Archive for Financial News

Hyperinflationary Expectations: Reflections on Cryptocurrency and the Markets

Source: Michael Ballanger for Streetwise Reports   06/16/2021

Sector expert Michael Ballanger offers insights from bear markets of the past to illuminate the “business of money.”

How quickly we forget.

In each of the last five bear markets since the 1970s, I have etched into my neural storage unit memories as strong and clear as if they happened yesterday. Each one of those nasty declines were accompanied with events that marked the tops and bottoms, consistently found in errant behaviors, and whether they originate from greed, fear or desperation, they were memorable.

Some of those events were the irrational decisions of the investment industry, which always increases staff at the tops and reduces staff at major bottoms. It is found in the emotion-charged decisions of clients who would write letters of complaint because I would not them buy shares in the Hot Stock of the Month, usually some dilly named “Underground Airlines” or “Rectal Gas.”

But the classic bottom-spotting signal always came from the financial advisors, whose evolution from the term “salesmen” in the 1960s and 1970s morphed into “registered representatives” in the ’80s, “financial consultants” in the ’90s, and finally settled as the industry-standard moniker for 2021, “wealth managers.”

A very wealthy businessman from Sarnia, notorious in the local brokerage community for being a “tough sell,” once said to me “Young man, you are the person that takes the bus to work to advise the man that drives a Porsche to work on how he should invest his money, right?” (He wasÖ).

Another memorable story was the broker who had placed a cold call to that same old Sarnia cuss, introducing himself and his brokerage firm at the onset of the sales pitch. Well, it seems that the call went very poorly, during which the prospective client hurled every imaginable insult at the salesman, finally finishing off his diatribe with some ignominious remark about the salesman’s sexual preferences. Pausing for a brief second to determine the wise choice of action, the conversation ended like this:

Salesman: “Mr. Jones, it seems that you are disinterested in the services I have offered. Let me ask you two final questions.”

Mr. Jones: “Fine!”

Salesman: “Do you remember my name?”

Mr. Jones: “No! Why would I remember your name?”

Salesman: “Do you remember the name of my firm?”

Mr. Jones: No! I could care less about your crappy little bucket shop!”

Salesman: “All right, you don’t remember my name and you don’t remember my firm’s name. Correct?”

Mr. Jones: “Correct, Einstein!”

Salesman: “Great. Now go $%$^ yourself.”

Click.

Another great little jewel of an event occurred literally within days of the bottom of the 1981ñ1982 bear market on an elevator in the old Royal Bank building in London, Ontario. A certain high-profile broker known to have a quick wit and slow temper entered the car on the eighth floor and proceeded to sigh and stare down at his shoes for the first few floors. I put on my cheeriest (and phoniest) smile and asked: “Dougieóhow’s it going?” He responded with the singular greatest bottom-spotting indicator of the entire bear market: “Let me tell you how it’s going. I have one client left and that’s me and I am looking for a new broker.

There are literally dozens of little anecdotes like these collected and stored over the last forty years, and while some are entertaining, many are simply instructive of the massive swings in sentiment that one encounters when it comes to the business of “money.”

Here in 2021, behaviors are very similar to those found in 1999 and 1987, and they are in direct contrast to those found at major bottoms in that the euphoria currently gripping the emerging and very youthful “new class” of investors is of a magnitude that made the dot-com bubble pale by comparison.

In the late summer of 1987, I was attending the monthly meeting of the London Chamber of Commerce. Each month a certain “professional” would be asked to speak on a topic that was deemed to be his or her “area of expertise.” One month it would be an accountant and the next a realtor and the next an accountant, after which there would be complimentary cocktails and an informal question-and-answer session. In September of ’87, I was asked to speak about the “booming stock market,” and as I had grown increasingly wary of all of the wild-eyed speculation during that summer, I proceeded to paint a picture of impending doom and the need for caution and restraint.

Well, after the session, what appeared at the time to resemble a lynch mob descended upon me, waving their Manhattans and martinis at me like war clubs, and they proceeded to levy insult after insult as they vociferously shouted the myriad of reasons why stocks were “different” this time, and that speeches like the one I just gave were “dangerous.” One elderly gentleman even threatened to send a letter to my employer, advising them of the errant prognostications of “that dour young man.”

