U.S. Dollar Index (DX) Futures Technical Analysis – In Position to Challenge Main Bottom at 91.290

The U.S. Dollar hit its lowest level since March 18 late in the session on Wednesday as Treasury yields bounced off their intraday highs, holding just below multi-month levels reached earlier in the month. Reduced demand for the safe-haven currency also weighed on the greenback.

At 20:28 GMT, June U.S. Dollar Index futures are trading 92.645, down 0.200 or -0.22%.

In other news, the U.S. economy grew faster in the early spring and more companies sought to hire new workers, a Federal Reserve survey showed, but inflation also picked up and companies faced an array of shortages that are hindering production.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on March 31.

The main trend will change to down on a move through the nearest swing bottom at 91.290.

The minor trend is also down. This confirms the shift in momentum. A new minor top was formed at 92.365. A trade through this level will change the minor trend to up.

The short-term range is 89.655 to 93.470. Its retracement zone at 91.555 to 91.100 is the primary downside target. Inside this zone is the main bottom at 91.290, making it a valid target.

The main range 94.590 to 89.155. Its retracement zone at 91.870 to 92.510 is potential resistance. It is also controlling the near-term direction of the index.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index early Thursday is likely to be determined by trader reaction to 91.555.

Bullish Scenario

A sustained move over 91.555 will indicate the presence of buyers. The first upside target is 91.870. Taking out this level could trigger an acceleration into 92.365.

Bearish Scenario

A sustained move under 91.555 will signal the presence of sellers. This could trigger a break into the main bottom at 91.290, followed by the short-term Fibonacci level at 91.100. This is a potential trigger point for an acceleration to the downside with 90.620 the first target.

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

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – In Position to Post Closing Price Reversal Top

June E-mini NASDAQ-100 Index futures are getting pounded late in the session, putting the technology-based index in a position to post a potentially bearish closing price reversal top. The plunge in tech stocks is offsetting the first batch of corporate earnings from banks that largely exceeded expectations.

Tesla, a NASDAQ component, fell more than 3%. Big Tech stocks including Amazon, Facebook, Netflix and Apple all traded at least 1% lower.

At 19:50 GMT, June E-mini NASDAQ-100 Index futures are trading 13801.25, down 174.50 or -1.25%.

Daily June E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, late in the session, the index is trading lower which could be a sign that momentum is getting ready to shift to the downside.

A trade through 14029 will signal a resumption of the uptrend. A trade through 12609.75 will change the main trend to down.

The minor trend is also up. A move through 13512.50 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 13512.50 to 14029.00. Its 50% level at 13770.75 is currently being tested.

The short-term range is 12609.75 to 14029.00. Its retracement zone at 13319.25 to 13152.00 is the primary downside target and support area.

Daily Swing Chart Technical Forecast

The direction of the June E-mini NASDAQ-100 Index into the close will be determined by trader reaction to 13975.75.

Bullish Scenario

A sustained move over 13975.75 will indicate the presence of buyers. If this creates enough upside momentum then look for the late rally to possibly extend into 14029.00.

Bearish Scenario

A sustained move under 13975.75 will signal the presence of sellers. The first target is the minor pivot at 13770.75. This price is a potential trigger point for an acceleration to the downside with the first target coming in at 13512.50.

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

E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Reaction to 33570 Sets Tone into Close

June E-mini Dow Jones Industrial Average futures are trading higher shortly before the cash market close on Wednesday. The blue chip average hit another record high early in the session as investors digested the first batch of corporate earnings that largely exceeded expectations.

Shortly before the cash market opening, futures were trading higher, led by Goldman Sachs and JPMorgan Chase.

At 19:09 GMT, June E-mini Dow Jones Industrial Average futures are at 33632, up 62 or +0.18%.

Shares of Goldman Sachs climbed more than 3% after the bank blew past analysts’ expectations with record first-quarter net profits and revenues on strong performance from the firm’s equities trading and investment banking units.

JPMorgan Chase beat analysts’ estimates on the top and bottom lines, helped by a $5.2 billion benefit from releasing money it had previously set aside for loan losses that didn’t develop.

Daily June E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed early in the session when buyers took out the previous high at 33712.

