EOS, Stellar’s Lumen, and Tron’s TRX – Daily Analysis – December 3rd, 2020

EOS

EOS rose by 1.30% on Wednesday. Partially reversing an 8.18% slide from Tuesday, EOS ended the day at $3.0609.

A bearish start to the day saw EOS fall to an early morning intraday low $2.9411 before making a move.

Steering clear of the first major support level at $2.8016, EOS rose to a late morning intraday high $3.1052.

Falling short of the first major resistance level at $3.2710, EOS fell back to sub-$3.00 levels and into the red.

Finding late support from the broader market, however, EOS moved back through to $3.00 levels to end the day in the green.

At the time of writing, EOS was up by 0.23% to $3.0679. A mixed start to the day saw EOS fall to an early morning low $3.0560 before striking a high $3.1063.

EOS left the major support and resistance levels untested early on.

EOSUSD 031220 Hourly Chart

For the day ahead

EOS would need to avoid a fall through the $3.0357 pivot level to support a run at the first major resistance level at $3.1304.

Support from the broader market would be needed, however, for EOS to break back through to $3.10 levels.

Barring an extended crypto rally, the first major resistance level would likely cap any upside. In the event of an extended rally, EOS could test resistance at $3.2 before any pullback. The second major resistance level sits at $3.1998.

Failure to avoid a fall through the pivot level at $3.0357 would bring the first major support level at $2.9663 into play.

Barring an extended sell-off, however, EOS should steer of sub-$2.90 levels. The second major support level sits at $2.8716.

Looking at the Technical Indicators

First Major Support Level: $2.9663

First Major resistance Level: $3.1304

23.6% FIB Retracement Level: $6.52

38% FIB Retracement Level: $9.68

62% FIB Retracement Level: $14.77

Stellar’s Lumen

Stellar’s Lumen rose by 0.90% on Wednesday. Following Tuesday’s 9.45% slide, Stellar’s Lumen ended the day at $0.18545.

A bearish start to the day saw Stellar’s Lumen fall to a mid-morning intraday low $0.1772 before making a move.

Steering clear of the first major support level at $0.1697, Stellar’s Lumen rose to a late morning intraday high $0.1882.

Falling short of the 62% FIB of $0.1989 and the first major resistance level at $0.2012, Stellar’s Lumen slid back to sub-$0.18 levels.

Finding late support, however, Stellar’s Lumen briefly moved back through to $0.185 levels to reverse losses from the day.

At the time of writing, Stellar’s Lumen was down by 0.47% to $0.18459. A mixed start to the day saw Stellar’s Lumen rise to an early morning high $0.18832 before falling to a low $0.18843.

Stellar’s Lumen left the major support and resistance levels untested early on.

XLMUSD 031220 Hourly Chart

For the day ahead

Stellar’s Lumen would need to avoid a fall through the $0.18362 pivot level to support a run at the first major resistance level at $0.19003.

Support from the broader market would be needed, however, for Stellar’s Lumen to break out from the morning high $0.18832.

Barring an extended crypto rally, the first major resistance level and resistance at $0.19 would likely cap any upside.

In the event of another breakout, Stellar’s Lumen could test resistance at $0.1950 before any pullback. The second major resistance level sits at $0.19462.

Failure to avoid a fall through the pivot level at $0.18362 would bring the first major support level at $0.17903 into play.

Barring another extended crypto sell-off, however, Stellar’s Lumen should steer clear of sub-$0.17 levels. The second major support level at $0.17262 should limit any downside.

Looking at the Technical Indicators

First Major Support Level: $0.17903

First Major Resistance Level: $0.19003

23.6% FIB Retracement Level: $0.09280

38% FIB Retracement Level: $0.1333

62% FIB Retracement Level: $0.1989

Tron’s TRX

Tron’s TRX rose by 3.69% on Wednesday. Partially reversing a 7.04% slide from Tuesday, Tron’s TRX ended the day at $0.031134.

It was a mixed start to the day. Tron’s TRX fell to an early morning intraday low $0.02954 before making a move.

In spite of the pullback, Tron’s TRX steered clear of the 23.6% FIB of $0.0291 and the first major support level at $0.02782.

Finding support through the morning, Tron’s TRX rose to a late morning intraday high $0.03115 before hitting reverse.

Falling short of the first major resistance level at $0.03347, Tron’s TRX fell back to a low $0.03025 before finding late support. A late move back through to $0.031 levels delivered the upside on the day.

At the time of writing, Tron’s TRX was down by 0.19% to $0.031063. A mixed start to the day saw Tron’s TRX rise to an early morning high $0.031469 before falling to a low $0.031063.

Tron’s TRX left the major support and resistance levels untested early on.

TRXUSD 031220 Hourly Chart

For the Day Ahead

Tron’s TRX would need to avoid a fall through the $0.03068 pivot level to support a run at the first major resistance level at $0.03181.

Support from the broader market would be needed, however, for Tron’s TRX to break out from Wednesday’s high $0.03115.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

In the event of another breakout, resistance at $0.032 would likely come into play. The second major resistance level sits at $0.03229.

Failure to avoid a fall through the $0.03068 pivot level would bring the first major support level at $0.03020 and the 23.6% FIB of 0.0291 into play.

Barring another extended sell-off, however, Tron’s TRX should steer clear of sub-$0.029 levels. The 23.6% FIB and the second major support level at $0.02907 should limit any downside.