One month after I had to drop off my suit, stained with the juices of olives and cherries (and the odd lemon rind) at the cleaners, the stock market crashed. It took the Dow Jones down 38% from the prior peak, with a 23.7% drop on Oct. 19 alone. Needless to say, just as “hell hath no fury like a woman scorned,” it also applied to the speculator class of investors, who were all summarily taken out to the woodshed and pummeled to within an inch of their financial lives.

Last week, I had the pleasure of speaking with a younger member of the Millennial demographic who quit his job in 2016 to embark upon a career as a serial day trader, blogger, and social media “influencer,” with several thousand followers on Twitter and Instagram. It seems that he (and his followers) decided last summer to sell their stock portfolios and go “All In Bitcoin” at around the $10,000 level.

This young man claimed to have a “plan” that had worked without a hitch for most of the next nine months, but at $55,000 he and his followers discovered the wonderment of leverage and they proceeded to quintuple their positions, using borrowed money, because some electric car guy had decided to put all of his working capital into crypto. It seems the “plan” they had was the same one to which Iron Mike Tyson referred when he said, “Everyone’s got a plan til they get punched in the mouth.”

I do not need to finish off this sad anecdote, but needless to say, this new generation of investors think that the arrival of the Carl Icahns or Elon Musks into the world of social media indoctrination and cryptocurrency participation was a validation of sorts that should be celebrated as the next coming of the Messiah. Sadly, when the Goldman Sachs and JP Morgans of the financial world enter any trading pit, sexagenarian battle scars tell me to sew my wallet to the inside of my sports jacket while I strap my shirt to my back.

These youngsters would have been far better off keeping their cryptocurrency sandbox to themselves, rather than let the “smiling cobras” in, with their disingenuous cheerleading and CNBC sponsorship. The “old guys” from Wall Street looked down from their C-suite towers and saw a brand-new herd of gazelles brandishing pockets full of newly found wealth, and by signaling to the world that they were “initiating coverage” on Bitcoin, it was a seminal “come into my parlor, said the spider to the fly” moment. Here we are, sixty days later and with thousands of Millennial bodybags piling up at the side of the Road to Riches as a result of unbridled greed and unprecedented naivete.

The markets today are entering the summer buoyed by the end of the lockdowns, with supply shock bottlenecks slowly beginning to unclog themselves, liquidity levels incredibly high and “cash on the sidelines” growing rapidly. Normally, I would expect a late-spring selloff in advance of the usual summer rally, but for the metals, it is getting monotonous, as we continue to get report after report of higher prices literally everywhereóexcept for gold and silver, which remain locked in a bullion bank death grip.

How on earth can you get a CPI reading over 5% and have gold prices stay dormant? Answer: bullion bank interference. Jerome Powell’s insistence that this spike in inflation rates is “transitory” only works if the two key barometers of currency debasement are held in check. Gold and silver charging to new highs would send a signal to the bond vigilantes that yields are headed higher, and if you thought the COVID Crash of 2020 was ugly, watch what happens when the bond market participants, all operating on the razor’s edge of leveraged long positions, decide to move from the port to the starboard side of the Titanic. “Ugly” times fiftyÖ

I am of the opinion that there is soon to arrive an “Emperor’s New Clothes” moment, when the bond market decides that central bank omnipotence is somewhat “overrated” and to go with hyperinflationary expectations, as opposed to the status quo. At that moment, the safety of the sound money and assets that you can actually hold in your hand and store in your vaults take precedence over digital havens and virtual hedges. That moment does not appear to be on the immediate horizon, but it is most certainly out there, and remains the reason I continue to hold big positions in the gold and silver developers, with positional emphasis on those companies with undervalued and expanding resources (ounces).

As this missive is being written, copper and silver are up 2.11% and 1.33% (respectively), while gold is down 0.5%. I need to see a two-day close above US$1,910/ounce for gold and a two-day close above US$28.50/ounce for silver. Without those, we are swimming in shark-infested waters.

Originally published Friday, June 4, 2021.

Follow Michael Ballanger on Twitter @MiningJunkie. He is the Editor and Publisher of The GGM Advisory Service and can be contacted at [email protected] for subscription information.

