E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – 23571 – 23796 to Major Area to Overcome

June E-mini Dow Jones Industrial Average futures continue to climb on Wednesday and are currently sitting near its intraday high at the mid-session. The catalysts behind the rally are hopes the coronavirus outbreak in the United States was close to its peak and expectations that Congress will inject hundreds of billions more in the battered economy.

At 16:42 GMT, June E-mini Dow Jones Industrial Average futures are trading 23123, up 632 or +2.81%.

After an early surge, the intraday volatility has slowed ahead of the release of the minutes from the last Federal Reserve emergency meeting. Investors hope the Fed will shed some light on whether it is prepared to stimulate the economy further.

Daily June E-mini Dow Jones Industrial Average

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 23477 will signal a resumption of the uptrend. The main trend will change to down if sellers take out the last main bottom at 20500.

The main range is 29506 to 18086. Its retracement zone at 23796 to 25144 is the primary upside target. This zone is controlling the longer-term direction of the Dow.

The intermediate range is 26962 to 18086. The Dow is currently testing its retracement zone at 22524 to 23571.

The two zones combine to form a resistance cluster at 23571 to 23796.

The minor range is 20500 to 23477. Its 50% level or pivot at 21989 is a potential downside target.

The short-term range is 18086 to 23477. Its retracement zone at 20782 to 20145 is the most important downside target.

Daily Technical Forecast

Based on the early price action and the current price at 23123, the direction of the June E-mini Dow Jones Industrial Average into the close is likely to be determined by trader reaction to the 50% level at 22524.

Bullish Scenario

A sustained move over 22524 will indicate the presence of buyers. This could trigger a rally into a cluster of potential resistance levels including 23477, 23571, 23634 and 23796. Overtaking 23796 could trigger a surge into 24230 and 24514.

The daily chart starts to open up over 24514.

Bearish Scenario

A sustained move under 22524 will signal the presence of sellers. This is followed by a 50% level at 21989 and a pair of uptrending Gann angles at 21524 and 21158.

Gold Price Futures (GC) Technical Analysis – Trader Reaction to $1659.30 – $1639.60 Will Set the Late Tone

Gold futures are trading better at the mid-session on Wednesday as investors await the release of the Federal Reserve monetary policy meeting minutes at 18:00 GMT. Traders will be looking at the minutes for clues as to whether policymakers are prepared to make any more stimulus moves to compact the impact of coronavirus on the economy.

At 16:00 GMT, June Comex gold is trading $1686.90, up $3.20 or +0.19%.

Gold traders are also reacting to intraday weakness in the U.S. Dollar. The greenback has given back nearly all of its earlier gains after investment sentiment turned bullish following positive statement about the slowing of new cases of the coronavirus at U.S. hot spots.

The shift in investor sentiment is also helping to drive stock prices higher. Today marks one of the few days over the past month where gold and stocks have not moved locked step.

Daily June Comex Gold

Daily Technical Analysis

The main trend is up according to the daily swing chart, but yesterday’s closing price reversal top may be an early indication that momentum is getting ready to shift to the downside.

A trade through $1742.60 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down if sellers take out the last swing bottom at $1576.00.

The short-term range is $1576.00 to $1742.60. Its retracement zone at $1659.30 to $1639.60 is the primary downside target.

Daily Outlook

On the downside, the nearest targets are a short 50% level at $1659.30 and an uptrending Gann angle at $1656.00. Since the main trend is up, look for buyers to show up on a test of this area.

If $1656.00 fails as support then look for the selling to possibly extend into the Fibonacci level at $1639.60. This is also possible support.

Crossing to the weak side of the Fibonacci level is likely to trigger a further break into the uptrending Gann angle at $1616.00.

On the upside, the first target is a minor pivot at $1706.70. This is followed by a steep uptrending Gann angle at $1736.00 and the closing price reversal top at $1742.60.

Side Notes

Look for volatility and a possible two-sided trade at 18:00 GMT following the release of the Fed minutes.

We could also be looking at a wicked 2-sided trade. If the Fed promises more stimulus then prices could whip-saw over the short-run. This will be good news for long-term investors, but not necessarily for short-term traders especially if the stock market soars on the news.

USD/CAD Daily Forecast – Canadian Dollar Gains Ground Amid Risk-On Mode In The Markets

USD/CAD Video 08.04.20.

Stronger Oil And Optimistic Equity Markets Boost Canadian Dollar

USD/CAD continues to stay below the 20 EMA level as optimism in the global markets support riskier assets like the Canadian dollar.

Earlier, the U.S. dollar tried to rebound, and the U.S. Dollar Index is still above the 100 level. However, the comments of Dr. Anthony Fauci, who is the director of the U.S. National Institute of Allergy and Infectious Diseases and a key speaker during the current coronavirus crisis, helped riskier assets.

According to Dr. Fauci, the U.S. health officials are already developing plans on how the country will return to normal life in case the virus containment measures prove to be effective.

