Lukman’s Week Ahead: Market Themes To Watch Out For – Webinar Apr 06

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders. Enjoy an expert look at:

• The key themes driving the financial markets
• Technical and fundamental trading ideas on the MT4 platform
• How to use the latest FXTM trading signals
• Using fundamental analysis to increase your profit potential
• What to monitor over the coming week

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Sentiment Cautious as Volatile Quarter Comes To An End

The sentiment pendulum has swung between extremes over the past few months, placing investors on an emotional rollercoaster ride as monetary policy bazookas and handsome fiscal packages have struggled to lift global confidence.

Although Asian markets are edging higher this morning following the better-than-expected China data and overnight gains on Wall Street, caution still lingers in the air. Global stock markets are on track for their worst quarter since the global financial crisis in 2008 and could experience more pain in Q2 as economic data from across the world starts to illustrate the negative impact of the virus outbreak.

Pound weakens as UK growth flatlines in Q4

Investors who were looking for another opportunity to attack the Pound were given the thumbs up after the UK GDP second estimate revealed that the economy showed no growth during the final quarter of 2019. Economic growth printed at 0.0% QoQ, while on an annualized basis, growth expanded 1.1% in Q4 matching market expectations.

The road ahead for the Pound remains filled with obstacles and buying sentiment is likely to diminish further, especially after the latest sovereign ratings downgrade from Fitch and lingering uncertainty over Brexit haunt investor attraction towards the currency.

Focusing on the technical picture, GBPUSD is experiencing a technical rebound on the daily charts with prices trading around 1.2300 as of writing. A breakdown below the 50% Fibonacci level, could trigger a decline towards 1.2200 and 1.2050.

Dollar still wears crown

The mighty Dollar is on route to concluding the first quarter of 2020 standing tall against almost every single G10 currency, excluding the Swiss Franc and Japanese Yen.

In times of uncertainty, everyone wants a piece of the world’s most liquid currency. Appetite towards the Greenback should remain supported by the coronavirus pandemic and global recession fears. With caution still in the air, the currency may extend gains ahead of the US jobs report on Friday, which could offer fresh insight into the health of the US labour force.

Commodity spotlight – Gold

Gold is on standby after posting its best week since 2008, as investors await new economic data to access the damage caused by the novel coronavirus outbreak.

The precious metal should remain confined in a narrow $30 range until there is a fresh directional catalyst. Should the Dollar regain its footing on risk aversion and global recession fears, this may hinder Gold’s upside potential. Looking at the technical picture, prices could jump higher towards $1675 if a solid daily close above $1630 is achieved. Alternatively, sustained weakness below $1630 may open the door back towards $1600.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Dollar Crumbles as US Jobless Claims Skyrocket

Nearly 3.3 million Americans applied for unemployment benefits last week which was more than triple the previous record set in 1982 amid the widespread economic shutdown caused by the pandemic. These figures are certainly a shocking reflecting of how badly the coronavirus has hit theeconomy with the pace of layoffs expected to jump as the United States sinks into a recession. Dollar weakness could become a short term theme if economic data continues to paint a gloomy picture, despite the efforts of the Federal Reserve and Senate to promote stability.

Looking at the technical picture, the Dollar Index is under intense pressure on the daily charts with prices trading around 99.90. A solid daily close below this level could open a path towards 99.00.

Commodity spotlight – Gold

Appetite for Gold improved on Thursday after disappointing US economic data weakened the Dollar and fanned fears around the largest economy in the world entering a recession.

The precious metal has appreciated almost 5% since the start of the week and is positioned to extend gains on risk aversion. Technical traders will continue to closely observe how prices behave around $1630. A solid daily close above this point should open a path back towards $1675.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Risk Appetite Returns as Fed Goes Limitless, But For How Long?

Over the last 24 hours, the Federal Reserve dropped an atomic monetary bomb by announcing an open ended unlimited quantitative easing program in an effort to promote stability across financial markets. Although the initial reaction was somewhat mixed with shares on Wall Street closing in the red overnight, investors seem to be taking heart from the Fed’s limitless pledge, as Asian stocks roar back to life this morning and US futures jump. However, this positive market mood is unlikely to last given how the Senate once again failed to move ahead with a $2 trillion US coronavirus stimulus package at the start of the week.

