U.S. Stocks Set To Open Higher As Oracle Earnings Provide Support To Tech Shares

Oracle Easily Beats Analyst Estimates

S&P 500 futures look ready to rebound after yesterday’s sell-off as investor mood is lifted by better-than-expected earnings from Oracle.

The company benefited from increased usage of its cloud services and beat analyst expectations, reporting revenue of $9.37 billion and GAAP earnings of $0.72 per share.

This performance provided support to leading tech stocks like Apple or Facebook which had a tough session yesterday but are gaining ground in today’s premarket trading.

Tech stocks’ trading dynamics are very important for S&P 500 due to their huge market capitalization so a rebound in the tech space will provide significant support to the market.

Brexit Drama Continues

Brexit is set to be a major source of uncertainty for the world markets in the upcoming weeks. UK has announced its plans to modify the existing Brexit Withdrawal Agreement and break the international law, while EU demanded that UK abandoned such plans.

Both sides are increasing their preparations for a no-deal Brexit which may send shock waves across the world markets.

The British pound continues to fall but it looks like all risks are not yet priced in the current GBP/USD exchange rate.

A continuation of the existing trend will provide additional support for the U.S. dollar, and the U.S. Dollar Index will have a chance to settle above the nearest resistance at 93.50. Stronger dollar may serve as an additional bearish catalyst for U.S. stocks.

Prices Rise Faster Than Expected

U.S. has just provided inflation data for August. Core Inflation Rate increased by 1.7% on a year-over-year basis compared to analyst consensus of 1.6%. On a month-over-month basis, Core Inflation Rate grew by 0.4% while the analyst consensus called for growth of just 0.2%.

Inflation Rate grew by 1.3% year-over-year while analysts expected growth of 1.2%. Month-over-month, Inflation Rate increased by 0.4% compared to analyst consensus of 0.3%.

Strong inflation will likely provide more support to the U.S. dollar and may put some pressure on stocks.

The U.S. Fed has recently adopted an average inflation target of 2% which will allow it to keep rates low even if inflation rises above 2%.

If inflation reaches the 2% level faster than expected, markets will start to price in the probability of a rate hike, which may serve as a significant bearish catalyst for stocks.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Daily Forecast – U.S. Dollar Continues Its Attempts To Get Above The 50 EMA

USD/JPY Video 11.09.20.

Range-Bound Trading Continues

USD/JPY remains in a very tight range between the support at the 20 EMA at 106.10 and the resistance at the 50 EMA at 106.25 as the U.S. dollar is mostly flat against a broad basket of currencies.

Yesterday, the U.S. Dollar Index found itself under significant pressure after the release of disappointing U.S. Initial Jobless Claims and Continuing Jobless Claims reports.

However, it managed to find support at 92.70 and rebounded back above the 93 level. Currently, the U.S. Dollar Index is trying to stay above the 20 EMA at 93.10. If this attempt is successful, the U.S. Dollar Index will gain more upside momentum which will be bullish for USD/JPY.

While the recent employment reports indicated that the U.S. economic recovery may have encountered its first material problems, the situation in Japan’s economy is not looking better.

A recent survey indicated that Japanese companies planned to cut their capital expenditure by as much as 6.8% in the current fiscal year. Obviously, economic recovery cannot be robust without a healthy increase in capital spending.

Today, traders will focus on the upcoming U.S. inflation reports. Core Inflation Rate is expected to stay unchanged at 1.6% while Inflation Rate is projected to increase from 1% to 1.2% on a year-over-year basis.

Technical Analysis

usd jpy september 11 2020

USD/JPY is still trading in the range between the 20 EMA and the 50 EMA. In case USD/JPY manages to settle above the 50 EMA, it will head towards the next material resistance level at 107.00. Along the way, USD/JPY may face some resistance at 106.55.

On the support side, a move below the 20 EMA will open the way to the test of the next significant support level at 105.30. USD/JPY may also get some support near the recent lows at 105.80.

From a big picture point of view, USD/JPY remains stuck in a very tight trading range. Most likely, USD/JPY will need additional catalysts to get out of the range and develop some momentum. While a move out of this range may be fast, near-term perspectives of USD/JPY will be still limited by very strong levels at 105.30 and 107.00.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Support At 1.1830 Stays Strong

EUR/USD Video 11.09.20.

Euro Tries To Continue Its Upside Move

EUR/USD is currently trying to stay above the nearest support at the 20 EMA at 1.1830 as the U.S. dollar remains mostly flat against a broad basket of currencies.

Yesterday, the European Central Bank made a decision to leave its interest rate unchanged. ECB promised to continue purchases under its pandemic emergency purchase programme (PEPP) and also stated that it would keep rates at current or lower levels until inflation gets closer to 2%.

However, ECB did not adopt an average inflation target of 2%. In addition, ECB commented that while it was looking at the exchange rate, there was no specific target for the euro. These comments sent the euro higher, and EUR/USD tested the resistance at 1.1910.