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger’s adherence to the concept of “Hard Assets” allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

Disclosure:
1) Statements and opinions expressed are the opinions of Michael Ballanger and not of Streetwise Reports or its officers. Michael Ballanger is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation. Michael Ballanger was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
3) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Michael Ballanger Disclaimer:
This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

 

The Week Ahead – ‘Transitory’ Is The Word To Contain Sell-Off

By Orbex

EURUSD tanks on US taper hint

EURUSD

The US dollar surged after the Fed signaled two potential rate hikes in 2023.

The central bank’s switch to a hawkish stance came in sooner than expected and took markets by surprise. The next logical step would be to start to unwind $120 billion a month of asset purchases, which could happen after summer.

Traders are now pricing in the taper by the end of the year as the short side scrambles to cover volatility which could heighten in the coming days.

The euro is sliding towards April’s low at 1.1700. A breakout could trigger a bearish reversal.

On the upside, 1.2200 stands firms as a major supply area.

GBPUSD retreats ahead of BoE meeting

GBPUSD

Sterling is heading lower against a flamboyant greenback following a surprisingly optimistic FOMC. As the BoE convenes to discuss its monetary policy, the bulls are hoping for a similar trick up their sleeve.

With inflation now past the central bank’s 2% target, governor Andrew Bailey might be under increasing pressure to act. If the committee deviates from its dovish rhetoric, the pound could see strong buying interest.

If not, the pair could reverse to the downside as a result of policy divergence.

1.4250 has established itself as the closest resistance. 1.3800 is the critical support to keep the uptrend relevant.

SPX 500 keeps gains as investors ponder reflation threat

SPX500

The S&P 500 continues to grind up despite the Fed’s hawkish policy update.

Reactions across equity markets have been rather mild compared to currency and commodity markets.

While officials brought forward their hike schedule, they have carefully nurtured expectations that inflation would drop back later this year. There is definitely trust in their reassurance so far.

Only if the Fed drops the word ‘transitory’ would it be a game-changer.

As for now, the door stays open for interpretation when the next sets of data hit the wires. 4300 would be the target when the rally resumes. 4040 is a key support to keep the uptrend valid.

USOIL softens on uncertain demand

USOIL

WTI crude is pulling back as demand outlook hits a bump.

Rising Covid cases and a four-week delay in the UK’s lockdown easing are the latest examples of a choppy recovery.

While price action has bounced well above the pre-crisis level, restrictions on travel have prevented the actual demand to catch up with expectations.

On the supply side, Iran’s presidential election could derail nuclear talks with Washington if the hardline candidate Raisi comes into power.

Oil prices may hold steady as global supply remains tight.

The rally is heading towards October 2018’s peak at 76.90. 66.00 on the bullish trendline is a major support.

By Orbex

USDCHF Eyeing 0.935 Following Zigzag Completion

By Orbex

The current USDCHF formation suggests that the bullish intervening wave x of a cycle degree has completed. Then the market began to move in a downward direction within the cycle actionary wave z.

Most likely, wave z will be simple in shape and will have an Ⓐ-Ⓑ-Ⓒ zigzag structure. The impulse wave Ⓐ has already fully completed and the construction of the ascending primary correction Ⓑ has begun.

It is assumed that the intermediate sub-waves (A)-(B)-(C) will complete the zigzag correction Ⓑ near 0.935. At that level, wave Ⓑ will be at 76.4% of impulse Ⓐ.

In the future, after the correction of prices in the wave Ⓑ, the bulls could fall in the impulse Ⓒ below 0.892.

Let’s consider an alternative scenario, in which the formation of the primary correction Ⓑ has ended.

It is possible that it is an intermediate double (W)-(X)-(Y) zigzag, which can end near 0.926. At that level, wave Ⓑ will be at 61.8% of impulse wave Ⓐ.

If confirmed, the pair could devalue in wave Ⓒ to the 0.872 area.

At that level, primary impulse waves Ⓐ and Ⓒ will tend to be equal.

By Orbex

Fibonacci Retracements Analysis 18.06.2021 (AUDUSD, USDCAD)

Article By RoboForex.com

AUDUSD, “Australian Dollar vs US Dollar”

As we can see in the daily chart, there is a new descending wave after a divergence on MACD. The current technical pictures may be described as a long-term correction approaching 23.6% fibo at 0.7415. The next downside targets may be 38.2% and 50.0% fibo at 0.7053 and 0.6767 respectively. The resistance is the high at 0.8007.