No exact steps are expected at this time, and current social distancing measures will be continued, but the U.S. needs a plan on how to re-open the economy since each day spent in a lockdown puts pressure on the economy.

Another catalyst playing in favor of the Canadian dollar today is the strength on the oil price front. Oil is gaining ground ahead of the OPEC+ meeting despite the increase in oil inventories.

Oil production is an important part of the Canadian economy so oil price strength often translates into the Canadian dollar strength.

While speculative traders could make some bets on oil ahead of the meeting and cause volatility in USD/CAD, the real action will take place tomorrow when the results of the OPEC+ meeting will be made public.

Technical Analysis

usd cad april 8 2020

USD/CAD has breached the 20 EMA level and continues its downside move. The next support for the pair is located near the recent lows at 1.3925. USD/CAD has already made an attempt to test this level but received material buyer support near 1.3950.

If the support at 1.3925 is breached to the downside, the next support level for the pair is located at the 50 EMA at 1.3850. This move would be possible if oil prices rally in case of a good oil production cut deal.

On the upside, the nearest resistance is at 20 EMA at 1.4085. In case this level is breached to the upside, the pair could head towards the next material resistance near the 1.4250 level.

Oil Is Up Ahead Of OPEC+ Meeting Despite Increase In Inventories

Oil Video 08.04.20.

Oil Inventories Increase Further

Oil had a choppy trading session today as traders prepared themselves for OPEC+ meeting which is scheduled for April 9, 2020.

Previous days were full of media reports that described positions of various oil producers ahead of the meeting. Today, the media is mostly silent so we can assume that the period of “bargaining through media” is over and the oil market players are finalizing their true negotiating positions ahead of the meeting.

Yesterday, API Crude Oil Stock Change data showed an increase in oil inventories of 11.9 million barrels. Today, the EIA Petroleum Inventories showed an increase of 15.2 million barrels. It is not surprising that inventories continue to increase as demand is under pressure from virus containment measures.

Importantly, the EIA report indicated a decrease in oil production. Saudi Arabia and Russia have indicated that they want to see U.S. cutting its oil production, or no production cut deal would be reached.

The U.S. has problems with a coordinated production cut since oil is produced by many independent companies while anti-trust laws make it hard to cooperate in order to boost oil prices.

If the U.S. production falls “automatically”, the U.S. side can use it as an argument that the country also participates in production cuts.

EIA Expects WTI oil at $29 in 2020

The U.S. Energy Information Administration has recently published its short-term energy outlook in which it stated that it expected that Brent oil prices would average $33 per barrel in 2020, while WTI oil prices would average $29 per barrel.

The previous forecast was decreased by $10 as the hit to oil demand was bigger than expected.

The recent high for WTI oil was near the $29 level, and it remains to be seen whether an oil production cut deal could help oil prices gain a foothold above this level.

At this point, it looks like the destruction of oil demand caused by virus containment measures will lead to sustained pressure on oil prices in the coming months even if a production cut deal is reached.

In this light, EIA projections seem realistic as high inventories will continue to impact oil market even when the situation with supply/demand balance gets better.

 

Natural Gas Price Fundamental Daily Forecast – Supported by Cold Temperatures, Noted Production Cuts

Natural gas futures are trading slightly lower on Wednesday after another attempt to breakout to the upside failed to draw enough buyers to continue the four day rally. The price action suggests position-squaring ahead of Thursday’s U.S. Energy Information (EIA) weekly storage report and major production decision by OPEC and its allies.

At 14:00 GMT, May natural gas futures are trading $1.844, down $0.008 or -0.43%.

Helping to underpin the market this week and drive prices higher is the 15-day forecast that calls for the return of cold temperatures, and noted production cuts.

Production Concerns Move to Forefront

Overtaking the call for colder temperatures over the next two weeks are signs of a pullback in production.

EBW Analytics Group analysts said an increase in weather-driven demand expectations has played a part in the recent rally, which included a 12.1 percent gain for the May contract in Tuesday’s session. But the market is also reacting to the prospect of production declines.

“Mounting evidence that oil storage could be completely full in less than a month drove prices much higher than would otherwise have been expected,” the EBW analysts said in a note to clients on Wednesday. “Our model indicates that once tanks top out, production of associated gas could fall by as much as 3.5-5.5 Bcf/d in 90 days.”

“Decline in supply is only half of the equation; demand is declining more rapidly. For now, though, the market is likely to continue focusing primarily on supply. The May contract is likely to probe higher again today. Profit-taking ahead of tomorrow’s weekly storage report, though, may limit today’s gains.”

Bespoke Weather Services Near-Term Outlook

The European and American datasets “did agree on a minor warmer change early next week …and we adjusted our forecast accordingly, being a shorter range call, while leaving the rest of the forecast most unchanged,” Bespoke said. “…We are still confident in a strong cold outbreak for mid-April on the way, especially” for days six through 10 of the outlook.”