A trade through 31951 will change the main trend to down. This is highly unlikely, but due to the prolonged move up in terms of price and time, the Dow is inside the window of time for a potentially bearish closing price reversal top.

The minor range is 33157 to 33800. Its 50% level or pivot at 33479 is potential support.

The short-term range is 31951 to 33800. Its retracement zone at 32876 to 32657 is the nearest support area.

Daily Swing Chart Technical Forecast

The direction of the June E-mini Dow Jones Industrial Average futures contract into the close is likely to be determined by trader reaction to 33570.

Bullish Scenario

A sustained move over 33570 will indicate the presence of buyers. If this creates enough upside momentum then look for a possible retest of the intraday high at 33800.

Bearish Scenario

A sustained move under 33570 will signal the presence of sellers. The first downside target is the pivot at 33479. Taking out this level could trigger an acceleration to the downside with 33157 the next potential downside target.

Side Notes

A close under 33570 will form a closing price reversal top. If confirmed on Thursday, this could trigger the start of a 2 to 3 day correction.

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 – Momentum Could Shift on Close Under 4132.75

June E-mini S&P 500 Index futures are trading lower late in the session after giving back earlier gains. The index was supported shortly before the cash market opening after upbeat earnings reports from Goldman Sachs and JPMorgan boosted investor expectations of a strong rebound for corporate America amid swift COVID-19 vaccinations.

At 18:28 GMT, June E-mini S&P 500 Index futures are trading 4123.75, down 9.00 or -0.22%.

Goldman Sachs Group Inc rose 3.9% after it reported a massive jump in first-quarter profit, capitalizing on record levels of global deal making activity. JPMorgan Chase & Co’s shares fell 1.0% even as the largest U.S. bank’s earnings jumped almost 400% in the first quarter, as it released more than $5 billion in reserves it had set aside to cover coronavirus-driven loan defaults.

Daily June E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, the late session weakness may be an indication that momentum is getting ready to shift to the downside.

A trade through the intraday high at 4144.00 will reaffirm the uptrend. The main trend will change to down on a move through 3843.25. This is not likely, but the index is in a position to post a potentially bearish closing price reversal top.

The minor trend is also up. A trade through 4101.25 will change the minor trend to down. This will also shift momentum to the downside.

The new minor range is 4101.25 to 4144.00. The index is currently testing its 50% level or pivot at 4122.50.

The short-term range is 3843.25 to 4144.00. Its retracement zone at 3993.50 to 3958.00 is the nearest support area.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index into the close on Wednesday is likely to be determined by trader reaction to 4132.75.

Bullish Scenario

A sustained move over 4132.75 will indicate the presence of buyers. If this move can create enough upside momentum then look for the buying to possibly extend into 4144.00.

Bearish Scenario

A sustained move under 4132.75 will signal the presence of sellers. The first downside target is 4122.50. Taking out this level could create the downside momentum needed to challenge the minor bottom at 4101.25. This price is a potential trigger point for an acceleration to the downside.

Side Notes

A close under 4132.75 will form a closing price reversal top. If confirmed on Thursday, this could trigger the start of a 2 to 3 day correction.

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

S&P 500 Price Forecast – S&P 500 Continues to March Higher

The S&P 500 has gotten a bit stretched over the last couple weeks, and we are starting to see that as the momentum is most certainly dropping. At this point in time, the market is likely to continue to see a lot of noise, but I do think that we have a couple of support levels underneath that should come into play. The first one would be the 4100 level, which of course has support due to the fact that we have tested it recently, and it is also a large, round, psychologically significant figure.

S&P 500 Video 15.04.21

After that, we have a gap near the 4000 level, which not only would it be supportive because of that gap, but also that large figure as well. The 50 day EMA then follows at the 3935 level. It is not until we break down below 3900 that I would be concerned about the uptrend, and even then, I would be a buyer of puts, not necessarily someone looking to short this market. After all, we have been taught over the last 13 years that the Federal Reserve will certainly jump into the fray every time it has to pick the market up, so the last thing you want to do is be short of an index when something like that happens. With that being the case, I am looking for pullbacks as potential buying opportunities going forward and will treat them as such. With that being the case, I am going to simply sit on the sidelines and wait for an opportunity to pick up “value” going forward.