If the global economy is a tin bucket filled with water, the coronavirus outbreak has drilled multiple holes into it and monetary policy bazookas are unable to stop the water from leaking away. While fiscal policies could plug some of the holes, the solution may have to be a new bucket which in this instance is a cure to the coronavirus.

More Pound pain as UK enters lockdown?

Sterling could be set for more weakness after Prime Minister Boris Johnson ordered a three-week lockdown to reduce the spread of the coronavirus. With “non-essential” shops and services being ordered to shut as part of the strict new measures, consumption could be hit, stimulating fears over the United Kingdom entering a recession. The latest flash manufacturing and services PMI data for March will be released later this morning. The Pound may end up offering a muted response to the data as investors focus on the three-week national lockdown and what it means for the economy.

Focusing on the technical outlook, a picture is worth a thousand words and this remains true for GBPUSD which is trading at levels not seen since 1985. Consolidation at the lows points to further downside with the first key level of interest at 1.1400. A breakdown below this level could open the flood gates towards 1.1300 and lower.

Commodity spotlight – Gold

Everyone has wanted a shiny piece of Gold over the last 24 hours, after the Fed took unprecedented measures to defend the US economy from the coronavirus outbreak.

The precious metal has appreciated over 2.7% since the start of the week and has the potential to extend gains on Dollar weakness. A sense of unease over the coronavirus developments and fears around a global recession should support appetite for gold moving forward. Looking at the technical picture, the precious metal has extended gains this morning with prices trading around $1575 as of writing. An intraday breakout above $1580 could swing open the doors towards $1600.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Lukman’s Week Ahead: Market themes to watch out for – Webinar Mar 23

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders.

Enjoy an expert look at:

• The key themes driving the financial markets
• Technical and fundamental trading ideas on the MT4 platform
• How to use the latest FXTM trading signals
• Using fundamental analysis to increase your profit potential
• What to monitor over the coming week

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Dollar Remains King as Pandemic Fears Grip Markets

Fears over a global recession sparked by the coronavirus pandemic are blunting appetite for stock markets with investors rushing to the perceived safety of the Greenback and Japanese Yen. King Dollar has soared against its peers in recent days despite two emergency rate cuts by the Fed with prices hitting multi-year highs above 101.80 on Wednesday. Given how financial markets remain in panic mood and risk-aversion is rife, the Dollar is positioned to extend gains against G10 currencies.

Looking at the technical picture, the Dollar Index is heavily bullish on the four hourly charts. A solid daily close above 101.00 should encourage a move towards fresh multi-year highs above 102.00.

Will the Pound parity dream become reality?

Sterling tumbled to multi-decade lows against the Dollar, falling as much as 4% as the coronavirus outbreak battered financial markets.

On Wednesday, the pound traded below $1.15 against the dollar for the first time since 1985, extending a decline over the past week. With the Dollar expected to dominant the FX arena amid safe-haven flows, the GBPUSD could plunge deeper into the abyss.

Looking at the charts, bears are certainly in control as there have been consistent lower lows and lower highs on the GBPUSD. A daily close under 1.15 may encourage a decline towards 1.14. Should 1.15 prove to be a reliable support, a sharp rebound towards 1.195 could be on the cards.

Another day, another circuit break for S&P 500

The S&P 500 extended its decline on Wednesday, plunging 7% to trigger the level 1 circuit breaker which halted trading on the New York Stock Exchange for 15 minutes.

US equity bears remain in control despite the Federal Reserve launching some bazooka’s and Trump pushing for a $1 trillion stimulus package. It is safe to say that the S&P 500 is bearish with the downside momentum dragging prices back below 2350.

Gold struggles to shine through market panic

It was the same old story with Gold as the precious metal fell over 2.5% despite risk aversion sweeping across financial markets.

Steep losses across the equity space have forced investors to dump assets for cash to cover margin calls. An appreciating Dollar also compounded to Gold’s woes with prices trading below $1500 as of writing. With Gold’s safe-haven status being overlooked amid the market chaos, further losses could be on the cards in the short term.

Commodity spotlight – WTI Oil

Oil is by far one of the biggest casualties from the novel coronavirus outbreak.