Euro Area inflation is currently in the negative territory, and there is plenty of work to do in order to bring it back to at least 1%. In this light, Euro Area interest rates may stay low for many years, just like the U.S. interest rates.

It remains to be seen whether traders will continue to bet on the rise of the euro in this situation. The leading world central banks are set to keep their interest rates at rock bottom for a long time so traders’ focus may ultimately shift to economic data.

Technical Analysis

eur usd september 11 2020

EUR/USD is trying to gain more upside momentum above the 20 EMA at 1.1830. If this attempt is successful, EUR/USD will head towards the test of the next resistance level at 1.1910.

A move above the resistance at 1.1910 will open the way to the test of the next resistance at 1.1965. If EUR/USD gets above 1.1965, it will head towards September highs at 1.2000.

On the support side, the nearest support level for EUR/USD is located at the 20 EMA at 1.1830. If EUR/USD manages to settle below this level, it will head towards the next support at 1.1765. This support level has been tested several trading sessions ago and proved its strength.

A move below the support at 1.1765 will provide EUR/USD with a chance to test the next support at the 50 EMA at 1.1730.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – British Pound Tries To Stabilize After Major Sell-Off

GBP/USD Video 11.09.20.

Fears Of Hard Brexit Continue To Put Pressure On British Pound

GBP/USD is trying to stabilize near 1.2800 after yesterday’s major sell-off which was caused by fears of disorderly Brexit.

Previously, UK decided to make changes to Brexit Withdrawal Agreement that would break the international law “in a limited way”.

EU took a firm stance and told Britain that it should abandon its plans to break the treaty that was signed less than one year ago.

In addition, EU signaled that breaking the Brexit Withdrawal Agreement will lead to a no-deal Brexit.

UK insisted that it was still commited to the agreement but needed to clarify certain points with the main focus on preserving the 1998 Northern Irish peace deal.

Both sides have clearly stepped up their preparations for a hard Brexit, and financial markets have started to price in this scenario.

Meanwhile, UK has just provided Industrial Production and Manufacturing Production reports for July. Industrial Production increased by 5.2% on a month-over-month basis compared to analyst consensus which called for growth of 4%. On a year-over-year basis, Industrial Production declined by 7.8%.

Manufacturing Production increased by 6.3% month-over-month but remained under pressure on a year-over-year basis, falling by 9.4%.

While the economic data was better than analyst expectations, it may have little impact on GBP/USD as traders are preoccupied with the twists of the Brexit story.

Technical Analysis

gbp usd september 11 2020

 

GBP/USD is currently trying to gain some upside momentum after a serious sell-off. This sell-off was very fast so there are significant gaps between levels.

The nearest resistance level for GBP/USD is located at 1.2880. In case GBP/USD manages to settle below this level, it will head towards the next resistance at 1.2980. A move above this resistance will open the way to the test of the next resistance level at 1.3020.

On the support side, the nearest support level for GBP/USD is located at the recent lows at 1.2775. If GBP/USD moves below this level, it will decline towards the next support at 1.2750. In case GBP/USD does not receive enough support at 1.2750, the road to the next support at 1.2650 will be open.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – Canadian Dollar Loses Some Ground After Yesterday’s Move

USD/CAD Video 10.09.20.

U.S. Dollar Tries To Gain More Ground Against The Canadian Dollar Despite Weak U.S. Employment Reports

USD/CAD is trying to stay above the 20 EMA at 1.3155 as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. dollar found itself under material pressure after the release of disappointing U.S. Initial Jobless Claims and Continuing Jobless Claims reports.

The reports indicated that the U.S. job market recovery faced certain problems as Initial Jobless Claims remained flat at 884,000 while Continuing Jobless Claims increased from 13.29 million to 13.39 million.

The general pressure on the American currency could have been more significant but Brexit-related problems of the British pound provided some support to U.S. Dollar Index.

Today, the U.S. Dollar Index declined to 92.70 but managed to rebound back above 93. In case the U.S. Dollar Index manages to stay above the 93 level, it will have good chances to gain more upside momentum which would be bullish for USD/CAD.

Meanwhile, WTI oil failed to gain more upside momentum which was a negative development for the Canadian dollar.

Tomorrow, U.S. will provide Core Inflation Rate and Inflation Rate reports for August. Analysts expect that Inflation Rate will increase by 1.2% on a year-over-year basis while Core Inflation Rate will grow by 1.6%.

Technical Analysis

usd cad september 10 2020

USD to CAD failed to settle below the nearest support level at 1.3135 and is trying to gain more upside momentum above the 20 EMA at 1.3155.

In case this attempt is successful, USD to CAD will head towards the next material resistance level at 1.3235. There are no material levels between the 20 EMA at 1.3155 and the resistance at 1.3235 so this move may be fast.