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

Natural Gas Price Prediction – Prices Whipsaw and Fall as Demand Drops

Natural Gas prices moved lower on Wednesday, whipsawing and closing near the session lows.  This comes ahead of Thursday’s inventory report from the Department of Energy. Expectations are for a 50 Bcf build-in stockpiles according to survey provider Estimize. The weather is expected to be colder than normal throughout most of the midwest for the next 6-10 days. There is snow expected in the mountains which should increase heating demand.

Technical Analysis

Natural Gas prices closed on the session lows after making a higher high which is a sign of rejection. Support is seen near the 10-day moving average at 2,56. Resistance is seen near the 50-day moving average at 2.73. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Demand Falls

Demand for U.S. natural gas fell in all sectors except for deliveries to LNG facilities. According to the EIA total U.S. consumption of natural gas fell by 2.0% compared with the previous report week. Natural gas consumed for power generation declined by 4.0% week over week. Industrial sector consumption decreased slightly by 0.6% week over week. In the residential and commercial sectors, consumption declined by 1.2% as a result of mild temperatures.

Silver Price Forecast – Silver Markets Stall at 50 Day EMA

Silver markets have gone back and forth during the course of the trading session on Wednesday, as the 50 day EMA has offered a significant amount of resistance. That being said, the market is likely to continue the overall consolidation that we have seen over the last couple of days. If you remember, I recently stated that if we could close above the 50 day EMA on a daily chart, that might be something worth buying, but at this point time we simply do not have the momentum to make that happen. I think that we continue to chop back and forth in this area until we find some type of reason to go higher or lower, and it is probably also worth noting that we are sitting between the 50 and the 200 day EMA indicators.

SILVER Video 15.04.21

The US dollar of course will have a significant effect on silver as well, so having said that I think what you are looking at is a scenario that is going to be choppy and noisy to say the least. Ultimately, this is a market that I think is trying to find its footing, and that takes time. However, if we were to break down below the $24 level, that could open up fresh selling. At that point, I would anticipate that the market may have to go to the $22 level underneath as it is the next major support level. With that being the case, I still would not get overly bearish, at least not until we break down below the $22 level. If that level gets slammed underneath, then silver will sell off quite drastically.

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

Crude Oil Price Forecast – Crude Oil Markets Breaking Out

WTI Crude Oil

The West Texas Intermediate Crude Oil market has found itself to be very strong during the trading session on Wednesday as the inventory number showed that there was a significant drop in inventory. That of course is bullish for the commodity and the idea of the “reopening trade.” With that being the case, I think this is a market that will continue to try to grind higher, perhaps reaching towards the $65 level above. At that point, we have seen a lot of selling so it will be interesting to see how that plays out. Ultimately, the $60 level should now offer significant support in this market.

Crude Oil Video 15.04.21

Brent

Brent markets have also rallied during the trading session, breaking above the $66 level. There is a significant amount of demand out there for crude it appears, and that should continue to lift this market. Currently, it looks as if Brent is going to try to go looking towards the $67.50 level, an area that had seen a lot of selling in the past. To the downside, I believe that the 50 day EMA will offer a bit of a short-term floor, and traders will continue to pay attention to it. If that happens, I think what we will see this point in time is a bit of a bounce.

It appears that the demand for crude oil is picking up, and it does not hurt the both the IEA and OPEC both revise their demand forecasts higher for the rest the year, and therefore demand should continue to be a major driver of crude oil going forward.

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

Gold Price Prediction – Prices Slip Despite a Declining Greenback

Gold prices moved lower on Wednesday, despite a declining dollar. The rise in the 10-year yield came despite the budget deficit hitting an all-time high. Treasury yields appear to be topping out, which could lead to a rally in the yellow metal. All the focus seems to on cryptocurrencies, with Coinbase making its IPO.

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Technical analysis

Gold prices moved lower staying sandwiched below resistance near the 50-day moving average at 1,754 and support is seen near the 10-day moving average at 1,736. As prices continue to squeeze between these levels, energy is growing and will likely lead to a breakout or break down. Additional support is seen near the June lows at 1,670. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 74, down from an overbought condition near 77, which reflects accelerating negative momentum. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram is printing in positive territory with a declining trajectory which points to consolidation.