Looking at the Technical Indicators

First Major Support Level: $0.03020

First Major Resistance Level: $0.03181

23.6% FIB Retracement Level: $0.0291

38.2% FIB Retracement Level: $0.0428

62% FIB Retracement Level: $0.0648

Please let us know what you think in the comments below

Thanks, Bob

Ethereum, Litecoin, and Ripple’s XRP – Daily Tech Analysis – December 3rd, 2020

Ethereum

Ethereum rose by 1.96% on Wednesday. Partially reversing Tuesday’s 5.02% slide, Ethereum ended the day at $597.35.

A mixed start to the day saw Ethereum fall to an early morning intraday low $575.08 before making a move.

Steering clear of the first major support level at $553.91, Ethereum rallied to a late morning intraday high $604.96

Falling well short of the first major resistance level at $627.34, Ethereum fell back into the red before finding late support.

Late in the day, Ethereum briefly revisited $600 levels before easing back to wrap up the day at $597 levels.

At the time of writing, Ethereum was up by 0.49% to $600.27. A mixed start to the day saw Ethereum fall to an early morning low $596.41 before rising to a high $600.40.

Ethereum left the major support and resistance levels untested early on.

ETHUSD 031220 Hourly Chart

For the day ahead

Ethereum would need to avoid a fall through the pivot level at $592.46 to support a run at the first major resistance level at $609.85.

Support from the broader market would be needed, however, for Ethereum to break out from Wednesday’s high $604.96.

Barring an extended crypto rally, the first major resistance level and resistance at $610 would likely cap any upside.

In the event of another breakout, Ethereum could test resistance at $620 before any pullback. The second major resistance level sits at $622.34.

Failure to avoid a fall through the $592.46 pivot would bring the first major support level at $579.97 into play.

Barring an extended sell-off, however, Ethereum should steer well clear of sub-$570 levels. The second major support level sits at $562.58.

Looking at the Technical Indicators

First Major Support Level: $579.97

Pivot Level: $592.46

First Major Resistance Level: $609.85

23.6% FIB Retracement Level: $495

38.2% FIB Retracement Level: $416

62% FIB Retracement Level: $288

Litecoin

Litecoin rose by 4.47% on Wednesday. Reversing most of a 2.87% fall from Tuesday, Litecoin ended the day at $88.99.

It was also a mixed start to the day. Litecoin fell to an early morning intraday low $82.79 before making a move.

Steering clear of the first major support level at $79.01, Litecoin struck a late morning intraday high $90.63.

Falling short of the first major resistance level at $92.17, Litecoin fell back to sub-$85 levels before finding late support.

A late move back through to $88 levels delivered the upside on the day.

At the time of writing, Litecoin was up by 0.66% to $89.58. A mixed start to the day saw Litecoin fall to an early morning low $88.88 before rising to a high $89.62.

Litecoin left the major support and resistance levels untested early on.

LTCUSD 031220 Hourly Chart

For the day ahead

Litecoin would need to avoid a fall through the $87.47 pivot to support a run at the first major resistance level at $92.15.

Support from the broader market would be needed, however, for Litecoin to break out from Wednesday’s high $90.63.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

In the event of another extended breakout, Litecoin could test the second major resistance level at $95.31.

Failure to avoid a fall through the $87.47 pivot level would bring the first major support level at $84.31 into play.

Barring an extended sell-off on the day, however, Litecoin should steer well clear of the second major support level at $79.63.

Looking at the Technical Indicators

First Major Support Level: $84.31

Pivot Level: $87.47

First Major Resistance Level: $92.15

23.6% FIB Retracement Level: $45.30

38.2% FIB Retracement Level: $71

62% FIB Retracement Level: $100

Ripple’s XRP

Ripple’s XRP rose by 3.18% on Wednesday. Partially reversing an 8.05% slide from Tuesday, Ripple’s XRP ended the day at $0.63098.

A bearish start to the day saw Ripple’s XRP fall to a mid-morning intraday low $0.59348 before making a move.

Steering clear of the first major support level at $0.5621, Ripple’s XRP rose to a late morning intraday high $0.63083. The morning rally did see Ripple’s XRP break through the 23.6% FIB of $0.6274 before hitting reverse.

Falling well short of the first major resistance level at $0.6711, Ripple’s XRP fell back to sub-$0.61 levels and into the red.

A late move back through 23.6% FIB to $0.63 levels delivered the upside on the day, however.

At the time of writing, Ripple’s XRP was up by 0.71% to $0.63546. A mixed start to the day saw Ripple’s XRP fall to an early morning low $0.62951 before rising to a high $0.63903.

Ripple’s XRP left the major support and resistance levels untested early on.

XRPUSD 031220 Hourly Chart

For the day ahead

Ripple’s XRP will need to avoid a fall through 23.6% FIB of $0.6274 and the $0.6184 pivot level to support a run at the first major resistance level at $0.6434.

Support from the broader market would be needed, however, for Ripple’s XRP to break back through to $0.64 levels.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

In the event of an extended rally, Ripple’s XRP could test resistance at $0.66 before any pullback. The second major resistance sits at $0.6558.

Failure to avoid a fall through the $0.6184 pivot would bring the first major support level at $0.6060 into play.

Barring another extended crypto sell-off, Ripple’s XRP should steer clear of sub-$0.55 levels. The second major support level at $0.5811 should limit any downside.

Looking at the Technical Indicators

First Major Support Level: $0.6060

Pivot Level: $0.6184

First Major Resistance Level: $0.6434

23.6% FIB Retracement Level: $0.6274

38.2% FIB Retracement Level: $0.5285

62% FIB Retracement Level: $0.3687

Please let us know what you think in the comments below.