AUDUSD_D1
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

The H4 chart of AUDUSD shows an attempt to break the previous fractal low at 0.7532. If the price succeeds, the market may continue falling towards the post-correctional extension area between 138.2% and 161.8% fibo at 0.7395 and 0.7311 respectively. The local resistance is at 0.7891.

AUDUSD_H4
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCAD, “US Dollar vs Canadian Dollar”

As we can see in the daily chart, after a test of the long-term low and a convergence on MACD, the pair is moving to the upside towards 23.6%, 38.2%, 50.0%, 61.8%, and 76.0% fibo at 1.2636, 1.3023, 1.3336, 1.3649, and 1.4028 respectively. As a result, we may assume that the pair is about to start a new long-term uptrend. The support is the low at 1.2007.

USDCAD_D1
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

The H4 chart shows an ascending correction after the previous descending wave. The pair is approaching 61.8% fibo at 1.2407, a breakout of which may lead to a further uptrend towards 76.0% fibo at 1.2499. However, the key upside target is the resistance at 1.2654.

USDCAD_H4

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Profit From This Surge In Price – But Check Your Emotions At The Door And Stick With Proven Trading And Investing Rules

By TheTechnicalTraders

For the first time Chris Vermeulen, founder and chief strategist of TheTechnicalTraders.com, joins Kai Hoffmann on Soar Financial to talk trading strategies, precious metals, what the cost is when parabolic moves happen in the market.

CLICK ON THE IMAGE BELOW TO WATCH THE INTERVIEW

GET YOUR DAILY DOSE OF CHRIS’S SILVER AND GOLD ANALYSIS ALONG WITH THE HOTTEST ETFS TO TRADE WITH BAN TRADER PRO!

TheTechnicalTraders.com

Intraday Market Analysis – USD In Overbought Conditions

By Orbex

USDCHF tests daily resistance

USDCHF

The US dollar carries on its rally as the SNB sticks with ultra-loose policy.

Strong momentum above 0.9090 indicates that the directional bias has shifted to the upside as sellers rush to bail out. The rebound is now testing the resistance at 0.9200 on the daily chart.

The RSI shows overextension and could lead to a temporary pullback. The former supply zone near 0.9070 and the 30-hour moving average is the first support.

0.9270 is the nearest resistance when buyers renew their pressure.

AUDUSD tanks to critical demand area

AUDUSD

A drop in Australia’s unemployment rate barely lifted its currency as traders’ prices in the US taper.

The breakout below the demand area at 0.7600 is a sign of mounting bearish pressure. 0.7530 is a critical support to safeguard the uptrend from a medium-term perspective. Its breach could trigger an extended sell-off leading to a reversal.

An oversold RSI is rising back to the neutral area.

A combination of profit-taking and fresh buying may lift the price to the immediate resistance at 0.7640.

UK 100 retreats to key support

UK100

The FTSE index consolidates as traders ponder inflation threat post-FOMC.

The rally above May’s high at 7160 is a bullish sign though short-term data-driven volatility is unlikely to die down. 7200 has capped buyers’ attempts to push higher and is now a key hurdle.

A dip below 7135 may force leveraged buyers to abandon ship, especially when a divergent RSI points to a loss in the upward momentum.

7100, a resistance-turned-support is an area of congestion as it lies on the 20-day moving average.

By Orbex

Norway keeps rate, says rate likely to be hiked in Sept.