WTI Crude and Brent have both depreciated a staggering 60% since the start of 2020 and could extend losses as the pandemic darkens the outlook for fuel demand. To rub salt into the burning wound, the raging price war between Saudi Arabia and Russia is fuelling oversupply concerns. WTI Oil is trading around levels not seen in 17 years below $25 and may test $20 if nothing changes.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Darkening Economic Outlook Grips Global Sentiment

Markets are becoming increasingly concerned that central banks are running out of precious ammunition to counter the coronavirus pandemic, with investors clearly adopting a ‘sell what you can mentality’. No prisoners were taken as Asian, European and US markets experienced gut-wrenching declines amid the explosion of risk aversion. On Wall Street, the S&P 500 collapsed 12%, while the Dow Jones dropped nearly 13% marking its largest single-day point drop in history. Although central banks are bringing out their big bazookas and sparing no ammunition, the focus is shifting to fiscal measures which are seen as sharper tools in the battle to stabilise economic conditions.

In the meantime, global equity bears remain on a mission to sow utter chaos across stock markets as concerns surrounding the coronavirus outbreak reach new heights.

Dollar edges higher ahead of retail sales

The US dollar is consolidating its recent gains over its major peers, despite the Federal Reserve cutting interest rates twice over the past two weeks to near zero.

Investors still consider the Dollar as a prime destination of safety amid the market chaos and this should continue supporting appetite for the currency moving forward. The main risk event for the Greenback will be the latest retail sales figures for February which should provide some clues on the health of the US consumer before the coronavirus outbreak rattled the global economy. The Dollar will most likely offer a muted response to the economic data as investors direct their attention towards fiscal policy responses to the coronavirus outbreak.

Commodity spotlight – Gold

One would have expected Gold to shine through the coronavirus-induced market chaos. However, the complete opposite has been seen with bullion down five straight days and prices fell another 4% yesterday, despite the wave of risk aversion sweeping through markets. Investors have clearly entered the trading week adopting a ‘sell what you can mentality’ to cover steep losses in stocks, throwing Gold directly into the firing line. With the precious metal heavily influenced by global equities, further losses will most likely be on the cards as stock markets plunge deeper into the abyss.

Regarding the technical picture, the precious metal is bearish on the daily chart. A solid breakdown below $1480 could open a path towards $1450 and $1435, a level not seen since mid-2019.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Market Sentiment Improves As Investors Pin Hopes on G7 Action

Shares in Asia pushed higher on Tuesday following the overnight rally on Wall Street thanks to stimulus hopes, and this positivity is likely to roll-over into European markets ahead of a conference call today by G7 finance ministers at midday GMT. Investors remain hopeful that G7 countries will join hands to battle the COVID-19 outbreak by enforcing a wave of fiscal measures. However, questions are still being raised as to whether central banks have enough ammunition in their policy toolkits to counter the negative impacts of the outbreak. Let’s not forget the coronavirus is a health crisis that causes major supply-side shocks, so looser monetary policy may have minimal impact in solving the matter at hand.

Dollar humbled by Fed rate cut bets

The mighty Dollar has not been so mighty over the past few days, amid speculation around the Federal Reserve cutting interest rates as soon as its meeting on March 18.

While the Greenback is still considered as a safe-haven destination, investors may be coming to terms with the fact that the US economy is not bullet proof from the virus outbreak and this presents negative risks going forward. Signs of the outbreak impacting economic growth in the States may question the Dollar’s safe-haven status and fuel speculation around the Fed cutting interest rates further, beyond March.

Rocky path ahead for Sterling

After three years of dramatic and chaotic negotiations on the UK’s exit from the European Union, post-Brexit trade talks officially kicked off yesterday.

It looks like both sides have entered the talks adopting a hard-line stance, with Boris Johnson threatening to walk away if negotiations fail to progress by June. Pound sensitivity to Brexit headlines is set to intensify this week and for the rest of the first quarter, as investors evaluate whether a hard Brexit will become reality by the end of 2020.

Focusing on the technical picture, GBPUSD is under pressure on the daily charts. A breakdown below 1.2750 may inspire a decline towards 1.2650. Alternatively, an intraday breakout above 1.2830 could trigger a move towards 1.3000.

Commodity spotlight – Gold

Gold regained some of its lustre on Tuesday, rising roughly 0.5% after experiencing its worst single-day decline since 2013, last Friday.