Thanks, Bob

European Equities: Service Sector PMIs and Brexit in Focus

Economic Calendar:

Thursday, 3rd December

Spanish Services PMI (Nov)

Italian Services PMI (Nov)

French Services PMI (Nov) Final

German Services PMI (Nov) Final

Eurozone Markit Composite PMI (Nov) Final

Eurozone Services PMI (Nov) Final

Eurozone Retail Sales (MoM) (Oct)

Friday, 4th December

German Factory Orders (MoM) (Oct)

IHS Markit Construction PMI (Nov)

The Majors

It was a mixed day for the European majors on Wednesday, following Monday’s gains. The DAX30 and EuroStoxx600 fell by 0.52% and by 0.05% respectively, while the CAC40 ended the day up by 0.02%.

For the majors, concerns over a lack of progress towards Brexit pegged the majors back on the day. Also weighing on the majors and the DAX30, in particular, was news that the Democrats would retain the phase 1 trade agreement with China near-term.

There were positives, however, that provided support. News of the UK approving the BioNTech/Pfizer.inc vaccine delivered support, as did Joe Biden talk of a COVID-19 stimulus package.

According to reports on Wednesday, the President-Elect stated that delivering a COVID-19 stimulus package was an immediate priority.

The Stats

It was a relatively busy day on the Eurozone economic calendar. German retail sales figures for October were in focus going into the European open.

According to Destatis, retail sales rose by 2.6% in October, reversing a 1.9% slide in September. Economists had forecast a 1.2% rise.

  • Compared with the same month a year ago, retail sales were up by 8.2%.
  • Supermarket, self-service department shops, and hypermarket sales were up by 7.9%, year-on-year.
  • In the non-food retail sector, sales rose by 9.0%.
  • When compared with February 2020, the pre-COVID-19 pandemic month, retail sales rose by 5.9%.

Unemployment numbers from Spain and the Eurozone released later in the day had a muted impact on the majors.

In Spain, the unemployment rose by 25.3k in September, following a 49.6k jump in August.

For the Eurozone, the unemployment rate slipped from an upwardly revised 8.5% to 8.4% in October. Economists had forecast an unemployment rate of 8.4%.

According to Eurostat,

  • While down from 8.5% in September, unemployment was up from 7.4% in October 2019.
  • Compared with September 2020, Eurostat estimates that the number of unemployed persons fell by 91,000.
  • By contrast, however, the number of unemployed persons increased by 2.186 million when compared with October 2019.

From the U.S

ADP non-farm employment change figures were in focus late in the day.

In November, nonfarm employment increased by 307k, falling short of a forecasted 410k increase. In October, nonfarm employment had increased by 365k.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. Continental slid by 1.56%, with BMW and Volkswagen falling by 0.39% and by 0.44% respectively. Daimler rose by 0.24%, however, to buck the trend on the day.

It was a bullish day for the banks. Deutsche Bank rose by 0.90%, with Commerzbank ending the day up by 1.81%.

From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole rose by 1.69% and by 1.67% respectively, with Soc Gen gaining 2.10%.

It was a mixed day for the French auto sector, however. Peugeot fell by 0.79%, while Renault rose by 1.45%.

Air France-KLM slipped by 0.85%, while Airbus SE rose by 2.15%, following Tuesday’s 1.90% gain.

On the VIX Index

It was a 2nd consecutive day in the green for the VIX, after having fallen for 5 consecutive days. Following on from Tuesday’s 0.97% gain, the VIX rose by 1.93% to end the day at 21.17.

Disappointing ADP nonfarm figures had limited impact, while plans to retain the phase 1 trade agreement with China was market negative. On the positive, however, remained progress towards a COVID-19 vaccine and hopes of a stimulus package to support the U.S economy.

For the U.S markets, it was a mixed day after Tuesday’s gains and last month’s rally. The Dow and S&P500 rose by 0.20% and by 0.18% respectively, while the NASDAQ slipped by 0.05%.

VIX 031220 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. Key stats include services and composite PMI numbers for Italy and Eurozone retail sales figures.

Finalized services and composite PMI figures for November are also due out for France, Germany, and the Eurozone.

We would expect the Eurozone’s composite and services PMI to have the greatest impact on the majors.

From the U.S, the all-important ISM services PMI and weekly jobless claims figures will also influence later in the day.

Away from the economic calendar, Brexit and COVID-19 news updates will need monitoring. Any further chatter on a stimulus package from Capitol Hill would influence.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 18 points.

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

US Stock Market Overview – Stock Rise Led By Energy; ADP Payrolls Disappoint

US stocks rose on Thursday following news that House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer had urged Senate Majority Leader Mitch McConnell to use a $908 billion bipartisan stimulus plan as the basis for relief talks before the end of the year. Sectors in the S&P 500 index were mixed, led higher by energy shares, consumer staples bucked the trend. News before the opening bell that the UK had approved the Pfizer vaccine, helped buoy stock prices. Mortgage applications in the US jumped more than expected while ADP private payrolls disappointed.

Mortgage Applications Rise

Mortgage applications to purchase a home jumped 9% last week from the previous week, according to the Mortgage Bankers Association’s index. Purchase applications were a robust 28% higher from a year ago.