In case USD to CAD manages to get above the resistance at 1.3235, it will head towards the next resistance level at the 50 EMA at 1.3265.

On the support side, USD to CAD needs to settle below the support at 1.3135 to gain more downside momentum. If this happens, USD to CAD will head towards the next support level at 1.3050.

For a look at all of today’s economic events, check out our economic calendar.

Oil Lost Momentum And Failed To Settle Above $38

Oil Video 10.09.20.

Oil Finds Itself Under Pressure As Crude Inventories Increased

Yesterday’s API Crude Oil Stock Change report indicated that U.S. crude inventories increased by 2.97 million barrels. Meanwhile, gasoline inventories declined by 6.89 million barrels and distillate fuel inventories increased by 2.29 million barrels.

The increase in crude inventories is a negative development for the oil market, although it has to be confirmed by EIA Weekly Petroleum Status Report.

The U.S. driving season has come to an end so traders have a reason to fear that demand for gasoline will decrease.

In addition, the most recent U.S. Initial Jobless Claims and Continuing Jobless Claims reports indicated that the U.S. job market recovery had likely stalled. The continuation of gasoline demand recovery without a strong recovery in the job market will likely be impossible.

Not surprisingly, API Crude Oil Stock Change report put material pressure on oil prices. Interestingly, the recent strong downside move of the U.S. dollar did not help oil gain more ground as demand concerns prevailed.

European Countries Start Thinking About Additional Virus Containment Measures

The reopening of the economy in Europe is not going as well as planned from a healthcare point of view. In some countries, the number of new coronavirus cases has significantly increased.

Yesterday, Spain recorded 8,866 new cases while France recorded 8,577 new cases. Only India, USA, Brazil and Argentina had more cases than Spain and France.

According to a Reuters report, the French government is considering local lockdowns to fight the spread of the virus. While some would argue that local lockdowns will do much less damage than national lockdowns, such lockdowns are most likely to happen in densely populated areas which are often the most developed ones.

If France, or any other developed country, chooses the route of local lockdowns, the oil market will take a double hit. First, the demand for oil will be directly impacted by lockdowns. Second, traders will fear that other countries will follow suit.

Recently, AstraZeneca had to pause its COVID-19 vaccine trials due to unexplained illness of one of the participants, highligting the complexity of vaccine development process.

Without a vaccine, the oil market will have to exist under constant pressure from alarming virus news. Most likely, oil will need an additional decline in inventory levels to get back to recent highs in this environment.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Weak U.S. Dollar Pushed Silver Above $27.00

Silver Video 10.09.20.

Silver Gained Upside Momentum After The Release Of U.S. Employment Reports

Silver managed to settle above the 20 EMA at $26.80 and is trying to get to the test of the next resistance level at $27.75 as the U.S. dollar is under serious pressure after the release of disappointing U.S. employment reports.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has developed material downside momentum and declined below the 20 EMA at 93.05.

U.S. Initial Jobless Claims and Continuing Jobless Claims reports were worse than analyst expectations and indicated that the labor market recovery had stalled.

Weak U.S. dollar is bullish for silver as it makes silver cheaper for buyers who have other currencies. If the U.S. Dollar Index declines towards the next support level at 92.50, silver will have good chances to get above the nearest resistance level at $27.75.

Not surprisingly, gold has also benefited from U.S. dollar weakness. Currently, gold managed to settle above the $1950 level and is moving towards the psychologically important $2000 level. If gold gets above the $2000 level, the whole precious metal segment will likely get a material boost.

Gold/silver ratio continues to stay in a range between 71 and 73. The recent attempt to get above the 20 EMA at 72.80 was not successful, and gold/silver ratio maintains solid chances to develop more downside momentum which would be bullish for silver.

Technical Analysis

silver september 10 2020

Silver is currently trying to gain more upside momentum above $27.00. If this attempt is successful, silver will head towards the test of the next resistance level at $27.75.

A move above the resistance at $27.75 will open the way to the test of the next resistance level at $28.50. In case silver is able to get above $28.50, it will move towards the next resistance at the recent highs at $28.90.

On the support side, the nearest support for silver is located at the 20 EMA at $26.80. If silver manages to settle below the 20 EMA, it will gain more downside momentum and head towards the next support level at the recent lows at $25.85.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Stocks Mixed As Continuing Jobless Claims Unexpetedly Increased

Initial Jobless Claims Remain Unchanged At 884,000

U.S. has just provided new Initial Jobless Claims and Continuing Jobless Claims reports.

Initial Jobless Claims report indicated that 884,000 Americans filed for unemployment benefits in one week. The previous report was revised from 881,000 to 884,000, so Initial Jobless Claims were completely unchanged compared to the previous week’s level.

Meanwhile, Continuing Jobless Claims increased from 13.29 million (a revision from 13.25 million) to 13.39 million, compared to analyst consensus of 12.93 million.