Short-Term Weather Outlook

According to NatGasWeather for April 8 -14, “Mild to warm conditions will again cover the northern U.S. today with highs of 50s and 70s for light demand. Very warm conditions continue across the southern U.S. with highs of 70s and 80s. A weather system is slowly tracking through California and into the Southwest with rain and snow, but with only modest cooling. The first in the series of stronger cold shots will sweep across the Midwest and Northeast Thursday through Saturday with lows of 20s and 30s, followed by more impressive systems next week with lows of 0s to 20s. Overall, low demand today then increasing to high in the coming week.

Daily Forecast

The main trend is up, but the market ran into resistance at $1.875 to $1.959. Buyers will have to overcome this zone in order to signal a resumption of the rally.

If the early selling pressure persists then look for a break back into a support zone at $1.719 to $1.673.

Fundamentally, a tweak toward warmer is putting some pressure on prices, but not enough to kill the uptrend. The current weather forecast calling for cold is still enough to provide support.

Lower production is also providing support, while demand destruction due to the coronavirus could put a cap on the rally, but this would depend on how long the impact of the virus is expected to last.

Once the number of new cases starts to flatten or tops out, traders will be able to predict with some accuracy how long normal demand will be impacted.

USD/JPY Price Forecast – US Dollar Rallies Against Japanese Yen In Risk On Trading

The US dollar has gone back and forth during the trading session on Wednesday, as we continue to dance around the 50 and the 200 day EMA indicators. At this point, the market doesn’t necessarily look as if it is ready to go anywhere anytime soon, so I believe that the market will eventually have to make up its mind. In the short term though, the pair is better used as an indicator of Japanese yen strength or weakness. In other words, this pair is falling it means that the Japanese yen is strengthening, and you should be looking to buy the Japanese yen against currencies that are closer to support or resistance.

USD/JPY Video 09.04.20

At this point, we need to see this pair move a bit before we get into an area that is simply the same thing as flipping a coin. In other words, I would like to see this pair form a selling signal near the ¥105 level, or perhaps the ¥111 level. As we are in the middle of this big range, so therefore it’s very difficult to imagine a scenario that the market should be traded with any type of size. That doesn’t necessarily mean that the chart is useless, like I said it functions as a nice secondary indicator. Notice that the moving averages are essentially flat as well, so this is a very “neutral” type of situation. At this point in time, I will keep you up-to-date as to how I’m using this chart right now it shows neutrality.

GBP/USD Price Forecast – British Pound Continues to Stubbornly Rally

The British pound has pulled back just a bit during the trading session on Wednesday, only to turn around and show signs of strength again. That being said, there is a lot of noise just above, so you should pay attention to the area between here and 1.25, as it could be rather resistive. While it looks very positive, the reality is that you can’t necessarily go long until you clear that barrier. Not only is 1.25 going to be psychologically resistive, but it is also the scene of the 61.8% Fibonacci retracement level. In other words, there will be a lot of technical interest in this pair at that area.

GBP/USD Video 09.04.20

To the downside, it certainly looks as if there are still buyers and at this point, we could be forming a bullish flag. The bullish flag measures for roughly 1000 pips, which looks almost identical to the GBP/JPY pair. If that’s going to be the case, then the British pound may be one of the better performers over the next couple of weeks. If that’s going to be the case, then you obviously wish to be long of the British pound in general, even though the so-called “death cross” just form, but quite frankly that’s a nonsensical indicator as it tends to happen either after the move or so far into the move that it is essentially irrelevant. Because of this, I believe that we could see an explosive move to the upside. To the downside, it looks as if the 1.22 level will continue to offer massive support.

GBP/JPY Price Forecast – British Pound Continues to Pressure the Upside

The British pound initially pulled back slightly during the trading session on Wednesday, but then found buyers as more of a “risk on” type of attitude occurred in the markets. Because of this, it looks as if the pair is going to try to go looking towards the ¥135 level. If we can break above the ¥135 level, then it allows for the market to continue going higher. It certainly looks as if the market is resilient and stubborn, and therefore I think it’s only a matter of time before we break out. Certainly, if the stock markets around the world continue to try to rally, that could be reason enough for this market to go to the upside.

GBP/JPY Video 09.04.20

Obviously, the exact opposite can be true and perhaps the market could pull back a bit. If it does, the ¥135 level will offer significant resistance yet again, and the market could fall as low as ¥133. Having said all of that, it looks less likely after the last couple of days than it did previously. Because of this, it looks as if there is a significant amount of pressure building up, and we could kick off a rather significant move. Keep in mind that the gap at the ¥137 level has been filled already, so it is possible that this market will continue to go beyond that, perhaps paying attention to the potential bullish flag that we are forming and if that’s the case, we could be looking at a massive move, possibly even to the 100% Fibonacci retracement level. That would be ¥145.

EUR/USD Price Forecast – Euro Looking for Footing

The Euro has pulled back a bit during the trading session on Wednesday, but then found enough support at the 1.08 level to turn things back around to form a bit of a more bullish candle than initially thought. However, it should be kept in the back of your mind that the Euro tends to be very choppy against the US dollar, so the fact that we are tightening of the range can mean that we are either building up inertia for the next major move, or we are simply getting back to the norm, at this point it’s a bit difficult to tell because we don’t have the benefit of volume in the Forex markets.