ADP Private Payrolls Rise Less than Expected

Private companies added 307,000 jobs in November below the 475,000 expected. The October figure was revised higher to 404,000. This was the smallest gain since July’s 216,000. The revision added 39,000 to the original estimate from October, making the November miss not as bad as it appears. This comes ahead of Friday’s payroll report. The Labor Department on Friday is expected to report that the economy in November added 440,000 jobs, down from the 638,000 in October. Private payrolls are estimated to grow by 590,000.

Biden Says He won’t Immediately Terminate Chinese Tariffs

President-elect Joe Biden will not immediately remove tariffs imposed by President Donald Trump on China. Biden said he first wants to conduct a full review of the “phase one” trade deal that the Trump administration reached with China before he makes any decision on the future direction of trade with the worlds second largest economy.

Natural Gas Price Prediction – Prices Drop Ahead of Inventory Report

Natural gas prices moved lower on Wednesday breaking down ahead of Thursday’s inventory report. Expectations are for a 23 Bcf draw in stockpiles according to survey provider Estimize. US natural gas consumption is expected to decline year over year in 2020 according to the EIA. The weather is expected to be warmer than normal throughout most of the United States for the next 2-weeks according to NOAA.

Technical Analysis

Natural gas prices broke down on Wednesday falling nearly 4%, and poised to test target support near an upward sloping trend line that comes in near 2.68. Resistance is seen near the 10-day moving average at 2.84. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 21, just above the oversold trigger level of 20. Medium-term momentum has flip-flopped and is poised to turn negative as the MACD (moving average convergence divergence) is poised to generate a crossover sell signal.

The EIA Expects Consumption to Fall

EIA expects that total U.S. consumption of natural gas will average 83.7 billion cubic feet per day in 2020, down 1.7% from 2019. The decline in total U.S. consumption reflects less heating demand in early 2020, contributing to residential demand in 2020 averaging 13.2 Bcf/d and commercial demand in 2020 averaging 8.8 Bcf. EIA forecasts industrial consumption will average 22.5 Bcf/d in 2020, down 0.6 Bcf/d from 2019 as a result of reduced manufacturing activity.

Gold Price Prediction – Prices Rise as the Dollar Continues to Slide

Gold prices rebounded for a second consecutive trading session after recapturing the 200-day moving average. The dollar index closed at a 31-month low paving the way for higher gold prices. The US Beige book was darker than expected as regions in the US show no growth. ADP private payrolls came in softer than expected but failed to weigh on US yields.

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Technical analysis

Gold prices rebounded for a second consecutive trading session adding to the gains above support near the 10-day moving average at 1,820 and then the 200-day moving average at 1,801 and then the July lows at 1,756.  Resistance is seen near the former breakdown level at 1,851. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 31, up from 18, which reflects accelerating positive momentum. Medium-term momentum remains negative but is decelerating as the MACD (moving average convergence divergence) histogram prints in the red with a rising trajectory which points to consolidation.

ADP Private Payrolls Rise Less than Expected

Private companies added 307,000 jobs in November below the 475,000 expected. The October figure was revised higher to 404,000. This was the smallest gain since July’s 216,000. The revision added 39,000 to the original estimate from October, making the November miss not as bad as it appears. This comes ahead of Friday’s payroll report. The Labor Department on Friday is expected to report that the economy in November added 440,000 jobs, down from the 638,000 in October. Private payrolls are estimated to grow by 590,000.

US Stock Market Overview – Stock Rise Led by Financials; ISM Disappoints

US stocks started the last month of the year on a positive note, with the Nasdaq hitting an all-time high. All sectors in the S&P 500 index were higher, led by financials, industrials were the worst-performing sector in the S&P 500 index. Pfizer and Moderna on Tuesday applied for vaccine approval in the EU. The Nasdaq announced that it would require in the future that all companies listed had at least one woman and one minority on the board of directors. US ISM Manufacturing came in softer than expected with a dip into contraction territory for employment. The dollar continued to tumble hitting a 2.5-year low.

Pfizer and Moderna Apply for Vaccine Approval in the EU

Pfizer Inc. and U.S. drugmaker Moderna Inc. both applied for their coronavirus vaccines to be approved in the European Union. The announcement brings hope that the EU will soon be able to start vaccinating its 448 million people against a disease.

The Nasdaq Focusses on Diversity and Inclusion

The Nasdaq Inc. will move to require listed companies to include women and people of diverse racial identities or sexual orientation on their boards. Approximately 75% of the companies listed on the Nasdaq will be impacted by this requirement. The exchange operator filed a proposal with the Securities and Exchange Commission that would require listed companies to have at least one woman on their boards, in addition to a director who is a minority or one who is lesbian, gay, bisexual, or transgender.

ISM is Softer than Expected as Employment Drops

Institute for Supply Management reported that its manufacturing index fell to 57.5% in November from a 21-month high of 59.3% in the prior month. Expectations had been for the index to decline to 58%. While the overall number remains robust, the employment component was worrisome. The Employment Index returned to contraction territory at 48.4 percent, 4.8 percentage points down from the October reading of 53.2 percent. The New Orders Index registered 65.1 percent, down 2.8 percentage points from the October reading of 67.9 percent according to the ISM. The Prices paid Index registered 65.4 percent, down 0.1 percentage point compared to the October reading of 65.5 percent. The New Export Orders Index registered 57.8 percent, an increase of 2.1 percentage points compared to the October reading of 55.7 percent.