Employment reports were clearly worse than analyst expectations, and S&P 500 futures dipped into the negative territory in premarket trading but remained little changed.

U.S. Republicans Propose Coronavirus Aid Package Worth $300 Billion

Coronavirus aid package negotiatons come back into spotlight as U.S. Senate is set to vote on Republicans’ proposal worth $300 billion. This proposal is significantly smaller than the previous Republican plan to provide $1 trillion in aid.

It is also dramatically smaller than the Democrats’ plan to offer more than $3 trillion in aid. While Democrats have previously offered to cut their coronavirus aid package plan to about $2.2 billion, Republicans did not show any desire to materially increase their own proposal.

The U.S. economy needs additional stimulus to support consumer activity so there is a clear need for the next aid package. However, it remains to be seen whether Democrats and Republicans will be able to reach consensus on the new aid bill proposed by Republicans.

European Central Bank Leaves The Interest Rate Unchanged At 0%

European Central Bank has just announced that its interest rate will remain unchanged at 0.00% and stated that it would continue its asset purchases under the pandemic emergency purchase programme (PEPP).

ECB noted that it would make purchases under PEPP until at least the end of June 2021 or until it sees that the coronavirus crisis is over, which means that asset purchases may be continued after mid-2021.

ECB also promised to keep interest rates at current or even lower levels until its inflation outlook gets to levels close to 2%. Unlike the U.S. Fed, ECB decided not to adopt an average inflation target of 2%.

At this point, the market’s reaction is muted. However, if traders decide that ECB was not dovish enough, they will push euro higher, putting pressure on the U.S. dollar. Weaker U.S. dollar may provide additional support to U.S. stocks.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Daily Forecast – Resistance At The 50 EMA Stays Strong

USD/JPY Video 10.09.20.

U.S. Dollar Failed To Gain More Upside Momentum

USD/JPY returned back to the trading range between the 20 EMA at 106.10 and the 50 EMA at 106.25 and tested the high end of this range.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, moved closer to the nearest support at the 20 EMA at 93.05 amid signs that U.S. coronavirus aid bill negotiations have once again stalled.

On Tuesday, U.S. Republicans offered a bill worth $300 billion, which was much smaller than the original $1 trillion plan. Democrats wanted to provide aid of more than $3 trillion but signaled that they were ready to scale it down to $2.2 trillion.

Both sides remain very far apart, and negotiations will get harder as elections draw closer. The absence of new U.S. economic stimulus is a negative factor for the U.S. dollar and USD/JPY.

Today, Japan provided Machinery Orders report for July. On a year-over-year basis, Machinery Orders declined by 16.2% compared to analyst consensus which called for a decline of 18.3%.

On a month-over-month basis, Machinery Orders increased by 6.3% compared to analyst consensus of 1.9%. Better-than-expected Machinery Orders are a rare bright spot in Japan’s economic data.

U.S. will soon provide Initial Jobless Claims and Continuing Jobless Claims reports which may have a significant impact on USD/JPY trading dynamics today. Initial Jobless Claims report is projected to show that 846,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are expected to decline from 13.25 million to 12.93 million.

Technical Analysis

usd jpy september 10 2020

USD/JPY failed to gain more momentum and remains range-bound.

In case USD/JPY is able to settle above the nearest resistance level at the 50 EMA at 106.25, it will gain more upside momentum and head towards the next significant resistance level at 107.00.

On the support side, a move below the nearest support level at the 20 EMA at 106.10 will open the way to the test of the next material support level at 105.30.

The current trading range is very tight so USD/JPY will soon make another attempt to gain more momentum.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Euro Gains Ground Ahead Of ECB Interest Rate Decision

EUR/USD Video 10.09.20.

All Eyes On Commentary From The European Central Bank

EUR/USD is trying to get back above the 20 EMA at 1.1830 as traders await the Interest Rate Decision from the European Central Bank which is due to be released today.

The interest rate is expected to stay unchanged at 0% so the market will mostly focus on the commentary from ECB.

The key question is what ECB plans to do with inflation which slipped to -0.4% in August. Officially, ECB wants to bring inflation closer to 2% but current inflation rate is very far away from this target.

The U.S. Fed has recently adopted an average inflation target of 2% which will allow it to keep rates at the bottom even if inflation rises above 2%. Some traders believe that ECB will adopt a similar target in order to provide more confidence to the market and stop the rapid increase in the value of euro.

ECB may choose to deliver dovish comments aimed at containing the euro rally but it remains to be seen whether the market will take them seriously. In short, EUR/USD is set for a very active trading session today.

Technical Analysis

eur usd september 10 2020

EUR/USD tries to continue its rebound and settle above the 20 EMA at 1.1830. In case this attempt is successful, EUR/USD will gain more upside momentum and head towards the next resistance level at 1.1910.