The Budget Deficit Hits an All-time High

The U.S. government’s budget deficit surged to an all-time high of $1.7 trillion for the first six months of this budget year, nearly double the previous record. In its monthly budget report, the Treasury Department said that the deficit for the first half of the budget year,  from October through March, was up from a shortfall of $743.5 billion for the same period a year ago. The deficit has been driven higher by trillions of dollars in support Congress has passed in successive economic rescue packages since the pandemic struck in early March 2020.

Natural Gas Price Forecast – Natural Gas Stalls at 50 Day EMA

Natural gas markets have rallied a bit during the trading session on Wednesday to reach above the 50 day EMA but found plenty of sellers just north of it. That being said, the market looks as if it is ready to continue to chop sideways, perhaps before breaking down further. After all, natural gas will be in low demand season very shortly, as temperatures in the northern hemisphere rise. While that is not the only thing going on, it is by far the most important thing going on.

NATGAS Video 15.04.21

Natural gas markets of course have been very choppy as of late but if we were to turn around a break down below the 200 day EMA, that could convince me to start selling again, and perhaps aiming for lower level such as the $2.25 level, possibly even down to the $2.00 level. This time of year, I have no interest whatsoever in trying to buy natural gas, because quite frankly the demand will not come anywhere near the massive oversupply that we see on a regular basis.

With that being the case, I think what we are looking at is the possibility of a significant break down going forward, but this is a seasonal trade, and a lot of traders will have already known that. With that being the case, I think it is only a matter of time before one has to look at the possibility of fading rallies going forward, as it has certainly worked recently. Natural gas continues to be abundant, and therefore not necessarily something that demand is not taken care of.

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

Gold Price Forecast – Gold Markets Pull Back

Gold markets have pulled back a bit during the trading session on Wednesday as we continue to see a lot of noise in general. With that being the case, it looks as if the $1750 level is going to continue to be an area of interest, and it is worth noting that the 50 day EMA sits just above there, offering psychological and perhaps even technical resistance. That being said, I do not necessarily think that we need to pile in on shorting gold, but it is most certainly sitting there with its back against the wall.

Gold Price Predictions Video 15.04.21

If we did break above the 50 day EMA, and close above there on a daily chart, then I might consider taking a short-term trade to the upside, as it could open up gold towards the 200 day EMA which currently sits just below the $1800 level. Breaking above there then kicks off a longer-term uptrend. With this being the case, the market then should continue to go looking towards the $1950 level, where we had seen a major sell off.

On the other hand, if we were to break down below that double bottom near $1675, the market then probably drops another $175 rather quickly, as the $1500 level is the next major support level that I see on the chart. The market of course is going to be very noisy, but at the end of the day I think what we are looking at is a downtrend that is being very stubborn about giving up, but we also have significant support underneath. In other words, it is going to be very choppy going forward, but that is typical of gold.

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

Natural Gas Price Fundamental Daily Forecast – Underpinned by Cooler Forecasts, Capped Ahead of EIA Report

Natural gas futures are slightly higher late in the session on Wednesday, but well off their intraday high. The market is holding support, but the early rally fell short of the last main top at $2.688. A trade through this level will change the main trend to up.

The market continues to be underpinned by weather forecasts calling for cooler temperatures and high liquefied natural gas (LNG) export volumes, but gains are likely being capped due to general uncertainty ahead of Thursday’s U.S. Energy Information Administration (EIA) storage report.

At 16:36 GMT, June natural gas futures are trading $2.630, up $0.011 or +0.42%.

Bespoke Weather Services Outlook

Colder trends over the previous 24-hours from both the American and European models added 10-12 gas-weighted degree days (GWDD) to the forecast over the next two weeks, Bespoke Weather Services said early Wednesday and Natural Gas Intelligence (NGI) reported.

The colder changes resulted from models showing “more chill in the Midwest and East over the next couple weeks,” the firm said. “…It remains difficult for weather to move the needle much at this time of year, but double-digit GWDD changes in a 24-hour period are noteworthy…We continue to look for a warming trend around the end of the month into early May, though nothing yet that leads us to believe we see a big early-season spike” in cooling degree days.

Maxar Weather Desk Outlook

Maxar’s Weather Desk made cooler changes to its updated forecast Wednesday for the six to 10 day period, starting Monday and continuing through April 23. The most notable shifts occurred in the Rockies and Midwest, according to the forecaster.