Although the technical picture suggests that Gold could extend losses, the fundamentals remain in favour of the bulls. Concerns over slowing global growth remain rife amid the coronavirus outbreak, especially after the Organisation for Economic Co-operation and Development (OECD) downgraded its 2020 global growth forecast from 2.9% to 2.4%. The general unease and speculation around loose monetary policy should support appetite for Gold, especially amid the potential for a weaker dollar.

Focusing on the technical picture, Gold is under pressure on the daily charts with prices trading around $1598 as of writing. Sustained weakness below $1600 may encourage a decline back towards $1579 in the near term. Alternatively, a breakout above $1600 could open the doors towards $1620.


Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Markets Struggle to Stabilise After Brutal Global Stock Market Sell-Off

Equities in Asia and Europe flashed bright red, while Wall Street collapsed like a house of cards with the Dow Jones tumbling more than 1000 points, its third worst point drop in history. The coronavirus outbreak is certainly fuelling panic across financial markets, with negative sentiment being reflected in a surge in risk aversion, and an explosion in demand for safe haven instruments like Gold, the Japanese Yen and King Dollar.

The mood is slightly better this morning with US and European stock futures rising, but caution still lingers in the air. Asian stocks are struggling to nurse the heavy wounds inflicted from yesterday’s brutal sell-off and this negativity could impact European markets. Speculation around central banks coming to the rescue with a burst of new stimulus may cushion downside losses and rekindle appetite for riskier assets. However, with the coronavirus infecting over 80,000 people and spreading through populations far from its origin in China, uncertainty still remains a dominant theme with markets on high alert.

Dollar softens on rising rate cut expectations

Elsewhere, the Dollar slightly weakened against a basket of major currencies on Tuesday as coronavirus fears fuelled speculation around the Federal Reserve cutting interest rates.

According to the CME’s Fed Watch tool, there is a 45% probability of a US interest rate cut by April and investors are pricing in nearly three cuts over the next 12 months. The prospects of lower interest rates could impact buying sentiment towards the Dollar, despite it’s safe-haven status.

Investors will direct their attention towards the Conference Board consumer confidence report scheduled for release later in the day. A report that meets or exceed expectations could provide a boost to the Greenback which has appreciated against every G10 currency month-to-date.

Focusing on the technical picture, the Dollar Index is trading around 99.24 as of writing. A breakdown below 99.00 could encourage a decline back towards 98.70. However, if 99.00 proves to be reliable support, prices could rebound back towards 99.50.

Commodity spotlight – Gold

Gold weakened this morning after exploding to a fresh 7-year high above $1685 in the previous session, as coronavirus fears sent investors rushing to safe-haven assets.

Nevertheless, the precious metal is heavily bullish on the daily charts as there have been consistently higher highs and higher lows. A solid daily close above $1660 should seal the deal for a move towards the psychological $1700 level. If Gold bulls run of steam and prices remain below $1660, the next level of support will be around $1620.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Market Mood Sours After Apple’s Profit Warning

This stark warning has quelled investor optimism over monetary policy easing from China and other major central banks, shielding the global economy from the detrimental impact of the virus outbreak. Asian shares are poised to close on a negative note amid the risk-off mood, with caution likely to hit European shares later this morning. With coronavirus fears back on the table, this could be a rough day for global stocks as investors offload riskier assets in favour of safe-haven assets like the Dollar and Gold.

More pain in store for the Euro?

The Euro wallowed near 3-year lows on Tuesday as concerns over weakening growth in the region and fears around the coronavirus impact on the Eurozone economy haunted investor attraction towards the currency.

Appetite for the Euro could deteriorate further if a German business sentiment indicator paints a gloomy picture of the eurozone’s biggest economy. The ZEW Indicator of Economic Sentiment released today will be one of the first indicators showing the potential hit to the European economy from the virus, and is projected to slip to 22.0 in February from 25.6 seen in January. A report that prints below market expectations may weaken the Euro, which has already shed over 2.3% against the Dollar this month.

Focusing on the technical picture, EURUSD is heavily bearish on the daily charts with prices trading around 1.0835 as of writing. Sustained weakness below 1.0879 should encourage a further decline towards the 1.0800 support level. A breakdown below this point could open doors to levels not seen since mid-April 2017 at 1.0730.

Time for Gold to shine towards $1600?