EUR/USD Video 09.04.20

All that being said, we need to look for the most logical place for the market to go looking towards, and for me at this point I suspect it is somewhere near the 1.10 level. That will probably attract enough attention on both sides of the market that it could be “fair value” going forward. At this point I believe that you can use these as that idea of US dollar strength or weakness, as it is very highly correlated to the US Dollar Index. At this point in time, the market simply looks as if it is winding back and forth so it’s a bit difficult to trade this market as we are still trying to figure out exactly what it’s going to be longer-term. I would advise state away from the EUR/USD pair of the next several sessions, although I do believe we will try to find our way towards the 1.10 level given enough time.

Crude Oil Price Update – Testing Key Support Zone at $24.20 – $23.04 Ahead of EIA Report, OPEC Decision

U.S. West Texas Intermediate crude oil futures are trading higher on Wednesday but basically treading water shortly after the regular session opening, and ahead of today’s Energy Information Administration weekly inventories report at 14:30 GMT, and Thursday’s major OPEC+ announcement.

Today’s EIA report is expected to show a 9.8 million barrel build. Gasoline stockpiles are also expected to spike higher with the numerous lockdowns in the United States curtailing driving activity and lowering demand. Traders are looking for a 5.4 million barrel build in gasoline stockpiles.

Late Tuesday, the American Petroleum Institute (API) reported an 11.9 million barrel build. Traders were looking for an 8.4 million barrel build during the week-ending April 3. Gasoline stockpiles jumped by almost 9.5 million barrels, while distillate inventories declined by 177,000 barrels.

At 13:52 GMT, May WTI crude oil futures are trading $24.87, up $1.24 or +5.25%.

Daily May WTI Crude Oil

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through $29.13 will signal a resumption of the uptrend. The main trend will change to down on a trade through the last main bottom at $19.27.

The short-term range is $19.27 to $29.13. Its retracement zone at $24.20 to $23.04 is potential support. The market is currently testing this zone. She the main trend is up, buyers could come in to defend this area. They are going to try to form a secondary higher bottom.

The main range is $36.70 to $19.27. Its retracement zone at $27.99 to $30.04 is the upside resistance target. It stopped the buying at $29.13 on April 3. This zone is controlling the near-term direction of the market.

Daily Technical Forecast

Based on the early price action and the current price at $24.87, the direction of the May WTI crude oil futures market the rest of the session on Wednesday is likely to be determined by trader reaction to the short-term 50% level at $24.20.

Bullish Scenario

A sustained move over $24.20 will indicate the presence of buyers. This could trigger a rally into a resistance cluster at $26.27 to $26.70.

Overtaking $26.70 will indicate the buying is getting stronger. This could trigger a rally into the main 50% level at $27.99, the minor top at $29.13 and the main Fibonacci level at $30.04. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $24.20 will signal the presence of sellers. This could trigger a break into the short-term Fib level at $23.04 and an uptrending Gann angle at $22.77. The angle is a potential trigger point for an acceleration to the downside with the next target angle coming in at $21.02. This is the last potential support angle before the $19.27 main bottom.

AUD/USD Price Forecast – Australian Dollar Continues to Press Resistance

The Australian dollar initially pulled back a bit during the trading session on Wednesday, but turned around to show signs of strength, as we reached towards the 0.62 level. At this point, the market breaking above that level and the 61.8% Fibonacci retracement level which is just above there could send the Australian dollar much higher. Remember, the Australian dollar is highly sensitive to risk appetite so pay attention to how the markets are perceiving that right now. The stock markets continue to be extraordinarily resilient, but the question will be what happens going forward, and whether or not some of the rally is a relief rally, or if it is something a bit more important.

AUD/USD Video 09.04.20

Australia is also highly sensitive to China, so if China starts to increase demand and output, that could be a good sign for the Australian dollar in general. That being the case, don’t expect any move to be easy to deal with, as there will be a lot of headlines out there that will cause concerns. Nonetheless, we do look as if we are trying to form some type of bottoming pattern, so on the breakout one would have to think that we will eventually go looking towards the 0.65 level, although how long it takes to get there could be just about anyone’s gas. To the downside, it looks as if the 0.60 level is now offering massive support. At this point, the Aussie certainly looks as if it is trying to build bullish pressure.

Silver Price Daily Forecast – The Current Upside Trend Remains Intact

Silver Video 08.04.20

Silver Holds Above $15.00 As Markets Believe That Virus Containment Measures Are Working

Silver continues its upside move after it breached the 20 EMA level several days ago. Equity markets remain optimistic which also helps precious metals in the current market environment.

The U.S. Dollar Index has corrected to the 100 level but does not experience additional downside despite the positive dynamics in riskier assets. Meanwhile, gold continues its attempts to get above the $1700 level, but so far these attempts have been futile.