“High pressure, which has Canada origins, will carry a round of much below normal temperatures in these regions from early to mid-period,’ Maxar said. “Below normal temperatures are common in the Mid-Continent, with the exceptions being Texas late in the period. Texas moderates closer to normal on days nine and 10 along and in advance of low pressure.”

Further out in the 11-15 day time frame, from April 24-28, Maxar said its forecast “remains of lower than usual confidence for the lead time, with uncertainty pertaining to west Pacific Tropical Storm Surigae.”

Maxar’s latest forecast for the 11-15 period as of early Wednesday showed above normal temperatures over the Southwest and normal temperatures for the East Coast.

Daily Forecast

The price action suggests the futures market has already priced in the shift toward cooler temperatures into the latter half of the month. Therefore, we’re not looking for too much more upside pressure unless the cold extends into late April and early May.

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

US Equities Climb A “Wall Of Worry” To New Highs

Low volume rallies have become a standard of trending recently.  We see higher volume when volatility kicks in near areas of broad market volatility.  Otherwise, we see lower volume trending push the prices higher recently in a “melt-up” type of mode.

Two recent standout events confirm this type of trending and volatility phases of the markets: (1) the September 2020 to early November 2020 (pre-US Election) rotation in price; and (2) the recent February 2021 to late March 2021 sideways price rotation related to the FOMC meeting/comments.  Both of these events centered around external market components and prompted an extended period of price volatility related to uncertainty.  After these events passed, price fell back into a low volume rally mode for many months, where most of the actual price gains happened.

The following Daily QQQ chart highlights my observations related to this type of price activity.  We start in the pre-COVID-19 price rally from October 2019 to the peak near mid-February 2020.  It is easy to see the decreased volume activity while prices climbed more than 27%.  Then, the COVID-19 even sent volatility skyrocketing higher and prices collapsed by 30%.  This type of “Wall Of Worry” trending is common and presents a very clear opportunity for traders.

After the March 2020 bottom, prices began another low volume rally that lasted from April 2020 to August 2020 – totaling a substantial +45% gain.  Again, starting in mid November 2020 and ending in mid February 2021, the QQQ rallied over 15% in a low volume “melt-up” trend.

Currently, the volume has started to subside after the FOMC meeting/comments volatility and we are starting to see moderately strong upward price trending in the QQQ.  This suggests we have entered another “Wall Of Worry” trend which may continue for many weeks or months.

The following Weekly XLY, SPDR Consumer Discretionary ETF chart highlights how diverse this “Wall of Worry” trend really is.  It translates into other sectors with almost the same velocity as it does in the QQQ.  In this example, we can see the strong trending, highlighted by GREEN ARROWS, at the same time as the decreasing volume took place.  Each of these rally trends coincides with the QQQ trends.  The rally from April 2020 to August 2020 represented a +35% gain.  The rally from November 2020 to February 2021 represented a +21% gain.  The current rally attempt has already advanced over 17% higher and may continue to rally for many more weeks.

If there is no future disruption of this low volume trending, then we may expect to see the US stock market continue to move in this manner for many weeks or months to come.  These low-volume “Wall Of Worry” trends can be very profitable and can prompt big moves in sector ETFs.

Many traders continue to miss opportunities in these markets because of worry or concerns of a breakdown in the trend. Eventually, something will prompt a correction or breakdown of this rally trend.  But until that happens, traders need to be able to identify and profit from these strong low volume rallies as they present some of the lowest volatility price advances recently. Being able to identify and trade these sectors is key to being able to efficiently target profits.  You can learn more about the BAN strategy and how to identify and trade better sector setups by registering for my FREE Trading Course here.

For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.

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

Enjoy the rest of the week!

Chris Vermeulen
Founder & Chief Market Strategist
www.TheTechnicalTraders.com

 

USD/CAD Daily Forecast – Another Test Of Support At 1.2525

USD/CAD Video 14.04.21.

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2525 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the 50 EMA at 91.80 and is moving towards the support at 91.50. In case the U.S. Dollar Index manages to get to the test of this level, USD/CAD will find itself under more pressure.