Gold entered Tuesday’s trading session with a slight spring in its step after Apple’s sales warning rekindled fears around the coronavirus outbreak and the negative impacts it may have on the global economy.

The precious metal has gained over 4.5% year-to-date, and could push higher this quarter amid renewed global growth concerns and speculation around looser monetary policy. Focusing on the technical picture, Gold has the potential for further upside this week if $1579 proves to be reliable support. An intraday breakout above $1589 may trigger a move towards $1600. Alternatively, a breakdown below $1579 could encourage a move back towards $1555.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Pendulum Swings in Favour of Risk as New Coronavirus Cases Appear to Slow

There seems to be a growing sense of optimism and hope that the worst of the coronavirus in China may have passed, amid the slowing rate of new cases. However, there remains a thick cloud of uncertainty over how badly the outbreak has impacted China, Asia and the global economy. With the death toll from the virus topping one thousand with 42,000 confirmed cases, investors are likely to remain wary and cautious despite the apparent “risk-on” mood. The positive vibe from Asian markets may support European shares this morning and potentially trickle back down to Wall Street which closed at fresh record highs overnight.

Dollar takes a breather, but bulls still remain in control

The mighty Dollar retreated from a 2020 high on Tuesday after the Federal Reserve Chairman, Jerome Powell indicated that US interest rates would be left unchanged.

Appetite for the Greenback should remain stimulated by optimism over the US economy, speculation around the Federal Reserve leaving interest rates unchanged and safe-haven demand. Powell was fairly optimistic over the outlook for the US economy in his update to the Senate Banking Committee on Tuesday and may mirror a similar tone on Wednesday. With uncertainty over the virus still a major theme and the ramifications it may have on the global economy lingering in the air, the Dollar is likely to push higher. Focusing on the technical picture, the Dollar Index is bullish on the daily charts with prices trading around 98.83 as of writing. A solid daily close above 99.00 should open the doors towards 99.50.

Oil sensitive to demand side concerns

Oil jumped over 1.5% on Wednesday amid early signs that new coronavirus cases were slowing in China. This development has eased concerns over the negative demand impact from the outbreak in the world’s largest energy consumer. However, Oil markets are certainly not out of the woods yet with further downside on the cards if economic growth in China ends up decelerating in Q1. On the supply side of the equation, OPEC+ recommended a further cut of 600,000 bpd last week in an effort to limit the painful decline in Oil prices, but Russia has been reluctant to commit to deeper cuts. We suspect the next few months are going to be volatile for Oil, with the path of least resistance pointing south.

While WTI Crude could rebound towards $52 and beyond in the short to medium term, the resistance around $54 may put an end to the bull’s party. A breakdown back below $50 should open the doors towards $48.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Lukman’s Week Ahead: Market themes to watch out for – Webinar Feb 10

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders. Enjoy an expert look at:

• The key themes driving the financial markets

• Technical and fundamental trading ideas on the MT4 platform

• How to use the latest FXTM trading signals

• Using fundamental analysis to increase your profit potential

• What to monitor over the coming week

REGISTER FOR FREE

  • Log in or register
  • Click ‘Join Now’ on your chosen Webinar
  • Check your inbox for the webinar link

Lukman Otunuga has been a Research Analyst at FXTM since 2015. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in fundamental and technical analysis. His in-depth analysis on global currency and commodity markets is often cited by leading international media, including the Associated Press (AP), BBC, CNBC, CNN, Marketwatch, NASDAQ, and The Telegraph. He has also appeared on Africa’s biggest television network, NTA 2. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance.

Apple’s Earnings Under The Radar: Tesla Shares on Standby

The tech giant’s domineering presence has certainly influenced different geographies ultimately becoming an important part of many people’s lives. While the outlook for Apple looks highly encouraging with the company shares gaining more than 6% since the start of the year, it remains uncertain whether first-quarter earnings will paint a similar picture.

Revenue is projected to come in at $88.5 billion, topping $84.3 billion in revenue during the same period a year earlier. Earnings are seen rising to $4.54 per share, compared to the $4.18 per share earned in the same period last year.

The argument for earnings to smash market forecasts revolve around bullish expectations for new iPhones, rising AirPod demand and growing momentum in Apple’s digital services. However, the coronavirus outbreak in China could throw a proverbial wrench into the works, especially if it results in supply chain disruptions and drop in demand.