The resistance at 1.1910 is set to be strong, and EUR/USD will need additional catalysts to get above this level. If this happens, EUR/USD will move towards the next resistance level at 1.1965.

On the support side, the nearest support level for EUR/USD is located near the recent lows at 1.1765. If EUR/USD manages to get below this level, it will head towards the next support level at the 50 EMA at 1.1730.

A move below the 50 EMA will be a major problem for EUR/USD bulls since EUR/USD will leave the wide range in which it traded since early August. In this scenario, EUR/USD will have great chances to establish a new downside trend.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – Attempt To Settle Above 1.3000

GBP/USD Video 10.09.20.

British Pound Tries To Gain More Upside Momentum

GBP/USD tries to continue its rebound as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the nearest resistance level at 93.50 and declined closer to the 93 level. The nearest support for U.S. Dollar Index is located at the 20 EMA at 93.05. In case the U.S. Dollar Index manages to settle below this level, it will gain more downside momentum which will be bullish for GBP/USD.

The Brexit story will continue to impact GBP/USD trading dynamics in the upcoming trading sessions. UK is ready to make changes to the Brexit Withdrawal Agreement, breaking the international law “in a limited way”.

At this point, the market is not sure whether this is a real intention or a part of negotiation tactics, but GBP/USD will certainly remain very sensitive to Brexit-related headlines.

Today, traders will also focus on the upcoming U.S. employment reports. Initial Jobless Claims are expected to drop to 846,000 while Continuing Jobless Claims are projected to decline to 12.93 million.

If the employment data shows that U.S. job market continues to recover, the U.S. dollar may get more support. At the same time, weak reports may lead to a sell-off, pushing GBP/USD higher.

Technical Analysis

gbp usd september 10 2020

GBP/USD managed to get above the nearest resistance level at 1.2980 and is trying to settle above 1.3000.

In case this attempt is successful, GBP/USD will head to the test of the resistance at the 50 EMA at 1.3030. The recent sell-off pushed RSI towards the oversold territory so there is plenty of room to gain more upside momentum in case the right catalysts emerge.

If GBP/USD manages to settle above the 50 EMA at 1.3030, it will gain more upside momentum and move towards the next resistance level at 1.3110. A move above 1.3110 will open the way to the test of the 20 EMA at 1.3155.

On the support side, the previous resistance at 1.2980 will serve as the first support level for GBP/USD. If GBP/USD manages to settle below this level, it will head towards the next support near the recent lows at 1.2880.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – U.S. Dollar Pulls Back After Major Upside Move

USD/CAD Video 09.09.20.

Canadian Dollar Rebounds After Yesterday’s Significant Sell-Off

USD/CAD pulled back after yesterday’s upside move as the U.S. dollar lost ground against a broad basket of currencies while WTI oil managed to get back above the $37 level.

U.S. Dollar Index made an attempt to settle above the resistance at 93.50 but did not manage to gain more momentum and declined towards 93.20. The nearest support for U.S. Dollar Index is located at the 20 EMA at 93.05, and a move below this support level will signal that the American currency is losing its upside momentum.

In this case, the U.S. Dollar Index will head towards the next support level at 92.50 which would be bearish for USD/CAD.

Today, Bank of Canada announced its Interest Rate Decision. As expected, the interest rate remained intact at 0.25%. Speaking about the trajectory of the economic recovery, the Bank of Canada noted that the pace of the recovery remained dependent on the path of the coronavirus pandemic.

The Canadian economy needs significant support, and Bank of Canada continues its quantitative easing program. The central bank also promised to keep rates low until inflation is stable at the 2% target.

It remains to be seen whether the world central banks will be able to achieve their 2% inflation targets in the foreseable future, but markets should prepare for years of low interest rates at all developed economies.

Technical Analysis

usd cad september 9 2020

USD to CAD failed to settle above the resistance level at 1.3235 and returned back under 1.3200.

The nearest support for USD to CAD is located at the 20 EMA at 1.3150. In case USD to CAD manages to settle below this level, it will head towards the next support at 1.3135.

A move below the support at 1.3135 will open the way to the test of the support level at 1.3050. No significant levels were formed between 1.3050 and 1.3135 so this move may be fast.

On the upside, USD to CAD needs to settle above the resistance at 1.3235 to have a chance to continue the upside move. If this happens, USD to CAD will head towards the next resistance level at the 50 EMA at 1.3270.

For a look at all of today’s economic events, check out our economic calendar.

Oil Rebounds After Yesterday’s Major Sell-Off

Oil Video 09.09.20.

Russia Plans To Drill More Wells To Prepare For Oil Demand Rebound

In an article published in the Russian Energy Policy journal, Russia’s Energy Minister Alexander Novak emphasized the necessity to save the Russian oil services industry.

The oil services industry is under severe pressure in the whole world as oil producers cut their capex plans. The charts of the world’s leading oil services firms like Schlumberger or Halliburton tell a sad story – these firms are going through an unprecedented crisis.