Today, foreign exchange market traders followed the developments in commodity markets which moved higher and provided support to commodity-related currencies like Canadian dollar.

WTI oil gained strong upside momentum after Iran stated that it would enrich uranium up to 60% purity because of the recent attack on its nuclear facility. Currently, WTI oil is trying to settle above the $63 level. If this attempt is successful, Canadian dollar may get more support.

Meanwhile, Treasury yields moved higher, providing some support to the U.S. dollar. However, this support was not sufficient enough to offset the impact of strong commodity markets so USD/CAD moved lower.

Technical Analysis

usd cad april 14 2021

USD to CAD managed to get below the support at 1.2550 and is trying to settle below the next support level which is located at 1.2525. This support level has been tested several times in recent trading sessions and proved its strength.

In case USD to CAD declines below the support at 1.2525, it will gain downside momentum and head towards the next support level at 1.2500. RSI is in the moderate territory so there is plenty of room to gain downside momentum in case the right catalysts emerge.

If USD to CAD settles below the support at 1.2500, it will move towards the next support at 1.2470. A successful test of the support at 1.2470 will open the way to the test of the support at 1.2450.

On the upside, the previous support at 1.2550 will likely serve as the first resistance level for USD to CAD. A move above this level will lead to a test of the resistance at the 20 EMA at 1.2560. If USD to CAD gets above the 20 EMA, it will move towards the next resistance which is located near the 50 EMA at 1.2590.

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

Oil Price Fundamental Daily Forecast – Prices Surge as Crude Inventories Plunge Amid Jump in Refining Activity

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Wednesday following the release of a government report that showed a bigger-than-expected drawdown in crude supplies. The market was supported earlier in the session as OPEC upwardly revised its demand forecasts and better-than-expected news from the American Petroleum Institute (API) late Tuesday.

At 16:00 GMT, June WTI crude oil is trading $62.98, up $2.74 or +4.55% and June Brent crude oil is at $66.36, up $2.69 or +4.22%.

US Energy Information Administration Weekly Inventories Report

U.S. crude oil stockpiles dropped more than expected as refiners increased activity heading into the summer driving season, the Energy Information Administration (EIA) said on Wednesday.

Crude inventories fell by 5.9 million barrels in the week to April 9 to 492.4 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.9 million-barrel drop.

U.S. gasoline stocks rose 309,000 barrels in the week to 234.9 million barrels, less than analysts’ expectations for a 786,000-barrel rise.

Distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels versus forecasts for a 971,000-barrel rise, the EIA data showed.

Refinery utilization rates rose by 1 percentage point to 85% of overall capacity. That is the highest since March of last year, just before the coronavirus pandemic caused refiners to severely restrict processing activities as demand dove.

Net U.S. crude imports rose last week by 443,000 barrels per day. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 346,000 barrels in the last week, the EIA said.

Demand Predictions Move to Forefront

The International Energy Agency (IEA) predicted global oil demand and supply were set to rebalance in the second half of the year and that producers may then need to pump an additional 2 million barrels per day (bpd) to meet the expected demand.

Similarly, the Organization of the Petroleum Exporting Countries (OPEC) on Tuesday raised its global demand forecast by 70,000 bpd from last month’s forecast and now expects global demand to rise by 5.95 million bpd in 2021.

Daily Forecast

The strong demand forecasts are likely to overcome the gradual increases in output by OPEC and its allies. So prices are likely to remain underpinned over the near-term.

Additionally, a weaker U.S. Dollar should continue to be supportive for prices since it tends to increase foreign demand for the dollar-denominated commodity.

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

Why Shares Of Goldman Sachs Are Up By 5% Today?

Goldman Sachs Video 14.04.21.

Goldman Sachs Stock Moves Higher After Strong Quarterly Report

Shares of Goldman Sachs gained strong upside momentum after the company released its quarterly report. The company reported revenue of $17.7 billion and GAAP earnings of $18.60 per share, easily beating analyst estimates on both earnings and revenue. Goldman Sachs declared a quarterly dividend of $1.25 per share, in line with the previous dividend.

The company noted that its investment banking segment generated record quarterly net revenues of $3.77 billion, and the firm retained its first position in worlwide announced and completed mergers and acquisitions. Other business segments also performed well.