I maintain my conviction that the whole precious metal segment will get a boost if gold manages to settle above $1700 as such a move will lead to an influx of additional money into the whole sector.

At this point, it is unclear which additional catalysts are necessary for precious metal upside.

On the one hand, another leg down in equity market will lead to increased safe haven buying. However, it remains to be seen whether precious metals will serve as safe haven assets in this scenario.

During the early stage of the current crisis, only the U.S. dollar and the U.S. Treasuries were seen as bullet-proof safe haven assets, while other asset classes often experienced downside on negative economic or healthcare news.

On the other hand, U.S. dollar weakness could be of great help for silver and other precious metals. Such a scenario demands continued improvements in investor confidence, which could come from stabilization on the virus front or from new economic stimulus.

Technical Analysis

silver april 8 2020

Silver stays above the 20 EMA and continues its upside trend. The nearest resistance is located at the 50 EMA level at $15.70. Silver has already made an attempt to get there, but this attempt was stopped at $15.50.

This was a very fast move, so silver had little chance to get above $15.70 without first settling below the resistance level. If the 50 EMA level is breached to the upside, silver will be able to get to pre-crisis levels at $16.50 and complete the rebound.

The nearest support for silver is at the 20 EMA level at $14.70. In case silver prices fall below this support level, silver will find itself back in the $13.80 – $14.70 range, although I’d expect some additional support in the $14.30 – $14.60 area.

Price of Gold Fundamental Daily Forecast – Bulls Hoping Fed Minutes Indicate Additional Stimulus

Gold futures are trading flat on Wednesday shortly after the regular session opening. The price action suggests investor indecision and impending volatility. A stronger dollar and a mixed performance in the global equity markets is likely putting a lid on prices, while the market remains supported over the long-run due to the tremendous levels of fiscal and monetary stimulus injected in the global financial system.

At 12:48 GMT, June Comex Gold is trading $1687.50, up $3.80 or +0.23%.

This week’s price action confirms that gold traders are being influenced by risk sentiment, but not the way some analysts want you to believe. Gold has been following the movement in the stock market nearly lockstep. That kills the argument that gold has been supported this week by safe-haven buying.

Besides the movement in the stock market and the U.S. Dollar, gold investors have probably been influenced by other outside factors such as the daily changes in the coronavirus numbers including the number of new cases and deaths. Other influences include the extended lockdowns, which are leading to the rolling out of further stimulus measures with Japan declaring a state of emergency while announcing a near $1 trillion stimulus package to soften the economic blow from the coronavirus.

Looking ahead, gold traders are likely to react to today’s release of the Federal Reserve Monetary Policy Minutes, which could offer clues as to further stimulus measures. The minutes could suggest further stimulus measures or other policy surprises that could trigger a volatile reaction in gold.

Thursday’s OPEC+ meeting outcome could also be a source of volatility. Some traders believe Saudi Arabia and Russia will hammer out a deal to curb production. Others are saying there will be no deal with the United States agreeing to limit production.

Daily Forecast

Over the short-run, the direction of the gold market will be controlled by investor risk appetite and safe-haven demand for the U.S. Dollar.

Gold could firm if stocks resume their rally and the dollar weakens as investors move money into riskier currencies. Gold prices are likely to weaken if stocks sell-off and investors move funds back into the U.S. Dollar.

Over the mid- to long-term, gold has tremendous upside potential due to quantitative easing and monetary stimulus efforts by global central banks.

E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 2652.50 Sets the Tone Today

June E-mini S&P 500 Index futures are called higher based on the pre-market trade on the hopes that the coronavirus outbreak was nearing its peak in the United States, despite the country posting a record single-day jump of more than 1,800 deaths.

On Tuesday, the benchmark index posted a potentially bearish chart pattern when a tumble in oil prices wiped out early gains in a market still feeding on regular doses of news on corporate layoffs, cutbacks and losses.

At 12:25 GMT, June E-mini S&P 500 Index futures are trading 2673.50, up 31.50 or +1.19%.

Traders are saying the early momentum is being fueled by upbeat comments from President Trump who said late Tuesday that the United States might be getting on the top of the “curve” of the outbreak. Meanwhile, crude oil traders have turned optimistic about the chances of Saudi Arabia and Russia reaching a deal to curb production.

Daily June E-mini S&P 500 Index

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum shifted to the downside after yesterday’s closing price reversal top was confirmed earlier in the session.

A trade through 2750.00 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down when sellers take out the last swing bottom at 2424.75.

The intermediate range is 3131.00 to 2174.00. Its retracement zone at 2652.50 to 2765.50 is potential resistance. It is currently being tested.

The main range is 3397.75 to 2174.00. Its retracement zone at 2786.00 to 2930.25 is major resistance.

The minor range is 2424.75 to 2750.00. Its retracement zone at 2587.25 to 2549.00 is the first support area.

The short-term range is 2174.00 to 2750.00. Its retracement zone at 2462.00 to 2394.00 is the primary downside target.