As Russia cut its oil production in line with the OPEC+ production cut deal, its oil services firms started to suffer from lack of contracts. Russia fears that if it loses its services firms, it will not be able to bring production back quickly.

In this light, Russia’s plans is to finance drilling of wells that will be used later. According to Novak, Russia may drill about 2,700 wells from 2020 to April of 2022 in order to prepare for the rebound of oil demand.

In the near term, these plans will have little influence on oil prices which are mostly impacted by the dynamics of inventory levels and market’s expectations regarding the speed of oil demand recovery.

In the longer-term, an overhang of production from Russia may put some pressure on prices since traders will know that Russia is ready to immediately boost its production once the OPEC+ production cut deal is over.

Fitch Ratings Follows Others And Cuts Its Oil Price Forecast

Many analysts and oil companies have already cut their long-term oil price forecasts in 2020. Fitch Ratings is the latest notable name in this list.

According to Fitch, long-term Brent oil prices will average $53 per barrel while WTI oil prices will average $50 per barrel. The previous forecast implied levels of $55 for Brent and $52 for WTI.

Fitch is also pessimistic on the potential rebound in 2021 since its WTI forecast for the next year is just $42 per barrel.

The growing chorus of oil price pessimists is a negative factor for the oil market. As there are significant doubts about oil’s long-term ability to settle above the $50 level and continue its upside move to much higher levels that were seen not so long ago. In this light, traders will demand very significant catalysts to push oil above recent highs.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Silver Gets Back Above The 20 EMA

Silver Video 09.09.20.

Silver Tries To Continue Its Rebound

Silver managed to stay above the 20 EMA at $26.75 as the U.S. dollar pulled back after the recent rebound.

Yesterday, silver made a very serious attempt to settle below the 20 EMA and traded as low as $25.85. However, it managed to rebound and stays near the key support at the 20 EMA.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, made an attempt to settle above 93.50 but failed to gain sufficient upside momentum and declined towards 93.25.

The key catalyst for this move was the rebound of GBP/USD which managed to gain some ground after a major sell-off which was caused by fears of hard Brexit.

If the U.S. Dollar Index continues to lose ground and gets to the support at the 20 EMA at 93.05, silver will likely gain more upside momentum.

Meanwhile, gold is trying to get above its 20 EMA at $1945. If this attempt is successful, gold will head towards the psychologically important $2000 level and provide support to the whole precious metal sector.

Gold/silver ratio is still located in the range between 71 and 73. Gold/silver ratio has been mostly stable for a month which is a bullish factor for silver since gold/silver ratio did not manage to rebound after a very strong downside move.

Technical Analysis

silver september 9 2020

Silver is currently trying to gain more upside momentum above the 20 EMA at $26.75. If this attempt is successful, silver will head towards the nearest resistance level at $27.75.

A successful test of the resistance at $27.75 will open the way to the next resistance level at $28.50.

On the support side, the 20 EMA will continue to serve as the first important support level for silver. Silver needs to settle below the 20 EMA to have a chance to develop more downside momentum.

The support at $26.20 did not present itself during the recent sell-off, so the next support level for silver is located at the recent lows at $25.85.

If silver manages to settle below this support level, it will move towards the next support at $24.95.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Stocks Set To Open Higher As Tech Shares Rebound

Tech Stocks Are Set To Rebound

S&P 500 futures are gaining ground in premarket trading as tech stocks look ready to rebound after a major sell-off.

The biggest loser of the recent days, Tesla, is up more than 6% in premarket action. Apple, Amazon, Microsoft, Facebook are also set for a solid start of the day.

The trading dynamics of tech stocks have a very big impact on general market mood so their rebound is a necessary catalyst to stop the current market sell-off.

While the recent sell-off was significant, it did not have any clear catalyst and was mostly caused by profit-taking after a major rally. In case tech stocks manage to rebound and do not fall below their recent lows, S&P 500 will resume its previous upside trend.

AstraZeneca Has Put Its Vaccine Trials On Pause

One of the participants of AstraZeneca‘s study had an unexplained illness, prompting the company to stop the trial.

While such situations are not rare in large-scale trials and the fate of the vaccine depends on the upcoming investigation, traders’ reaction was rather nervous, and AstraZeneca shares are losing ground in premarket trading.

However, the news did not have any material impact on the general market mood. In addition to the fact that such situations sometimes happen in large-scale trials, there are many potential vaccines in the pipeline so the market’s consensus is that the world will have a working vaccine against COVID-19 within a reasonable timeframe.

Oil Rebounds Above $37

WTI oil managed to find support near $36 and rebounded above $37 as speculative traders increased their long bets on oil after the major sell-off.

In just five trading sessions, oil declined from $43 to $36 on concerns about the speed of oil demand recovery.

Oil price recovery is a welcome development for oil-related equities which had a very challenging start of the month.