By CentralBankNews.info

 Norway’s central bank left its monetary policy rate steady, as expected, but said it would most likely raise the rate September – the first rate hike in two years – as economic activity has bounced back faster than expected after the negative impact of COVID-19 last year.
Norges Bank (NB), which slashed its policy rate three times last year by a total of 1.50 percentage points to 0.0 percent, kept the rate at a rock-bottom level as there is still uncertainty about the pandemic and the overall outlook and balance of risk imply a continued expansionary monetary policy stance.
     “There is still uncertainty regarding the evolution of the pandemic, but economic activity now seems to be rebounding sharply and somewhat faster than projected earlier,” NB said, with its governor, Oeystein Olsen, adding the policy rate “will most likely be raised in September.”
      The bank’s monetary policy committee is scheduled to meet on Aug. 19 and then on Sept. 23, when it updates its monetary policy report, which is issued four times a year.
     Encouraged by the recovery of economic activity, NB has been steadily pulling forward its first rate hike after the three rate cuts last year.
     In December last year, for example, the central bank pencilled in the first hike in the first half of 2022 but then in March the rate hike rate was pulled forward to the second half of 2021.
     In April, when the bank’s monetary and financial stability committee previously met, it also said the rate would most likely be raised in the latter half of 2021, and today narrowed down the date to September.
     After economic activity in Norway came to a halt in March and April last year when the pandemic swept the globe, activity picked up in following months until the recovery once again stalled in the autumn and in the first months of this year when infection rates rose again.
     But with infection rates declining and the pace of vaccinations picking up, Covid-restrictions are being lifted, with the reopening boosting economic activity as household consumption jumps, helped by accumulated savings, and investments also pick up, including in the oil-related industry.
     Although underlining inflation is below the bank’s 2.0 percent target, NB said higher global inflation and inflation expectations are creating uncertainty about inflation ahead and continued low interest rates increase the risk of a build-up of financial imbalances, such as the marked rise in house prices.
     Norway’s headline inflation rate has eased in the last three months to 2.7 percent in May from 3.3 percent in February with core inflation falling to 1.5 percent in May from a recent high of 3.7 percent in August last year.
     Helped by the rise in the krone’s exchange rate since 2020 and prospects for moderate wage growth, NB expects inflation to remain below its target in coming years, forecasting headline inflation of 2.8 percent  this year, unchanged from March, then 1.1 percent in 2020, also unchanged, and 1.3 percent in 2023, down from 1.5 percent.
      After Norway’s gross domestic product bounced back in the third quarter of 2020, with quarterly growth of 4.3 percent, the growth rate slipped to 0.8 percent in the fourth quarter and minus 0.6 percent in the first quarter of this year for an annual contraction of 1.4 percent.
      In 2020 mainland GDP shrank 3.1 percent but is forecast to grow 3.8 percent this year, unchanged from March, and then 3.6 percent in 2022, up from 3.4 percent, and 1.2 percent in 2023, unchanged.
     Although the policy rate is still seen averaging 0.1 percent this year, the rate is seen rising to 0.8 percent in 2022, up sharply from the March forecast of 0.3 percent, and implying 3 rate hikes of 25 basis points.
     In 2023 the rate is seen averaging 1.3 percent, implying another 2 hikes.
     Norway’s krone has been strengthening steadily since November last year though it took a hit in recent days, as most other currencies, as the U.S. dollar rose after the U.S. Federal Reserve pulled forward its forecast for raising rates to 2023 from 2024.
     The krone was trading at 8.5 to the dollar today, down 2.2 percent since the start of June, but unchanged on the year.
     Norges Bank released the following press release:

“Norges Bank’s Monetary Policy and Financial Stability Committee has unanimously decided to keep the policy rate unchanged at zero percent.

“In the Committee’s current assessment of the outlook and balance of risks, the policy rate will most likely be raised in September”, says Governor Øystein Olsen.

Activity in the Norwegian economy has picked up after the sharp fall in spring 2020. At the beginning of 2021, higher infection rates and tighter Covid-related restrictions held back the recovery. Through spring, the pace of vaccination has accelerated, and the authorities have begun a gradual reopening of society. Unemployment has fallen but remains high. There is still uncertainty regarding the evolution of the pandemic, but economic activity now seems to be rebounding sharply and somewhat faster than projected earlier.

Underlying inflation has slowed and is now below the 2% target. Higher global inflation and inflation expectations are creating uncertainty about inflation ahead. However, the krone appreciation since 2020 and prospects for moderate wage growth suggest that inflation in Norway will remain below target in the coming years. As long as capacity utilisation is rising, there is limited risk of inflation becoming too low.

The Committee placed weight on the contribution of low interest rates to speeding up the return to more normal output and employment levels. This reduces the risk of unemployment becoming entrenched at a high level and helps return inflation towards the target. At the same time, a long period of low interest rates increases the risk of a build-up of financial imbalances. The Committee placed weight on the marked rise in house prices since spring 2020 but noted that house price inflation has recently moderated somewhat.