Gold & the USDX: Correlations

It’s crunch time for gold and the U.S. Dollar Index (USDX), as they find themselves at a crossroads. As of Wednesday, the USDX is holding its lows but wants to move up, thus invalidating its breakdown. And gold? Well, gold did gain a bit today, but it’s essentially jumping up in an elevator that’s moving down – it just doesn’t have enough steam to break out.

While it’s been the traditional view that when the US Dollar declines, gold increases in price, we find that’s not always the case when comparing historical patterns. And just to watch the price of gold itself when making a buying decision is not enough. One needs to pay attention to the price of gold in relation to moves in the USDX – that helps to indicate the bottom.

Let’s pay attention to and examine what gold does when the USDX moves either up or down.

ChartDescription automatically generated

Yesterday we saw the first daily close below the September low. This means that the breakdown is not confirmed, and if the USDX closes below this level also today and tomorrow, it will be. However, at the moment of writing these words, the USDX is trying to rally back up – if it is successful, gold would be likely to plunge.

Still, to be precise, since gold just managed to rally above the declining resistance line, it might have enough momentum to reach the September low (at about $1,850) before turning south once again.

The breakdown in the USDX is not confirmed and it could be invalidated any hour now, but… What if it’s not? What if – despite invalidation being likely and the USDX moving up – what we’ve seen in the last couple of months was not the broad bottom in the USD Index, and the latter is going to decline from here?

These are important questions. First of all, if the above is indeed the case, it won’t mean that technical analysis became useless or less useful. It would mean that a different part of history is likely to be repeated to a certain extent, and not the ones that I featured and referred to previously.

ChartDescription automatically generated

The above wouldn’t invalidate the very bullish implications of the long-term breakout in the USDX in 2015.

So, what would be likely to happen if the USDX declines in the next few days?

Chart, histogramDescription automatically generated

In this case, it seems likely to me that the USDX would repeat its 2017 – 2018 decline to some extent. The starting points of the declines (horizontal red line) as well as the final high of the biggest correction are quite similar. The difference is that the correction was now smaller than it was in 2017.

Since back in 2018, the USDX’s bottom was at about 1.618 Fibonacci extension of the size of the correction, we could expect something similar to happen this time. Applying the above to the current situation would give us the proximity of the 90 level as the downside target.

But would gold soar in this case? Well, if the early 2018 pattern was being repeated, then let’s check what happened to precious metals and gold stocks at that time.

In short, they moved just a little higher after the USDX’s breakdown. We marked the moment when the U.S. currency broke below its previous (2017) bottom with a vertical line, so that you can easily see what gold, silver, and GDX were doing at that time. They were just before a major top. The bearish action that followed in the short term was particularly visible in case of the miners.

Consequently, even if the USD Index is to decline further from here (and – again – the breakdown could be invalidated shortly), then the implications are not particularly bullish for the precious metals market.

If you’d like to read more details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.

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

Przemyslaw Radomski, CFA
Founder, Editor-in-chief
Sunshine Profits: Effective Investment through Diligence & Care

* * * * *

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

USD/CAD Daily Forecast – Another Test Of Support At 1.2930

USD/CAD Video 02.12.20.

Canadian Dollar Attempts To Gain More Ground Against U.S. Dollar

USD/CAD continues its attempts to settle below the support at 1.2930 while the U.S. dollar remains under pressure against a broad basket of currencies.

The U.S. Dollar Index did not manage to settle above the resistance at 91.50 and gained downside momentum. Currently, the U.S. Dollar Index is testing the nearest support level at 91.15. The American currency is under pressure on the foreign exchange market as traders decrease their purchases of safe haven assets on signs that U.S. may finally deliver a new round of economic stimulus.

U.S. Treasury Secretary Steven Mnuchin has recently stated that U.S. President Donald Trump will sign the coronavirus bill proposed by Senate Majority Leader Mitch McConnell, but it remains to be seen whether Democrats will be happy with the deal that they rejected in the past.

If the U.S. Dollar Index declines below the support at 91.15., it will move towards the next support level at 91 which will be bearish for USD/CAD.

Today, the U.S. released ADP Employment Change report which showed that private businesses hired 307,000 workers in November. The report was worse than analyst expectations and highlighted the negative impact of the second wave of virus. Perhaps, the worsening situation on the job front will provide an additional incentive for Republicans and Democrats to reach a compromise deal.

Technical Analysis

usd cad december 2 2020

USD to CAD is currently testing the nearest support level at 1.2930. This support level has already been tested several times in recent trading sessions and proved its strength.

In addition, this support level was tested back in November. At that time, USD to CAD received strong support at 1.2930 and quickly rebounded towards 1.3100.

If USD to CAD manages to settle below this key support level, it will gain downside momentum and get to the test of the next support level at 1.2900.

On the upside, USD to CAD must get above the resistance area at 1.2985 – 1.3000 to have a chance to develop upside momentum. A move above this level will push USD to CAD towards the next resistance near the 20 EMA at 1.3025.

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

E-mini S&P 500 Index (ES) Futures Technical Analysis – Strengthens Over 3677.50, Weakens Under 3592.00

December E-mini S&P 500 Index futures are trading flat at the mid-session as fewer-than-expected private job additions in November added to concerns about the near-term pressure on the economy.

The weakness in the private jobs report is the latest sign that soaring new infections and business restrictions were hampering the labor market’s recovery. The more crucial employment report is expected on Friday.

At 16:45 GMT, December E-mini S&P 500 Index futures are trading 3660.25, down 0.25 or -0.01%.