It remains to be seen whether oil price recovery will continue as the U.S. dollar is trying to gain more ground against a broad basket of currencies and may put additional pressure on commodities.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Daily Forecast – Attempt To Settle Below The 20 EMA

USD/JPY Video 09.09.20.

Yen Gains Ground As Demand For Safe Haven Assets Increases

USD/JPY  declined below 106.00 despite the U.S. dollar’s rebound against a broad basket of currencies as the global risk-off sentiment increased demand for Japanese yen.

Yesterday, S&P 500 declined by almost 3% as the sell-off in tech stocks continued. This move put pressure on global market sentiment and provided support to the yen which often benefits from global market turmoil.

Meanwhile, the U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, continues its rebound and is trying to settle above 93.50.

A move above this level will likely lead to increased upside momentum and may provide some support to USD/JPY.

Tomorrow, U.S. will provide its new Initial Jobless Claims and Continuing Jobless Claims reports which may have a significant impact on the near-term fate of the U.S. dollar.

The Initial Jobless Claims report is expected to show that 846,000 Americans filed for unemployment benefits in a week while Continuing Jobless Claims are projected to decline to 12.93 million.

Better-than-expected U.S. employment reports may provide additional support to the U.S. dollar which would be bullish for USD/JPY. In case the current condition of the job market is worse than expected, U.S. dollar’s rebound may take a pause, putting additional pressure on USD/JPY.

Technical Analysis

usd jpy september 9 2020

USD/JPY is currently trying to settle below the 20 EMA at 106.05. In case this attempt is successful, USD/JPY will gain more downside momentum and move towards the next material support level at 105.30.

A successful test of the support at 105.30 will open the way to the next support level at 104.70. In addition, a move below the support at 105.30 will signal that USD/JPY is ready to establish a new downside trend.

On the upside, the previous support at the 20 EMA will likely serve as the first important resistance level for USD/JPY. In case USD/JPY manages to get above the 20 EMA, it will find itself back in a tight range between the 20 EMA at 106.05 and the 50 EMA at 106.25.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Test Of Support At 1.1765

EUR/USD Video 09.09.20.

Euro Continues To Lose Ground

EUR/USD is trying to settle below the support level at 1.1765 as the U.S. dollar continues to gain ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above 93.50 and is trying to gain more upside momentum. The continued sell-off in GBP/USD is playing a major role in the current U.S. dollar strength.

The next resistance level for the U.S. Dollar Index is located at the 50 EMA at 94.10. A move towards this level will be bearish for EUR/USD.

Yesterday, EU reported the third estimate of its second-quarter GDP Growth Rate. GDP declined by 11.8% on a quarter-over-quarter basis, compared to analyst consensus which called for a decline of 12.1%. On a year-over-year basis, GDP declined by as much as 14.7%.

Meanwhile, Employment Change report indicated that employment declined by 2.9% in the second quarter on a quarter-over-quarter basis.

The economic data from Euro Area remains mostly grim so traders will be waiting for clues about additional stimulus when the European Central Bank announces its Interest Rate Decision on Thursday.

While the rate is expected to stay unchanged at 0%, ECB may follow U.S. Fed’s example and promise to push inflation above 2% in order to support the economic recovery. This scenario would be bearish for EUR/USD.

Technical Analysis

eur usd september 9 2020

Currently, EUR/USD is testing the nearest support level at 1.1765. If this test is successful, EUR/USD will gain more downside momentum and head towards the next support level at the 50 EMA at 1.1725.

RSI is still in the moderate territory so there is plenty of room to gain more momentum in case the right catalysts emerge. A move below the 50 EMA at 1.1725 will open the way to the test of the next support level at 1.1665.

On the upside, the nearest resistance for EUR/USD is located at the 20 EMA at 1.1825. A move above the 20 EMA will signal that EUR/USD is ready to get back to the upside mode so I’d expect a lot of interest from traders in case EUR/USD gets to the test of this level.

In case EUR/USD manages to settle above the 20 EMA, it will gain more upside momentum and head towards the next resistance at 1.1910.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – The Sell-Off Continues

GBP/USD Video 09.09.20.

British Pound Remains Under Serious Pressure

GBP/USD declined below 1.3000 as British pound remained under significant pressure due to fears of hard Brexit.

Brexit has been the main topic for GBP/USD since the beginning of this week.  UK set a deadline of October 15 for the trade deal with the EU and noted that it was ready to leave without any deal.

Then, a report indicated that UK was ready to make changes to Brexit Withdrawal Agreement, prompting negative reaction from EU.

In the latest development on this front, Northern Ireland minister Brandon Lewis stated that the proposed changes would break the international law in a limited way.

Not surprisingly, the prospect of breaking the international law weighed on the pound. At this point, it looks like risks of hard Brexit increase day by day, and GBP/USD trading dynamics will heavily depend on Brexit-related news flow in the upcoming trading sessions.