Daily Technical Forecast

Based on the early price action and the current price at 2673.50, the direction of the June E-mini S&P 500 Index the rest of the session on Wednesday is likely to be determined by trader reaction to the 50% level at 2652.50.

Bullish Scenario

A sustained move over 2652.50 will indicate the presence of buyers. The first target is a downtrending Gann angle at 2715.00.

Overtaking 2715.00 could trigger an acceleration to the upside with the next targets the reversal top at 2750.00, a Fibonacci level at 2765.50 and a 50% level at 2786.00.

Bearish Scenario

A sustained move under 2652.50 will signal the presence of sellers. This could trigger a break into the minor 50% level at 2587.25 and a potential support cluster at 2558 to 2549.00.

Taking out 2549.00 could trigger an acceleration into the short-term 50% level at 2462.00.

Adaptive Fibonacci Suggests A Deeper Bottom Will Setup – Part I

Our Adaptive Fibonacci Price Modeling system suggests a much deeper price move is in the works and the current price rally will likely end near resistance levels identified by the Adaptive Fibonacci Price Modeling system.  We are posting this research post for friends and followers to help them understand the true structure of price and to allow them to prepare for what we believe will become a much deeper downside price move in the future.

Fibonacci Price Theory teaches us that price moves in waves within up and down price cycles.  The recent peak in price, near February 25, 2020, has resulted in a very deep -36% price collapse in the S&P 500 (ES) recently.  This downside move has been mostly straight down, excluding a brief retracement in early March.  The strength of this downside price move suggests a moderate upside price recovery will take place before the next downside leg sets up.

S&P 500 Weekly Chart of 2008-09 Credit Crisis Market Collapse

Throughout the 2008-09 Credit Crisis market collapse, prices staged multiple recovery attempts within the downward price trend.  The first, after the initial -20.88% selloff in late 2007, resulted in a +14.83% price recovery that lasted for over 15+ weeks.  The second recovery, near the end of July 2008, resulted in a +9.56% recovery after a nearly -17% price decline.  After this brief recovery in July 2008, the price collapsed by a massive -44% from August to November 2008.

Daily S&P 500 Chart

This Daily ES chart highlights the first two levels of resistance at 2700 & 2870 that could stall the rally and prompt a downside price move in the future. Support is currently at 2450.  We believe the 2700 level will act as a soft ceiling in the ES where price may attempt to rally, briefly, above this level, which it did yesterday, then pull back and pause as selling pressure re-enters the market.  The 2870 level may act as a hard ceiling where price may attempt to reach this level, but immediately reverse back to the downside.

Overall, we believe continued selling as a result of forward global economic expectations is the most obvious outcome where a deeper price bottom will setup sometime later this spring or early summer.

Weekly S&P 500 Chart

This Weekly S&P 500 chart (ES) shows a possible outcome for price going forward if another downside move starts.  A new downside price move to levels near to, or just below, the 2015~16 low price range is not unreasonable. From this level, we believe a “Flag” formation will setup creating an extended price bottom pattern down at those extreme lows.  We believe this “Flag” formation will end near August~October 2020, just before the 2020 elections and prompt the beginning of a new upside price recovery in the US and global markets.

This is a large forward-looking projection and you may be rolling your eyes, but they are very possible. In fact, last year we predicted the months and price levels in which gold and oil would start new major trends, and we did this 8 months before they took place, similar to what we are proposing here.

Concluding Thoughts:

The rotation in price setup by this brief upside price move will set up a new Fibonacci downside and upside price target range.  We believe it is essential for price to continue this type of rotation as the eventual bottom sets up in the US and global markets.  We believe the true price bottom will happen only after the virus event has subsided and global economies begin to start functioning like normal again.

Currently, there is simply too much of a world-wide disruption to expect that the bottom has already set up near last year’s (2019) brief price lows.  The scale and scope of the current downside price collapse do not properly reflect the total scope of this global virus event yet – it is still a reactionary move in price that has yet to properly digest the total scope of the global economic disruptions. There is a chance for stronger bounce/rally in the next few weeks/months if the virus can start to be contained, and that will continue to mimic that of the 2000 tech bubble. Believe it or not, there is a big similarity to what happened then, to what is happening now in terms of price action and market sentiment. Read article and see these charts.

In other words, we believe more selling will be seen in the global markets and more economic contraction will take place until we are safely beyond this virus event.  The longer the global economic shutdown continues, the more likely we are to see a deeper price bottom in the future and the more likely we are to see more extensive economic collateral damage across the world. No matter which way the markets move we will follow and trade the price action and profit. That is the benefit of following price vs trying to trade prediction, fundamental data etc..

In Part II of this research article, we’ll dig deeper into the underlying components that support our research.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

 

Oil Price Fundamental Daily Forecast – EIA Report to Show Sharp Rise in Crude Oil, Gasoline Stockpiles

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging higher but near the low end of the range on Wednesday shortly before the regular session opening.