Private payrolls grew by 307,000 in November, a decline from the 404,000 the previous month, ADP reported. The total was well below the Dow Jones estimate of 475,000. Hospitality led the way in job creation, adding 95,000 positions despite increasing pressure on bars and restaurants as coronavirus cases rise.

Daily December E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 3677.50 will signal a resumption of the uptrend. The main trend will change to down on a trade through the nearest main bottom at 3225.00.

The minor trend is also up. A trade through 3592.25 will change the minor trend to down. This will also shift momentum to the downside.

The first minor range is 3592.25 to 3677.50. Its 50% level at 3634.75 is support.

The second minor range is 3506.50 to 3677.50. Its 50% level at 3592.00 is a second support zone. This is also a potential trigger point for an acceleration to the downside.

Daily Swing Chart Technical Forecast

The direction of the December E-mini S&P 500 Index futures contract into the close is likely to be determined by trader reaction to 3634.75.

Bullish Scenario

A sustained move over 3734.75 will indicate the presence of buyers. This could lead to a retest of 3677.50 and a potential acceleration to the upside.

Bearish Scenario

A sustained move under 3734.75 will signal the presence of sellers. This could trigger a sharp break into the support cluster at 9592.25 to 3592.00. Look for a technical bounce on the first test of this area.

If 3592.00 fails as support then look for a potential acceleration into the next minor bottom at 3542.25.

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

S&P 500 Price Forecast – Stock Markets Continue Grind Higher

The S&P 500 has pulled back just a bit during the trading session on Wednesday in the Globex session, but as the cash market opened in New York City, we started to see buyers jump back in. All things being equal, the market is trying to break out to the upside and with monetary policy been so loose it is likely that we will continue to try to go higher. Pullbacks will be supported all the way down to the 3600 level, as it was a large, round, psychologically significant figure that also offer both support and resistance multiple times.

S&P 500 Video 03.12.20

Based upon the measured move from previous trading, we should see about 400 points, from the breakout at the 3600 level. Ultimately, this is a market that should go looking towards the 4000 handle. The 4000 level course will be a psychological level that a lot of people will be paying attention to and I would anticipate that it would be a big reaction just waiting to happen. Ultimately, I think this is a market that will be noisy but there should be plenty of opportunities to get long based upon monetary policy, stimulus, and of course the post vaccine trade.

All things being equal, if we get a Republican Senate confirmed in January, that will keep the US government out of the equation as well and could send this market higher based upon a bit of a “Goldilocks situation.” The 50 day EMA underneath should be massive support as well, ultimately, I think that there is no way to short this market anytime soon. With this, look for value and then take advantage of it.

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

Silver Price Forecast – Silver Markets Stalling

Silver markets have gone back and forth during the trading session on Wednesday as we are testing the 50 day EMA. This is obviously a widely followed indicator, so it should not be a huge surprise that we are sitting here. Furthermore, we are right at the $24 level which is essentially in the middle of the overall consolidation, and furthermore we have seen a massive move to the upside on Monday that people will be looking to digest the gains from. Ultimately, I think a short-term pullback is very likely.

SILVER Video 03.12.20

Having said that, the US dollar is on its back foot, and that should continue to boost the value of the silver market as well as other commodities. I think buying on the dips continues to work and people are starting to build up a bit of a potential long-term position. Ultimately, if we can break above the top of the candlestick for the trading session on Wednesday, that also sends this market higher but keep in mind that the next couple of days could be a bit noisy due to the fact that the jobs number comes out on Friday. Between now and then, markets might be a bit quiet but as the EUR/USD pair has broken the massive resistance barrier at the 1.20 level, that suggests that currency moves alone could drive silver higher.

Underneath, the 200 day EMA sits just below the $22 level which is the bottom of the overall consolidation range, so I think in general this is likely to continue to offer a bit of a “floor” in the market going forward. Furthermore, the 38.2% Fibonacci retracement level is in this general vicinity.

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

Crude Oil Price Forecast – Oil Bounces After Rumored OPEC Progress

WTI Crude Oil

The West Texas Intermediate Crude Oil market initially pulled back a bit during the trading session on Wednesday but has rallied despite the fact that there has been less than stellar gasoline builds in the United States. This is because there are rumors flying around that OPEC is making a certain amount of progress in the talks when it comes to production cuts. If that is going to be the case, then it is likely that this market could continue to go higher. All things being equal, the market continues to find buyers underneath and I do believe that we will try to make a move towards the $50 level.

Crude Oil Video 03.12.20

Brent

Brent markets have rallied quite significantly during the trading session as well, as the $47.50 level has offered support, as it was previous resistance. Ultimately, this is a market that should continue to go looking towards the $50 level. The $50 level is of course a large, round, psychologically significant figure, but I think that we probably have more strength going higher and above that level. All things being equal, I think that it is obvious that the “reflation trade” is in fact in full effect, and that should continue to drive oil prices higher. Over the next couple of days, we could see a little bit of volatility, but longer-term I do believe that people will be buying regardless. The 50 day EMA is getting ready to cross above the 200 day EMA, which longer-term traders will be paying attention to.

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

Oil Gets Back Above The $45 Level As Crude Inventories Decline

Oil Video 02.12.20.

Crude Inventories Decrease By 0.7 Million Barrels

EIA has just released its Weekly Petroleum Status Report which indicated that crude inventories decreased by 0.7 million barrels. The recent API Crude Oil Stock Change report indicated that crude inventories increased by 4.1 million but the market typically relies on EIA data.