Taking a look at the technical picture, Apple shares are heavily bullish on the daily charts. There have been consistently higher highs and higher lows with prices roughly $10 away from the all-time high of $323. If the company’s earnings dish out an upside surprise, shares are likely to push higher with $323 acting as the first point of interest. A breakout above this all-time high may open the doors towards $350.

Alternatively, a disappointing set of earnings will most likely dent buying sentiment towards Amazon stock with prices seen dipping back towards $305.

It’s earnings time for Tesla

Tesla Inc. stock is slated to remain on standby as investors await the company’s Q4 and full-year results on Wednesday.

Market optimism over the company’s performance, strong international growth and profitability supported buying sentiment towards Tesla shares. While the future looks bright for the automotive and energy company, this needs to be reflected in earnings and revenues.

Wall Street expects Tesla to report a $1.62 per share gain for Q4 2019 while total revenues are forecast to hit $7 billion in the fourth quarter of 2019 compared to the $6.3 billion in the third quarter.

The technical picture remains in favour of bulls with prices trading roughly $30 away from the all-time high of $594.50 as of writing. A strong set of earnings could turbocharge Tesla shares with the first point of interest at $594.50 and potentially higher. Should the earnings disappoint, shares could sink back towards $538.50.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Coronavirus Outbreak Revives Global Economic Fears

A wave of risk aversion is flooding financial markets with Asian shares flashing red on Tuesday as concerns over the economic cost of China’s coronavirus drain investor confidence. It remains unclear how much the virus has disrupted consumer spending and business confidence in China. However, the tourism sector remains directly in the firing line. We expect the negative sentiment from Asia to spread to European markets this morning and possibly trickle down to Wall Street later in the day. Rising fears around the virus spreading further is forcing market players to distance themselves from riskier assets with destinations like the Dollar, Japanese Yen and Gold becoming increasingly better bid.

US consumer confidence in focus

Elsewhere, the Dollar held steady against a basket of major currencies on Tuesday ahead of the Conference Board consumer confidence report scheduled for release later in the day.

King Dollar is in a position of strength and remains attractive to investors based on the improving US economic outlook and its safe-haven status. Buying sentiment towards the Greenback should jump if the confidence data meets or exceeds market expectations. Focusing on the technical picture, the Dollar Index is trading around 98.00 as of writing, just above the 100-day moving average. Upside momentum may open a path towards 98.50 in the short term.

Oil plunges deeper into the abyss on virus fears

Oil prices were treated without mercy on Monday, tumbling more than 3% to hit levels not seen in three months as concerns jumped over China’s coronavirus outbreak reducing demand for fuel.

Although the commodity is attempting to stabilise on Tuesday, the path of least resistance points south as long as the virus concerns remain a dominant theme. China is the world’s second largest oil consumer, so a slowdown in demand has the potential to disrupt oil markets in the medium to longer term.

The technical picture paints a heavily bearish setup for WTI Oil with prices trading around $53.15 as of writing. A solid daily close below $52.00 may open the doors towards $51.00 and $49.50.

Commodity spotlight – Gold

Gold has entered the week with an attractive glow thanks to the market caution.

Investors are seen avoiding riskier assets with safe-haven assets like Gold becoming popular destinations as virus fears intensify. The precious metal could challenge $1600 this week as uncertainty remains a major theme. A solid daily close above $1580 should encourage a move towards $1589 and $1600, respectively. Alternatively, if $1580 proves to be unreliable support, prices could journey back towards $1555.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Lukman’s Week Ahead: Market themes to watch out for – Webinar Jan 27

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders. Enjoy an expert look at:

• The key themes driving the financial markets

• Technical and fundamental trading ideas on the MT4 platform

• How to use the latest FXTM trading signals

• Using fundamental analysis to increase your profit potential

• What to monitor over the coming week

REGISTER FOR FREE

  • Log in or register
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Lukman Otunuga has been a Research Analyst at FXTM since 2015. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in fundamental and technical analysis. His in-depth analysis on global currency and commodity markets is often cited by leading international media, including the Associated Press (AP), BBC, CNBC, CNN, Marketwatch, NASDAQ, and The Telegraph. He has also appeared on Africa’s biggest television network, NTA 2. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance.