The markets are rebounding after a two-day decline, lifted by optimism that a meeting between OPEC members and major allied producers on Thursday will lead to output cuts to support prices that have deteriorated amid the coronavirus pandemic.

At 11:28 GMT, May WTI crude oil is trading $24.47, up $0.84 or +3.55% and June Brent crude oil is at $32.06, up $0.19 or +0.60%.

Traders Positioning Ahead of Thursday’s OPEC Videoconference

The mostly sideways price action on Wednesday indicates that traders are positioning themselves ahead of Thursday’s video conference meeting between members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia.

Traders are expecting this meeting to be more successful than the OPEC+ meeting in early March, which ended in failure to extend cuts beyond the March 31 deadline, and the start of a price war between Saudi Arabia and Russia amid slumping demand.

However, doubts remain over whether the United States will be asked to participate in any production curbs.

Reuters reported that Saudi Arabia, other OPEC member countries and Russia, a grouping known as OPEC+, are likely to agree to cut output, but that the accord could be dependent on whether the United States could go along with cuts. The U.S. Department of Energy said on Tuesday that U.S. output is already declining without government action.

American Petroleum Institute Weekly Inventories Report

According to the API, U.S. crude inventories jumped by 11.9 million barrels to 473.8 million barrels in the week-ending April 3. With a drop in fuel demand amid the virus outbreak, gasoline stocks also rose by 9.4 million barrels, marking the biggest one-week gain in the API figures since January 2017.

Daily Forecast

Ahead of Thursday’s OPEC meeting, traders are focused on whether the United States will join OPEC+ with production cuts of its own.

“Saudi Arabia and Russia continue to hammer out a deal … What is clear is that the United States must be involved,” ANZ Research said in a note.

Official data from the U.S. Energy Information Administration (EIA) is due at 14:30 GMT on Wednesday. Traders expect the report to show a 9.8 million barrel build.

U.S. crude production is expected to slump by 470,000 bpd and demand is set to drop by about 1.3 million bpd in 2020, the EIA said on Tuesday.

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Trader Reaction to 7948.00 Sets the Tone

June E-mini NASDAQ-100 Index futures are edging higher shortly before the regular session opening on Wednesday. There was no follow-through to the downside following yesterday’s potentially bearish closing price reversal top. During the previous cash market session, the NASDAQ Composite closed the day down 0.3% following a 3% rally.

The early price action suggests volatility is likely to remain for some time as investors are being forced to choose between following the coronavirus data and the economic data. It also indicates that investors may be getting ahead of reality where coronavirus shutdowns are likely to weigh on the economy significantly beyond the second quarter.

At 11:02 GMT, June E-mini NASDAQ-100 Index futures are trading 8058.50, up 46.50 or +0.58%.

Daily June E-mini NASDAQ-100 Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, yesterday’s closing price reversal top is an early sign that momentum may be getting ready to shift to the downside.

A trade through 8303.25 will negate the closing price reversal top and signal a resumption of the uptrend.

A move through 7948.00 will confirm the closing price reversal top. This won’t change the trend to down but it will shift momentum. A trade through 7376.00 will change the main trend to down.

On the upside, the major resistance is a retracement zone at 8304.75 to 8653.00.

The index is currently straddling a retracement zone at 7817.75 to 8098.50.

The short-term range is 6628.75 to 8303.25. Its retracement zone at 7469.25 to 7270.25 is a potential downside target.

Daily Technical Forecast

Based on the early price action, the direction of the June E-mini NASDAQ-100 Index the rest of the session on Wednesday will be determined by trader reaction to 7948.00.

Bullish Scenario

A sustained move over 7948.00 will indicate the presence of buyers. This could trigger a labored rally with potential resistance at 8098.50, 8164.75 and 8174.75.

A move through 8174.75 could trigger a surge into 8303.25 and 8304.75. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 7948.00 will signal the presence of sellers. This will also confirm the reversal top. The first target angle comes in at 7888.00. If this angle fails then look for the selling to extend into 7817.75.

The 50% level at 7817.75 is a potential trigger point for an acceleration into 7632.00.

Ultimately, we’re looking for a correction into 7469.25 to 7270.25 over the short-run.

EUR/USD Mid-Session Technical Analysis for April 8, 2020

The Euro is edging lower against the U.S. Dollar on Wednesday as investors move money back into the safe-haven greenback on renewed coronavirus concerns.

Earlier this week, the Euro was supported by optimism that new coronavirus cases were turning for the better, but today’s price action indicates that investors are still concerned about the extent of the economic fallout which is just starting to show up in the economic data.

At 10:14 GMT, the EUR/USD is trading 1.0862, down 0.0029 or -0.27%.

In other news, European Union finance ministers failed to agree in all-night talks on more support for their coronavirus-hit economies and their chairman said on Wednesday morning he was suspending the discussions until Thursday.

At the talks, the European Central Bank told Euro Zone finance ministers that the Euro Zone could need fiscal measures worth up to 1.5 trillion Euros to tackle the economic crisis caused by the COVID-19 epidemic, officials told Reuters.