Gasoline inventories grew by 3.5 million barrels, and it looks like demand for gasoline is set to remain weak in the last month of this year. Distillate fuel inventories increased by 3.2 million barrels.

Interestingly, U.S. domestic oil production grew from 11 million barrels per day (bpd) to 11.1 million bpd. The potential growth of U.S. domestic oil production is one of the main questions for oil traders at the end of this year.

Previously, most analysts, including EIA, believed that U.S. oil production will remain close to 11 million bpd. However, oil managed to get to the $45 level and may move even higher, pushing U.S. producers to increase oil output in order to boost their revenues.

U.S. production has just made its first step away from the 11 million bpd level, but it may gain more momentum in case oil remains above the $45 level.

Norway Will Increase Its Oil Production In 2021

While OPEC+ continues negotiations about the potential extension of current oil production cuts, Norway announced that its production cuts would expire at the end of this year.

Norway is not a member of OPEC+, and its government-mandated production cuts were voluntary.

However, Norway’s decision may complicate OPEC+ negotiations as many OPEC+ members are not happy to watch how their market share is decreasing while others increase their oil production.

The market clearly needs a three-month extension of current production cuts, but even a decision to gradually increase production may also provide some support to prices.

OPEC+ must do everything to avoid a complete failure of current negotiations which may lead to a brutal sell-off. OPEC+ members will resume their negotiations tomorrow, and oil will likely be very volatile during the remaining trading sessions of this week.

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

Natural Gas Price Forecast – Natural Gas Continue to Consolidate

Natural gas markets initially tried to rally during the trading session on Wednesday but pulled back a bit from this downtrend line that I have drawn on the chart. The $3.00 level above is significant resistance, and we have pulled back from that area that was a previous gap. Ultimately, I do think that the 50 day EMA flattening out suggests that the market is trying to figure out where to go next, but at this point in time if we can break above the $3.00 level, we would then go looking to fill that gap. Ultimately, I think that the market not only break that level but goes higher.

NATGAS Video 03.12.20

On pullbacks at this point in time natural gas should be relatively well supported due to the fact that the cold weather is certainly still going to be an issue in January, but we have a few more weeks before we see some type of selloff due to the cyclicality trade. At this point, I think that we could make an explosive move to the upside and go looking towards the $3.40 level. Whether or not we can break above there is a completely different question. As far as selling is concerned, I simply have no interest in doing so anytime soon, but once we start trading the spring contracts, I would be more than willing to do so.

This contract currently is the January contract, which is probably one of the highest demand months out of the year. That being said, one drag on demand is the fact that the economy in the United States is slowing down but the heating demand is still going to be there.

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

Gold Price Forecast – Gold Markets Sluggish But Still Look Bullish

Gold markets have rallied slightly during the trading session on Wednesday but have given back some of the extensions of gains. That being said, the market is likely to see pullbacks that will be bought into. The 200 day EMA which crossed during the previous session, so it should offer a certain amount of support. Alternately, if we break above the top of the candlestick for the trading session on Wednesday, that could be a buying opportunity as well. Keep in mind that the US dollar continues to see massive amounts of selling, and that could continue to put upward pressure on gold.

Gold Price Predictions Video 03.12.20

Furthermore, there seems to be the massive “reflation trade” out there, and therefore I think it is very likely that we will continue to see commodities go higher. Ultimately, if the US dollar continues to fall from here, it is very likely that commodities in general will get a bit of a boost. The next major resistance level is closer to the $1850 level, and that of course we have the 50 day EMA above there. All things been equal though, this is a market that probably has to spend a certain amount of time building up a bit of a base in order to go long again.

Longer-term, I believe that gold has a bright future, due to the fact that central banks around the world continue to loosen monetary policy and it is not just the Federal Reserve at this point. Underneath, I believe that the recent lows will continue to be supportive, as we have seen such a nice three bar reversal at this point in time.

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

EUR/USD Mid-Session Technical Analysis for December 2, 2020

The Euro is trading slightly lower against the U.S. Dollar at the mid-session on Wednesday after giving back earlier gains. The current price action suggests a potentially bearish closing price reversal top may be forming. This isn’t a trend changing event, but it could be an indication that the selling is greater than the buying at current price levels. Time has also put the Euro inside the window of time for a reversal.

At 15:38 GMT, the EUR/USD is trading 1.2066, down 0.0003 or -0.02%.

In other news, Euro Zone producer prices rose more than expected month-on-month in October and unemployment fell as the economy continued to recover before the second wave of the COVID-19 pandemic struck, data showed Wednesday.

German government bond yields held steady on Wednesday, as expectations of fresh easing measures by the ECB offset a boost in risk sentiment triggered by hopes of a quick approval of a coronavirus stimulus plan in the United States.

In the U.S., private payrolls grew at their slowest pace since July amid a deceleration in large business hiring for November, ADP’s monthly payrolls report said Wednesday.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing. The uptrend was reaffirmed earlier in the session when buyers took out yesterday’s high, however, there wasn’t much of a follow-through to the upside, and indicating momentum may be slowing.

An intraday trade through 1.2088 will indicate the buying is getting stronger. The main trend will change to down on a move through 1.1800.

The EUR/USD is also up seven sessions from its last swing bottom. This puts it inside the window of time for a closing price reversal top.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD is likely to be determined by trader reaction to yesterday’s close at 1.2069.

Bullish Scenario

A sustained move over 1.2069 will indicate the presence of buyers. This could lead to a retest of the intraday high at 1.2088. Taking it out could create the upside momentum needed to challenge the April 30, 2018 main top at 1.2138.