In the Committee’s assessment, the overall outlook and balance of risks imply a continued expansionary monetary policy stance. Further easing of Covid-related restrictions will help a return to more normal economic conditions. This suggests that it will soon be appropriate to raise the policy rate from the current level.

The policy rate forecast is slightly higher than in the March 2021 Monetary Policy Report and implies a gradual rise from autumn 2021.”

www.CentralBankNews.info

Ichimoku Cloud Analysis 18.06.2021 (EURUSD, USDJPY, NZDUSD)

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD is trading at 1.1903; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 1.1960 and then resume moving downwards to reach 1.1725. Another signal in favor of a further downtrend will be a rebound from the descending channel’s upside border. However, the bearish scenario may be canceled if the price breaks the cloud’s upside border and fixes above 1.2185. In this case, the pair may continue growing towards 1.2275.

EURUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDJPY, “US Dollar vs Japanese Yen”

USDJPY is trading at 110.04; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test the cloud’s upside border at 109.75 and then resume moving upwards to reach 111.15. Another signal in favor of a further uptrend will be a rebound from the rising channel’s downside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 109.25. In this case, the pair may continue falling towards 108.35.

USDJPY
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

NZDUSD, “New Zealand Dollar vs US Dollar”

NZDUSD is trading at 0.6975; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 0.7005 and then resume moving downwards to reach 0.6815. Another signal in favor of a further downtrend will be a rebound from the descending channel’s downside border. However, the bearish scenario may be canceled if the price breaks the cloud’s upside border and fixes above 0.7205. In this case, the pair may continue growing towards 0.7305.

NZDUSD

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Analytical Overview of the Main Currency Pairs on 2021.06.18

by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.1993
  • Prev Close: 1.1905
  • % chg. over the last day: -0.74%

The EUR/USD currency pair decreased by 0.74% due the rise of the dollar index. Buyers’ reaction is very weak, but now the price has approached the global support of the higher timeframe, and the vertical volumes have decreased, indicating that the sellers are not so active anymore.

Trading recommendations
  • Support levels: 1.1908, 1.1835, 1.1809
  • Resistance levels: 1.1962, 1.2002, 1.2050, 1.2109, 1.2144, 1.2174, 1.2212, 1.2243

The sellers’ pressure is still higher than the buyers’. But the MACD indicator has started signaling a divergence. The best strategy for traders is to look for the sell trades from resistance levels. But considering the strong deviation from the middle line and the presence of support levels of a higher timeframe, it is possible to look for buy deals. But it is better to look for entry points on the intraday interval and with short targets.

Alternative scenario: if the price breaks through the 1.2144 resistance level and fixes above, the general uptrend is likely to resume.

EUR/USD
There is no news feed for today.

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.3981
  • Prev Close: 1.3923
  • % chg. over the last day: -0.48%

The GBP/USD currency pair decreased by 0.42% on Thursday. The situation is very similar to the one with the euro, with the difference that the British pound reached a strong daily support level of 1.3914. Taking into account the reduction of volume, there is a good chance of a corrective upside bounce.

Trading recommendations
  • Support levels: 1.3914, 1.3835, 1.3801
  • Resistance levels: 1.4002, 1.4075, 1.4100, 1.4138, 1.4191

The trend on the GBP/USD currency pair is bearish on the H1 timeframe. At the moment, the price is trading below the moving average. The MACD indicator is oversold, but there are first signs of divergence. Under such market conditions, traders are better to look for the sell trades from resistance levels. Considering the strong deviation from the moving average, traders can also look for the buy trades from the support level of 1.3914 on the intraday timeframes.

Alternative scenario: if the price breaks through the 1.4138 resistance level and consolidates above, the bearish scenario is likely to be canceled.

GBP/USD
News feed for 2021.06.18:
  • – UK Retail Sales (m/m) at 09:00 (GMT+3).

The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 110.63
  • Prev Close: 110.23
  • % chg. over the last day: -0.36%

The USD/JPY currency pair slightly corrected yesterday due to the strengthening of the Japanese Yen. The resistance level of 110.73 remained for the sellers. Tonight, the Bank of Japan reported on monetary policy. Inflation in Japan has entered a positive zone for the first time in 14 months, but since the inflation target forecast does not exceed 2%, no changes in the monetary policy are planned.