The unprecendented support provided by the world central banks boosted capital markets and deal activity which was bullish for Goldman Sachs. Reports from other financial companies that were published today were also strong so it’s an industry-wide trend.

What’s Next For Goldman Sachs?

Shares of Goldman Sachs reached all-time high levels back in March 2021 at $356.85. At this point, it looks that the stock has good chances to get to the test of this level.

Analysts expect that Goldman Sachs will report earnings of $33.06 per share in 2021 and $33.71 per share in 2022, so the stock is trading at just 10 forward P/E which is cheap in today’s market environment. It should be noted that earnings estimates have been steadily moving higher in recent months, and analysts will likely increase them after the strong quarterly report.

The recent pullback in Treasury yields has put some pressure on financial stocks, but the solid quarterly performance should help Goldman Sachs gain more upside momentum. In addition, the risk of higher inflation (and higher yields) is real, which is bullish for the financial sector. Meanwhile, shares of Goldman Sachs look ready to test the recent highs as the company’s quarterly performance was strong while its valuation remains attractive.

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

Does Gold Want to Move Lower?

The yellow metal has climbed, but only with lacklustre energy. If the USD Index is not rising, then gold should really be shooting up and breaking new monthly highs, but it isn’t. Readers have been asking what’s happening and some have been concerned with gold’s apparent strength. So, let’s break it down.

History tends to rhyme and what happened before, will – to some degree – happen again. Gold is not immune to this concept, and the current implications are bearish.

Let’s jump right into the charts for details.

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Gold topped right at its triangle-vertex-based reversal, just like it did in mid-March and in early January (please note the points that are marked on the above chart for confirmation – they are described in red). That happened on Thursday (Apr. 8), and since that time gold has continued to move lower.

Gold invalidated the breakout above its mid-March highs, proving that what we saw was nothing more than just an ABC (zigzag) correction within a bigger downswing. The moves that follow such corrections are likely to be similar to the moves that precede it. In this case, the move that preceded the correction was the 2021 decline of over $150. This means that another $150+ decline could have just begun.

It might appear bullish that gold rallied yesterday (Apr. 13), but it only appears this way until one compares this rally with what happened in the USD Index during the same time. Paying attention to today’s (Apr. 14) pre-market price moves further emphasizes the fake nature of yesterday’s rally in gold.

The point is not that gold rallied, but that it hasn’t rallied enough.

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During yesterday’s session, the USD Index moved to new monthly lows and this decline continued in today’s pre-market trading. Consequently, if gold was at least reacting to the USD’s movement “normally”, it should move to new monthly highs. If gold “wanted” to rally, it would have likely exploded to the upside. But what happened instead? Gold moved higher only somewhat yesterday – not to new monthly highs – and in today’s pre-market trading it’s actually slightly lower.

This tells us that gold “wants” to move lower now.

The USD Index moved lower, and it can move even lower on a very short-term basis, perhaps to the 50% Fibonacci retracement based on the entire 2021 rally, and the previous lows. And what would be the likely effect on gold? Based on what we saw yesterday, and what we see so far today, it seems that gold will likely ignore this decline in the USD Index, while waiting for the latter to finally show strength – so that it (gold) could decline.

After all, gold has already topped right at its triangle-vertex-based reversal point . Consequently, it’s no wonder that it now continues to trade sideways, waiting for a trigger to move much lower.

Moreover, please note that the recent zigzag makes the situation similar (approximately symmetrical) to what we saw about a year ago – between April and early June. Once gold breaks to new yearly lows, one could view this as a breakdown below the neckline of a major head and shoulders pattern where the April 2020 – June 2020 and the recent consolidations are the shoulders of the pattern. Based on such a pattern, gold would be likely to slide profoundly, probably well below $1,500. And the relative performance of gold vs. the USD Index tells us that such a short-term breakdown (to new yearly lows) is a likely outcome in the following weeks.

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Gold stocks also failed to rally to new monthly highs, and they seem to be forming a relatively broad topping pattern, just as they did in mid-March and at the beginning of the year.

The sell signal from the Stochastic indicator as well as the fact that miners failed to invalidate the breakdown below their broad head-and-shoulders pattern points to a bearish outlook for the following weeks (and perhaps months).