Market Caution Returns Ahead of Davos Summit

  • Asian shares slip on China coronavirus concerns
  • Annual World Economic Forum in Davos in focus
  • Macron and Trump call truce in digital tax dispute
  • Gold gains as safe-haven interest rises

This unfavourable development could not come at a more critical time with many people expected to travel within China before the Lunar new year. The outbreak certainly presents an economic risk to China and its close neighbours, especially if tourism, air travel and other industries are affected.

Caution from Asia should hit European markets ahead of the World Economic Forum (WEF) in Davos, Switzerland. Business leaders, financial heavyweights and politicians from across the globe will discuss key issues revolving around climate change and sustainable business. There could be some movement across stock markets if global trade developments and geopolitical risks are discussed during the summit.

Euro steady after Trump-Macron truce

In other news, the Euro held steady against the Dollar after France announced an agreement with the United States on a truce in their digital tax dispute.

With the accord lasting until the end of 2020, this is a welcome development for the Eurozone as tensions ease between both sides. In regards to the technical picture, the EURUSD is trading around 1.1095 as of writing. A breakout above 1.1100 may open the doors towards 1.1170. Alternatively, a move back below 1.1080 could trigger a decline towards 1.1040.

Commodity spotlight – Gold

Gold is set to remain the prime destination for safe haven buyers this week as developments in China and caution ahead of the Davos summit dent risk sentiment. The precious metal is trading around $1566 as of writing and could challenge $1580 if risk aversion intensifies. A solid breakout above here will most likely open the doors back towards $1600.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Is Netflix’s Crown Under Threat From Rival Streaming Giants?

As the streaming wars kick into higher gear in 2020, Netflix’s latest earning should offer a taster of how the giant is faring against competitors like Disney+, Apple and Amazon. Investors seem optimistic over the company’s prospects despite the growing competition, and this positivity continues to be reflected in Netflix stocks. Shares have already jumped almost 5% since the start of the year and appreciated 20% since the launch of Disney+ in November 2019. However, it remains uncertain whether the profits in Q4 will mirror the encouraging gains witnessed in stocks over the past few months.

The fourth-quarter results will be interesting, because it will offer some insight into how the company’s subscriber’s number have been impacted by the launch of rivals Disney + and Apple TV +. Netflix expects revenues to grow 30% to $5.4 billion while earnings are projected to surge over 65% to reach $0.52 per share. If Netflix can attract more subscribers to its existing legion of 160 million across the globe, this may push stock prices higher and the streaming giant will maintain its status as market leader.

At the end of the day, everyone wants the crown but there could be only one King. Will 2020 see Netflix dethroned as new champions emerge from the fierce competition?

Netflix is trading around $339 as of writing. News that a number of classic studio Ghibli films will finally be available on Netflix from February onwards should boost buying sentiment towards the stock. A technical close and daily close above $345 could open the doors towards $360 and possibly $370 in the medium-term. Should earnings disappoint, Netflix stock could sink back towards the $320 level.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

2020 Market Outlook: Trading Opportunities in Q1 – Webinar Jan 23

Join for a free and interactive webinar on trading opportunities in Q1 2020! This valuable and interactive session examines the global economy’s prospects in detail, and highlights key topics and risks to watch out for in the months ahead across major currencies, commodities, and selected stocks. Packed with detailed insights from our experienced team of dedicated market analysts, this webinar will give you all the knowledge you need to plan your next move. Don’t miss out, sign up today to learn from the comfort of your own home!

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Lukman Otunuga has been a Research Analyst at FXTM since 2015. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in fundamental and technical analysis. His in-depth analysis on global currency and commodity markets is often cited by leading international media, including the Associated Press (AP), BBC, CNBC, CNN, Marketwatch, NASDAQ, and The Telegraph. He has also appeared on Africa’s biggest television network, NTA 2. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance.

Jameel Ahmad is the Global Head of Currency Strategy and Market Research at FXTM. Since joining the company in 2014, he has played a key role in building the international profile of FXTM across Europe, the Middle East, Africa and Asia through media tours, broadcast interviews and seminars.
Specialising in financial market developments, with a particular emphasis on global currencies, commodities and emerging markets, Jameel is frequently featured in leading media outlets, including the Financial Times, Wall Street Journal, Forbes, Sky News, and Reuters. He is also a highly sought broadcast commentator, and can be seen regularly on Al-Jazeera, BBC, Bloomberg, CGTN, CNBC and Sky News.