Daily EUR/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.0636 will signal a resumption of the downtrend. The main trend will change to up on a trade through the last main top at 1.1147.

The minor trend is also down. However, a new minor bottom was formed at 1.0768. A trade through this level will signal renewed selling pressure.

The short-term range is 1.0636 to 1.1147. The EUR/USD is currently trading inside its retracement zone at 1.0892 to 1.0831. This zone is controlling the near-term direction of the Forex pair.

The minor range is 1.1147 to 1.0768. Its 50% level or pivot is a potential upside target.

Daily Technical Forecast

Based on the early price action and the current price at 1.0862, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the 50% level at 1.0892 and the downtrending Gann angle at 1.0827.

Bullish Scenario

A sustained move over 1.0892 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the pivot at 1.0958.

Bearish Scenario

A break under the Fibonacci level at 1.0831 will be the first sign of weakness. Crossing to the weak side of the downtrending Gann angle at 1.0827 will signal the presence of sellers.

A move under 1.0827 could trigger an acceleration to the downside with the minor bottom at 1.0768 and the uptrending Gann angle at 1.0756 the next likely targets.

GBP/USD Volatility Remains Subdued

GBP/USD has seen a sudden drop in volatility in April and was seen continuing to trade essentially sideways in the early day on Wednesday.

The pair saw some buying yesterday as the dollar broadly lost ground against its major counterparts. The greenback has been following an inverse relationship with the equity markets as of late and was weighed by a rally in the stock markets.

Market participants appear to be more confident that a bottom is in for the stock markets, at least an interim one. The S&P 500 rallied to a fresh three-week high yesterday before paring back a bulk of the gains.

UK Prime Minister Boris Johnson has spent a second night in the hospital. Johnson was admitted to intensive care yesterday when it was announced that Foreign Secretary Dominic Raab would stand in for Johnson.

The economic calendar for the session ahead is relatively light. The Federal Reserve is scheduled to release minutes from its latest FOMC meeting.

Technical Analysis

GBPUSD 4-Hour Chart

The dollar is likely to continue taking its queues from risk sentiment although the commodity currencies seem to be benefiting the most from the dollar weakness seen in the early week. Sterling appears to be less sensitive to swings based on risk appetite in that context.

GBP/USD continues to trade within a downward trending channel. Considering the general lack of momentum, this could very well turn out to be a bull flag pattern.

The exchange tested the upper bound of the channel yesterday and therefore a breach above yesterday’s high would tend to set the pattern into play which would signal a bullish continuation.

Further resistance for the pair is found at 1.2476 for the session ahead, although if the bull flag pattern is activated, the hurdle is not likely to hold sellers for too long.

In the session ahead, support is found at 1.2250. If the pair fails to hold above it, the next level of downside interest comes in at 1.2130 which is currently near the channel bottom.

Bottom Line

  • GBP/USD remains within a range. Volatility is likely to pick up on a range break.
  • The Federal Reserve is scheduled to release minutes from its last meeting later today.

U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 100.345, Weakens Under 100.030

Demand for the U.S. Dollar is rising broadly on Wednesday amid growing concerns in the financial markets that the coronavirus pandemic is far from over. The greenback is finding footing against a basket of major currencies as investors returned to safe-havens, reversing some risk currency gains made on hopes the coronavirus crisis in Europe and New York was slowing.

At 09:42 GMT, June U.S. Dollar Index futures are trading 100.255, up 0.341 or +0.35%.

The dollar, which for about a month has very closely tracked risk appetite, is edging up against the Euro, British Pound and Canadian Dollar. Against the safe-haven, Swiss Franc and Japanese Yen, the dollar is trading sideways to higher.

Daily June U.S. Dollar Index

Daily Technical Analysis

The main trend is up according to the daily swing chart, but the rally has stalled slightly below a major 50% retracement level. A move through 101.030 will signal a resumption of the uptrend. The main trend will change to down on a trade through the last swing bottom at 98.345.

On the upside, minor retracement zone resistance comes in at 101.155 to 101.815. Inside this zone is a major 50% level at 101.495.

The main range is 94.530 to 103.960. Its retracement zone at 99.245 to 98.130 is major support. This zone stopped the selling at 93.345 on March 27. It is controlling the near-term direction of the index.

Daily Technical Forecast

Based on the early price action and the current price at 100.255, the direction of the June U.S. Dollar Index the rest of the session on Wednesday is likely to be determined by trader reaction to a pair of uptrending Gann angles at 100.345 and 100.030.

Bullish Scenario

A sustained move over 100.345 will indicate the presence of buyers. This could trigger a rally into a downtrending Gann angle at 100.960.

Taking out 100.960 will indicate the buying is getting stronger. This could trigger a further rally into 101.030 and 101.495.

Bearish Scenario

A sustained move under 100.030 will signal the presence of sellers. This could trigger a break into the 50% level at 99.245. This is a potential trigger point for an acceleration to the downside with 98.130 the next major target.