at $25,350 and $30,000 – levels.

BTCUSD is trading in a downward channel. Further downside is seen in the coming weeks

5 KEY EVENTS TO WATCH OUT

CPI (YoY) (Apr), U.K.

WHEN: 18th May 2022                                                   WHAT IT HAD INFLUENCED: GBP and its subsequent pairs.

WHAT’S HAPPENING: The Consumer Price Index (CPI) measures the change in the prices of goods and services contained in a basket of consumer items.  The Central bank pays very close attention to this figure in its role of maintaining price stability.

A reading that is stronger than forecast is generally supportive (bullish) for the GBP, while a weaker than forecast reading is generally negative (bearish) for the GBP.

Initial Jobless Claims, U.S.

WHEN: 19th May 2022                                                   WHAT IT HAD INFLUENCED: USD and its subsequent pairs.

WHAT’S HAPPENING:  Initial Jobless Claims measures the number of people who filed for unemployment insurance for the first time during the past week.  This is the timeliest U.S. economic data, but the market impact varies from week to week.

A reading that is higher than forecast is generally negative (bearish) for the USD, while a lower than forecast reading is generally supportive (bullish) for the USD.

CPI (YoY) (Apr), Eurozone

WHEN: 18th May 2022                                                   WHAT IT HAD INFLUENCED: EUR and its subsequent pairs.

WHAT’S HAPPENING: The Consumer Price Index (CPI) measures the change in the prices of goods and services contained in a basket of consumer items.  The Central bank pays very close attention to this figure in its role of maintaining price stability.

A reading that is stronger than forecast is generally supportive (bullish) for the EUR, while a weaker than forecast reading is generally negative (bearish) for the EUR.

Core CPI (MoM) (Apr), Canada

WHEN: 18th May 2022                                                   WHAT IT HAD INFLUENCED: CAD and its subsequent pairs.

WHAT’S HAPPENING: The Core Consumer Price Index (CPI) measures the change in the prices of goods and services from the perspective of the consumer (excluding food and energy).  The Central bank pays very close attention to this figure in its role of maintaining price stability, as it excludes the volatile food and energy components.

A reading that is stronger than forecast is generally supportive (bullish) for the CAD, while a weaker than forecast reading is generally negative (bearish) for the CAD.

Employment Change (Apr), Australia

WHEN: 19th May 2022                                                   WHAT IT HAD INFLUENCED: AUD and its subsequent pairs.

WHAT’S HAPPENING: Employment Change reports the change in the number of people employed across Australia.  Jobs and the income they generate is an important factor in consumer spending.

A reading that is stronger than forecast is generally supportive (bullish) for the AUD, while a weaker than forecast reading is generally negative (bearish) for the AUD.

EQUITIES IN THE COMING WEEK

1.  Walmart (WMT) is expected to announce its quarterly result on 17th May 2022, EPS is estimated to be $1.47 per share while revenue is forecasted to be 317.04B.

2.  Home Depot (HD) is expected to announce its quarterly result on 17th May 2022, EPS is estimated to be $3.63 per share while revenue is forecasted to be 36.36B.

3.  Cisco (CSCO) is expected to announce its quarterly result on 18th May 2022, EPS is estimated to be $0.8627 per share while revenue is forecasted to be 13.34B.

4.  Target (TGT) is expected to announce its quarterly result on 18th May 2022, EPS is estimated to be $3.04 per share while revenue is forecasted to be 24.36B.

5.  Salesforce.com (CRM) is expected to announce its quarterly result on 19th May 2022, EPS is estimated to be $0.9462 per share while revenue is forecasted to be 7.38B.

TOP COMMODITIES IN THE COMING WEEK

GOLD

Weekly Technical Analysis

GOLD is trading in a downward channel. Further downside is seen in the coming weeks.

SILVER

Weekly Technical Analysis

SILVER is trading in a downward channel. Further downside is seen in the coming weeks.

WTI CRUDE OIL

Weekly Technical Analysis

WTI CRUDE Oil is trading in an upward channel. Further upside is seen in the coming weeks.

TOP CRYPTO IN THE COMING WEEK

BTCUSD

Weekly Technical Analysis

BTCUSD is trading in a downward channel. Further downside is seen in the coming weeks.

ETHEREUM

Weekly Technical Analysis

ETHEREUM is trading in a downward channel. Further downside is seen in the coming weeks.

TOP CURRENCY IN THE COMING WEEK

EURUSD

Weekly Technical Analysis

EUR/USD is trading below its previous upward channel.  Further downside movement can be seen in the coming weeks.

GBPUSD

Weekly Technical Analysis

GBPUSD is trading in a downward channel. Further downside is seen in the coming weeks.

EURJPY

Weekly Technical Analysis

EURJPY is trading below its previous upward channel. Further downside is seen in the coming weeks.

TOP INDEX IN THE COMING WEEK

NASDAQ 100

Weekly Technical Analysis

NASDAQ 100 is trading in a downward channel. Further downside is seen in the coming weeks.

S&P 500

Weekly Technical Analysis

S&P 500  is trading in a downward channel. Further downside is seen in the coming weeks.

DATA WATCH

TimeCurrencyEventForecastPrevious
Tuesday, May 17, 2022    
07:00AUDRBA Meeting Minutes
11:30GBPAverage Earnings Index + Bonus (Mar)5.40%5.40%
11:30GBPClaimant Count Change (Apr)-38.8K-46.9K
18:00USDCore Retail Sales (MoM) (Apr)0.30%1.40%
18:00USDRetail Sales (MoM) (Apr)0.80%0.70%
22:30EURECB President Lagarde Speaks
23:30USDFed Chair Powell Speaks
Wednesday, May 18, 2022    
11:30GBPCPI (YoY) (Apr)9.10%7.00%
14:30EURCPI (YoY) (Apr)7.50%7.50%
18:00CADCore CPI (MoM) (Apr)0.50%1.00%
18:00USDBuilding Permits (Apr)1.810M1.870M
20:00USDCrude Oil Inventories-0.457M8.487M
Thursday, May 19, 2022    
07:00AUDEmployment Change (Apr)40.0K17.9K
18:00USDPhiladelphia Fed manufacturing Index (May)16.70%17.60%
18:00USDInitial Jobless Claims203K
19:30USDExisting Home Sales (Apr)5.62M5.77M
Friday, May 20, 2022    
11:30GBPRetail Sales (MoM) (Apr)-2.00%-1.40%

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