All in all, the outlook for the precious metals market remains bearish and the recent rally didn’t change anything.

Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium 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.

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.

 

Silver Price Daily Forecast – Silver Is Losing Ground As Treasury Yields Rebound

Silver Video 14.04.21.

Silver Pulls Back After Yesterday’s Upside Move

Silver faced resistance near $25.55 and pulled back while the U.S. dollar remained under pressure against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the support at the 50 EMA at 91.80 and is trying to develop additional downside momentum. In case this attempt is successful, the U.S. Dollar Index will head towards the next support at 91.50 which will be bullish for silver and gold price today. Weak dollar is bullish for precious metals as it makes them cheaper for buyers who have other currencies.

Gold pulled back towards the nearest support level at the 20 EMA at $1735. This level has been tested several times in recent trading sessions and proved its strength. In case gold declines below the 20 EMA, it will head towards $1720 which will be bearish for silver.

It should be noted that Treasury yields are rebounding after yesterday’s downside move, which is a bearish catalyst for precious metals.

Meanwhile, gold/silver ratio is testing the support at the 50 EMA at 68.60. If gold/silver ratio settles below the 50 EMA, it will gain downside momentum which will be bullish for silver.

Technical Analysis

silver april 14 2021

Silver did not manage to settle above the resistance at $25.55 and declined towards the nearest support level at the 20 EMA at $25.30. The next support level is located at $25.20, so silver will likely get material support in the $25.20 – $25.30 area.

If silver settles below the support at $25.20, it will head towards the next support level at $25.00. A successful test of this support level will open the way to the test of the next support at $24.70.

On the upside, the nearest resistance level for silver is located at $25.55. If silver gets above this level, it will get to the test of the 50 EMA at $25.65. A move above the 50 EMA will push silver towards the resistance at $25.85. If silver manages to settle above this level, it will move towards the $26.25 – $26.30 resistance area.

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

USD/JPY Price Forecast – US Dollar Looking for Buyers

The US dollar has fallen initially against the Japanese yen during the trading session on Wednesday but looks as if it is finding a little bit of support exactly where you would expect it based upon previous trading action.

USD/JPY Video 15.04.21

After all, we have seen a lot of noise in this general vicinity, so it does make a certain amount of sense that traders would come back in and try to pick it up “on the cheap.” The market had gotten way ahead of itself, so a pullback to this area of consolidation made the most sense, and now it looks as if we may be able to start taking off again. If that is going to be the case, I believe that we will probably revisit the highs sooner rather than later.

Regardless of what happens next, I am not willing to sell this market, because quite frankly it is far too bullish from a longer-term standpoint. Ultimately, I think this is a market that will find its way back to the ¥111 level, possibly even all the way to the ¥110 level. Interest rate differentials between the two countries continue to be a major factor, so that cannot be stressed enough in this scenario. After the big move that we had previously seen, it does make quite a bit of sense that we would continue to see a lot of noise, but ultimately, I do think we are in a scenario that the market needed to calm down and find a little bit of stability, which is something that I think has happened over the last couple of weeks.

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

GBP/USD Price Forecast – British Pound Continues to Find Same Level

The British pound has rallied a bit during the trading session on Wednesday to break above the 50 day EMA, only to turn around and give that right back up almost immediately. By doing so, it has formed a less than enthusiastic candlestick, making this a very unlikely scenario for a sudden break out. This does not mean that I think the market is going to fall apart, rather I think we have a lot of work to do before we get to the upside again. Having said that, if we were to break above the top of the candlestick from the trading session on Wednesday, that could be a very good sign.

GBP/USD Video 15.04.21

If we were to break down below the lows from earlier this week, that opens up the possibility and the high likelihood of a move down to the 1.35 handle. That is an area that is a large, round, psychologically significant figure, and also features the 200 day EMA. With that in mind, I would be very interested in buying down at that level, assuming that we get there and of course get a bit of a bounce. If we do not get that bounce, then I would be a little bit more suspicious.

Whether or not the US dollar can climb against other currencies seems to be an open-ended question, and depending on who you listen to, the answers very wildly. As for myself, I think what we are going to see is more choppiness than anything else, making it yet another headache inducing couple of months in some of these pairs. I suspect the British pound will probably be one of them.

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