Trading recommendations
  • Support levels: 110.08, 109.83, 109.62, 109.31
  • Resistance levels: 110.31, 110.73 110.94, 111.48

The trend is bullish as the price is above the priority change level of 109.83. Now the price has reached the support level. Also, there is a local uptrend line in this zone. Traders are better to look for the buy trades from support levels after finishing the correction.

Alternative scenario: if the price falls below 109.83, the general downtrend is likely to resume.

USD/JPY
News feed for 2021.06.18:
  • – Japan National Consumer Price Index (m/m, y/y) at 02:30 (GMT+3);
  • – Japan BOJ Monetary Policy Statement at 02:30 (GMT+3);
  • – Japan BOJ Press Conference at 09:30 (GMT+3).

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2274
  • Prev Close: 1.2351
  • % chg. over the last day: +0.63%

The USD/CAD currency pair is still growing without significant corrections. On Thursday, the price increased by 0.63% and is now approaching the resistance level of the higher timeframe.

Trading recommendations
  • Support levels: 1.2321, 1.2251, 1.2190, 1,2148 1.2121, 1.2096
  • Resistance levels: 1.2388, 1.2519

Technically, the trend remains bullish. The price is trading above the moving average. The MACD indicator is in the overbought zone. There are the first signs of starting the correction move in the form of divergence. Now the buyers should wait for the price to decrease. It is possible to look for sell positions from resistance level on the lower timeframes, but trading against the trend is not recommended.

Alternative scenario: if the price breaks down through the 1.2121 support level and fixes below, the downtrend is likely to be resumed.

USD/CAD
There is no news feed for today.

by JustForex

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

S&P 500 and Dow Jones show little reaction to the Fed’s statements while Nasdaq rises

by JustForex

The US stock market showed multidirectional dynamics on Thursday. The Nasdaq technology index undoubtedly became the growth leader, jumping by 0.87% and making a new historic high. But the Dow Jones fell by 0.62%, setting a monthly low. Few people know that the US Federal Reserve raised the IOER (Interest Rate on Excess Reserves) on Wednesday to prevent negative yields in the debt market. The IOER rate hike causes a sharp rise in treasuries and the dollar index, but this effect, according to experts, will not last more than 1-2 weeks, after which everything will return to normal.

Neither the European indices show single dynamics. The German Dax increased by 0.11% on Thursday, while the British FTSE 100 fell by 0.44%. On Thursday, the UK reported its biggest daily growth of the new COVID-19 cases. But in general, the macroeconomic situation in Europe is positive, so investors expect the further growth of the indices. It is worth paying attention now to the companies with good revenue during the summer season.

Gold futures collapsed. The price lost over 900 ticks in 2 days. It was triggered by the yield of treasury bonds growth and the dollar index growth, with which the gold has an inverse relationship. But given the temporary effect, investors believe gold prices will continue to rise. At the moment, gold, silver, and a lot of mining companies are at good buying points.

Oil prices have corrected slightly but are still above $70 a barrel. The rising dollar makes oil more expensive in other currencies, restraining the demand. But in the short term, the oil demand will increase.

The Asian stock market showed little change. Hong Kong’s Hang Seng (+0.49%) was the growth leader, while China’s CSI 300 decreased by 0.36%. The Bank of Japan has reported on the monetary policy today. Rising commodity prices have led to higher fuel prices and, consequently, higher prices for consumer goods. Inflation rose slightly and is not expected to exceed the 2% target.

Main market quotes:

S&P 500 (F) 4,221.86 -1.84 (-0.04%)

Dow Jones 34,823.45 -210.22 (-0.62%)

DAX 15,727.67 +17.10 (+0.11%)

FTSE 100 7,153.43 -31.52 (-0.44%)

USD Index 91.90 +0.77 (+0.85%)

Important events:
  • – Japan National Consumer Price Index (m/m, y/y) at 02:30 (GMT+3);
  • – Japan BOJ Monetary Policy Statement at 02:30 (GMT+3);
  • – UK Retail Sales (m/m) at 09:00 (GMT+3);
  • – Japan BOJ Press Conference at 09:30 (GMT+3).

by JustForex

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.