Bearish Scenario

A sustained move under 1.2069 will put the EUR/USD in a position to form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day counter-trend sell-off with the next potential downside target 1.1944 to 1.1910.

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

Visa Could Rally 40% in 2021

Dow component Visa Inc. (V) price action has tracked the evolution of world economies during the COVID-19 pandemic, with credit and debit card spending plunging in the first quarter and recouping a good share of losses during the second and third quarters. Surprisingly, U.S. sales numbers are ticking higher in the fourth quarter despite surging infections around the world, forcing analysts to lift 2021 growth targets, especially in the United States.

Visa Breakout Pattern

Better yet, Visa has completed the last stage of a cup and handle pattern, with a breakout having the potential to lift the digital payments giant at least 30% to 40% in 2021.  Accumulation readings have already hit new highs, highlighting growing optimism about economic growth under a Biden administration. Even so, the winter of 2020 – 21 could throw a few curveballs, especially if hospitals get overwhelmed or the U.S. election dispute takes an unexpected turn.

Visa reported that November spending levels were similar to October on Wednesday, with U.S. payments volume up 6% year-over-year. Debit rose a healthy 19%, highlighting the switch from paper checks to digital transactions for everyday goods, while Credit declined 5%, indicating that more customers were using savings to pay for things. Unfortunately, other countries didn’t fare as well, with the United Kingdom, Italy, and Germany reporting lower payment volumes.

Wall Street And Technical Outlook

Wall Street has been wildly bullish on Visa for years, with a current ‘Strong Buy’ rating based upon 14 ‘Buy’ and 4 ‘Hold’ recommendations. No analysts are recommending that shareholders close positions and move to the sidelines at this time. Price targets now range from a low of $195 to a Street-high $250 while the stock opened Wednesday’s U.S. session about $13 below the median $223 target. This placement should support plenty of upside after a breakout.

The stock topped out at 214 in February after a multiyear uptrend and sold off more than 40% during the pandemic decline. A two-legged recovery wave reached the prior high in September, giving way to a secondary downdraft that found support at the 200-day moving average. Price action bounced back to the prior peak in November, ahead of narrow sideways action that has now completed weekly- and daily-scale cup and handle breakout patterns.

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

Disclosure: the author held no positions in aforementioned securities at the time of publication.

Silver Price Daily Forecast – Silver Pulls Back After Yesterday’s Rally

Silver Video 02.12.20.

Silver Tests The Support At The 20 EMA

Silver failed to settle above the 50 EMA at $24.10 and declined towards the 20 EMA at $23.80 while the U.S. dollar was mostly flat against a broad basket of currencies.

The U.S. Dollar Index received strong support near 91.15 and tested the nearest resistance level at 91.50. However, the U.S. Dollar Index failed to gain sufficient upside momentum and declined towards 91.30.

If the U.S. Dollar Index manages to settle below the support at 91.15, it will gain downside momentum and move towards the next support at 91 which will be bullish for silver.

Gold is currently trying to settle above the nearest resistance level at $1815. If this attempt is successful, gold will move towards the next resistance at the 20 EMA at $1840 which will be bullish for silver and other precious metals.

Gold/silver ratio made an attempt to settle below the support at 75.50 but did not manage to gain sufficient downside momentum and returned back to 76.50. If gold/silver ratio declines below the support at 75.50, silver will get a boost.

Interestingly, the restart of U.S. stimulus negotiations failed to provide much support to silver and gold price today. At this point, it looks like precious metals traders are skeptical about near-term chances for a deal between Republicans and Democrats.

Technical Analysis

silver december 2 2020

Silver lost upside momentum after yesterday’s rally and is currently testing the support at the 20 EMA at $23.80. If silver manages to settle below this level, it will head towards the next support level at $23.30.

In case silver settles below the support at $23.30, it will gain downside momentum and head towards the next support level at $22.90.

On the upside, silver needs to get above the resistance at the 50 EMA at $24.10 to have a chance to develop additional upside momentum. The 50 EMA level continues to serve as a major obstacle on the way up, and silver will likely need more bullish catalysts to settle above this level.

If silver gets above the 50 EMA, it will head towards the next resistance level near $24.60. A move above $24.60 will open the way to the test of the resistance at $25.00.

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

USD/JPY Price Forecast – US Dollar Tests 50 Day EMA Again

The US dollar has shot higher during the trading session on Wednesday but has given back the gains as we approached the 50 day EMA. Ultimately, the 50 day EMA has been an area that continues to show a lot of resistance, extending all the way to the 200 day EMA. Furthermore, there is also a downtrend line above that could be an issue as well so pay close attention to both of those areas for potential selling opportunities. The shape of the candlestick is somewhat bullish, and it is worth noting that the last couple of lows have gotten higher, but we are still very much in a longer term downtrend.

USD/JPY Video 03.12.20

All things being equal, I think that we are rallying due to the fact that the market is starting to see more of a “risk on” type of move. If that is going to be the case, then we probably could return to the previous “risk appetite sentiment indicator” that this pair tends to be. However, the Federal Reserve is likely to continue the loosening of monetary policy and possibly even be joined by Congress with stimulus, and therefore it should drive down the value of the US dollar overall.

Granted, this is a very messy area that we are looking at the time, so it might be best to simply wait for the market to make its longer-term decision before putting a lot of money to work. As things stand right now though, if I were forced to trade this pair it would be to the short side every time it rallies and show signs of exhaustion.

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