Meanwhile, the U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, is trying to settle above the nearest resistance near 93.50.

If this attempt is successful, the U.S. dollar will gain more upside momentum and continue its rebound which would be bearish for GBP/USD.

Technical Analysis

gbp usd september 9 2020

GBP/USD managed to get below the support at 1.2980 and continues to move lower. Interestingly, RSI is still in the moderate territory despite the sell-off so there is plenty of room to gain more downside momentum in case the right catalysts emerge.

The next support for GBP/USD is located at 1.2880. In case GBP/USD manages to settle below this level, it will head towards the next support level at 1.2815.

On the upside, GBP/USD needs to get above the previous support level at 1.2980 to have a chance to stop the current downside momentum. If this happens, GBP/USD will head towards the resistance at the 50 EMA at 1.3035.

A move above the 50 EMA will lead to increased upside momentum, pushing GBP/USD towards the next material resistance level at 1.3110.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – Canadian Dollar Loses Ground As Oil Slides Below $37

USD/CAD Video 08.09.20.

U.S. Dollar Gained Significant Upside Momentum

USD/CAD managed to get above the 20 EMA at 1.3145 and gained significant upside momentum as the U.S. dollar gained ground against a broad basket of currencies while WTI oil fell below the $37 level.

The U.S. Dollar Index managed to settle above the 20 EMA at 93 and moved towards the next resistance level near 93.50. If the U.S. Dollar Index continues its upside move, it will head towards the test of the 50 EMA level at 94.10 which will be bullish for USD/CAD.

WTI oil found itself under significant pressure as traders are increasingly worried about the speed of the oil demand rebound. Weak oil puts pressure on commodity-related currencies like the Canadian dollar.

Tomorrow, Bank of Canada will announce its Interest Rate Decision and provide comments on its policy.

This will be a very interesting moment for USD/CAD as traders try to guess whether other central banks will be forced to follow the U.S. Federal Reserve’s example and promise to boost inflation above 2% to help the recovery.

Technical Analysis

usd cad september 8 2020

USD to CAD has finally settled above the resistance at the 20 EMA at 1.3145. This is a very important moment for USD to CAD since a move above the 20 EMA signals that the previous downside momentum has come to an end.

At this point, USD to CAD will try to establish a new upside trend. To do this, USD to CAD needs to stay above the 20 EMA and get to the test of the next important resistance level at 1.3235.

If USD to CAD is able to get above the resistance at 1.3235, it will head towards the 50 EMA at 1.3275. A move above 1.3275 will open the way to the test of the next resistance level at 1.3330.

On the support side, the previous resistance at the 20 EMA at 1.3145 will serve as the first important support level for USD to CAD. If USD to CAD moves below the 20 EMA, it will gain downside momentum and head towards the next support level at 1.3050. A move below 1.3050 will open the way to the test of the recent lows at 1.3000.

For a look at all of today’s economic events, check out our economic calendar.

Oil Falls Below $37 As Sell-Off Turns Into Panic

Oil Video 08.09.20.

Oil Falls On Demand Concerns

Oil’s sell-off intensified as traders became increasingly worried about the pace of the oil demand recovery.

Yesterday, we discussed Saudi Arabia’s decision to cut prices for its customers. Not surprisingly, the market interpreted this move as a sign of a weak demand.

In addition to the bearish news from Saudi Arabia, IEA director for energy markets and security, Keisuke Sadamori, stated that current oil demand recovery was not robust and that jet fuel demand remained a big problem.

Demand for jet fuel directly depends on the world’s success in the battle against coronavirus. At this point, the world struggles to contain COVID-19, and some countries have to battle against a second wave of infections.

Mass vaccination is not expected until mid-2021 so jet fuel demand will remain under significant pressure for many months to come. In this light, it’s hard to expect a return to pre-coronavirus levels of demand anytime soon.

In recent months, oil traded in a tight range, and traders paid little if any attention to the developments on the coronavirus front. Now, it looks like this topic is getting back into spotlight since the continuation of oil demand recovery depends on the world’s ability to contain the virus without additional restrictions.

Strong U.S. Dollar And The End Of U.S. Driving Season Put Additional Pressure On Oil

The U.S. Dollar Index has finally managed to settle above the 20 EMA at the 93 level and continued its rebound. Strong U.S. dollar is a negative catalyst for oil which is traded in dollars.

In previous months, U.S. dollar weakness provided additional support to oil prices, and a lack of this support is a negative catalyst for oil.

Another factor that contributed to the sell-off is the end of the U.S. driving season. The summer driving season supports demand for gasoline, and it remains to be seen whether gasoline consumption will be able to rise without this support.

Without a continued increase in demand for oil, crude inventories will stay at elevated levels, putting pressure on prices. While the current oil price action looks like a panic, it is backed by some fundamental concerns.

For a look at all of today’s economic events, check out our economic calendar.