Jameel holds a BA (Hons) degree in Business Studies with Accountancy & Finance from the University of the West of England. More recently, he completed an executive education course in Unconventional Monetary Policy at the Barcelona Graduate School of Economics

Earnings Season Kicks oOff, JP Morgan Smashes Estimates

One would have expected lower US interest rates to impact profitability in the banking sector, as banks benefit from higher interest rates to charge more on loans. However, JP Morgan Chose posted profit and revenue that crushed analyst estimates. Fourth-quarter profit rose 21% to $8.52 billion while revenue climbed 9% to $29.2 billion compared with the $27.94 billion estimate.

Share of JP Morgan jumped over 1% as investors cheered the robust earnings with prices trading around $139.64 as of writing. The upside momentum could pave a way towards the all-time high of 141.10. A breakout above this level should open the doors towards $143.00.

Citigroup joins the party of outperformers

Citigroup shares jumped roughly 1% after the bank reported fourth-quarter earnings that beat profit and revenue expectations.

The bank posted a whopping 49% gain to fixed-income trading revenue, more than double the forecasted jump according to Bloomberg estimates. Fourth quarter revenues were $18.4 billion versus the $17.85 billion estimate while profits rose by 15% to $4.98 billion.

Focusing on the companies shares, prices are trading around $82.12 as of writing. A breakout above $82.50 should encourage a move higher towards $83.50 – levels not seen since the financial crisis.

Wells Fargo experiences painful Q4

It was not all roses and butterflies with Wells Fargo as the bank reported disappointing fourth-quarter profits and revenues.

Persistently low-interest rates and legal fees eroded earnings with quarterly profit reaching $2.87 billion, versus $6.06 billion a year earlier – representing a 53% decline. Wells Fargo shares tumbled as much as 3% on this report with prices trading around $50 as of writing.
Stocks are seen sinking lower if a daily close below $49.70 is achieved.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Trade Deal Hopes Lift risk Mood, Gold Loses Lustre

  • Risk appetite boosted by trade deal optimism
  • Washington lifts China ‘currency manipulator’ tag
  • US inflation data in focus
  • Gold slips as risk-on sentiment bites

The US Treasury Department is expected to remove the designation of China as a ‘currency manipulator’ signaling a further easing in tensions, as both sides move one step closer to finding a middle ground on trade. This encouraging news has certainly injected global equity bulls with confidence as shares in Asia rallied on Tuesday morning. The positive sentiment was also reflected on Wall Street which logged record highs overnight, driven by sharp rises in tech stocks. While the signing of the “phase one” trade deal should continue supporting risk sentiment, investors could still be left empty handed if any of the finer details disappoint expectations.

In other news, the corporate earnings season kicks off with some of the biggest US banks including JP Morgan, Wells Fargo and Citigroup under the spotlight, as they report quarterly earnings before the US opening bell. Stocks could extend gains if earnings from these major banks meet or exceed market expectations.

Dollar on standby ahead of US inflation

It could be an eventful trading week for the Dollar with the latest inflation data on Tuesday and retail sales figures on Thursday offering insight into the health of the US economy. The annual core inflation rate during the last month of 2019 is expected to remain broadly in line with the Fed’s 2% target, reinforcing the view that the Federal Reserve is taking a pause on further interest rate moves.

The Dollar’s valuation is likely to remain influenced by trade developments and global sentiment this week. Should the risk-on environment remain the name of the game, appetite towards the Dollar is set to fade as investors turn to riskier assets. Focusing on the technical picture, the Dollar Index may slip towards 97.00 should 97.50 prove to be a stubborn resistance level.

Gold hammered by risk-on sentiment

Gold prices stumbled to their lowest level in nearly two weeks on Tuesday as trade hopes boosted risk sentiment and blunted appetite for safe-haven assets. The precious metal is trading around $1539 as of writing and could extend losses when the United States and China formally sign the “phase one” trade deal. However, the precious metal may rebound if the finer details of the deal underwhelm markets.

Technical traders will continue to closely observe how prices behave around the $1555 level. A daily close below this point should signal a decline towards $1535. However, a move above $1555 may open the doors towards $1570.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.