Gold Price Prediction – Prices Rise in Tight Range as Momentum Turns Positive

 

Gold prices moved higher on Wednesday, as the dollar consolidated and U.S. yields remained stable. Gold volatility is also trading sideways, hovering near the 23% range. On Wednesday, the U.S. inaugurated a new President. Riskier assets moved higher, which helped buoy gold prices. Additionally, the commentary from likely Treasury secretary Janet Yellen shows that stimulus will be added and weigh on the dollar.

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Technical analysis

Gold prices rallied on Wednesday bouncing from an upward sloping trend line that comes in near 1,825. Resistance is seen near an upward sloping trend line that comes in near 1,939. While the trend is more of a consolidating, the 10-day moving average crossed below the 50-day moving average which means that a short-term downtrend is in place. Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 21, up from 18 and above the oversold trigger level. Medium-term negative momentum has decelerated as the MACD (moving average convergence divergence) histogram is printing in the red with a rising trajectory, which points to consolidation.

Yellen Takes Agreeable Tone

During here meeting for confirmation to the Treasury Secretary, Janet Yellen agree with all of her questioners but pushed back on fiscal policy, saying there was a need for another large fiscal package.  The fiscal support is shaping up to be a key test for the Biden administration.

Price of Gold Fundamental Daily Forecast – Start of a Rally or Knee-jerk Reaction to Biden’s Inauguration?

Gold futures are trading higher shortly after the mid-session on Wednesday as traders continued to react positively to comments from U.S. Treasury Secretary nominee Janet Yellen the previous day. Yellen essentially bolstered bets for another stimulus package under President Joe Biden that could pressure the U.S. Dollar, while driving up foreign demand for the dollar-denominated asset.

At 18:35 GMT, April Comex gold is trading $1872.30, up $28.30 or +1.53%.

Focus Shifts Toward Biden Administration

Gold traders started to form a support base last week with the release of President Joe Biden’s stimulus package proposal. Biden outlined a $1.9 trillion coronavirus relief package, saying bold investment was needed to jump-start the economy and accelerate the distribution of vaccines to bring the coronavirus under control.

Biden campaigned last year on a promise to take the pandemic more seriously than President Donald Trump, and the package aims to put that pledge into action with an influx of resources for the COVID-19 response and economic recovery.

The aid package includes $415 billion to bolster the response to the virus and the rollout of COVID-19 vaccines, some $1 trillion in direct relief to households, and roughly $440 billion for small businesses and communities particularly hard hit by the pandemic.

Biden’s plan is meant to kick off his time in office with a large bill that sets his short-term agenda into motion quickly.

Transition officials said Biden’s plan will be a rescue package that will be followed up with another recovery package in the coming weeks.

Janet Yellen, U.S. President Joe Biden’s nominee for Treasury Secretary, sparked an even bigger response from the market than Biden when she urged lawmakers on Tuesday to “act big” on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of a higher debt burden.

Yellen also said that the value of the dollar should be determined by markets, a break from departing President Donald Trump’s desire for a weaker U.S. currency.

“The United States does not seek a weaker currency to gain competitive advantage and we should oppose attempts by other countries to do so,” she said.

Short-Term Outlook

The huge rally on Wednesday is impressive, but it may be just a reaction to the inauguration of President Biden.

Biden’s relief package looks bullish on paper, but it still has to be paid for and that could mean higher Treasury yields, which ultimately dictate the direction of gold prices.

The gold rally could be short-lived if Treasury yields continue rise.

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

Oil Price Fundamental Daily Forecast – Steady to Higher Ahead of API Report

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging higher at the mid-session on Wednesday, underpinned by expectations that the new U.S. administration will deliver massive stimulus spending that would lift demand, as well as by OPEC output curbs, additional voluntary production cuts by Saudi Arabia in February and forecasts calling for a drop in U.S. crude inventories in this week’s government report.

At 16:07 GMT, March WTI crude oil is trading $53.46, up $0.48 or +0.91% and March Brent crude oil is at $56.37, up $0.47 or +0.84%.

Yellen Sets the Bullish Tone

Janet Yellen, U.S. President Joe Biden’s nominee for Treasury Secretary, set a bullish tone for crude oil traders when she urged lawmakers on Tuesday to “act big” on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of higher debt burden.

Yellen also said that the value of the dollar should be determined by markets, a break from departing President Donald Trump’s desire for a weaker U.S. currency. This is important because crude oil is a dollar-denominated commodity. So when the dollar weakens, crude oil becomes cheaper to foreign buyers.

Yellen also made comments that suggest demand for gasoline could face some headwinds during the Biden administration. Yellen called climate change an “existential threat” to the U.S. economy and said she would appoint a senior official at Treasury to oversee the issue and assess systemic risks it poses to the financial system.

She added investment in clean technologies and electric vehicles was needed to cut carbon emissions, keep the U.S. economy competitive and provide good jobs for American workers.

American Petroleum Institute Weekly Inventories Report

At 21:30 GMT, the API will release its weekly inventories report. It is expected to show crude stocks fell by 300,000 barrels in the week to January 15.

Short-Term Outlook

Sentiment is being supported by Yellen’s declaration for the government to “act big” on stimulus. Traders believe a surge in debt-funded spending would be a positive for the global economy, demand for crude oil and commodity prices in general. Meanwhile, it would put pressure on the U.S. Dollar that would boost foreign demand for dollar-based crude oil.

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

USD/CAD Daily Forecast – Test Of Support At 1.2625

USD/CAD Video 20.01.21.

Canadian Dollar Gained Strong Upside Momentum

USD/CAD is testing the support level at 1.2625 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is currently trading in the range between the support at the 20 EMA at 90.35 and the resistance at 90.50. If the U.S. Dollar Index settles below the 20 EMA, it will gain additional downside momentum and move towards the 90 level which will be bearish for USD/CAD.

Today, Canada reported that Inflation Rate decreased by 0.2% month-over-month in December. Analysts expected that Inflation Rate would remain unchanged. On a year-over-year basis, Inflaiton Rate grew by 0.7% compared to analyst consensus of 1%. Meanwhile, Core Inflation Rate increased by 1.5% year-over-year. Meanwhile, the Bank of Canada left the interest rate unchanged at 0.25%, in line with the analyst consensus.

Interestingly, today’s inauguration of Joe Biden had little impact on the dynamics of the U.S. dollar on the foreign exchange market. Perhaps, traders would like to see his first moves before evaluating the future trajectory of the American currency.

Today, commodity-related currencies like Canadian dollar received material support as oil gained ground on stimulus optimism. If WTI oil manages to settle above multi-month highs, Canadian dollar will get additional support.

Technical Analysis

usd cad january 20 2021

USD to CAD managed to get below the support at 1.2665 and tested the next support level at 1.2625. USD to CAD failed to settle below the support at 1.2625 on the first attempt, but it maintains good chances to get to another test of this support level. RSI is in the moderate territory, and there is plenty of room to gain additional downside momentum.

If USD to CAD settles below 1.2625, it will head towards the next support level at 1.2590. A successful test of this level will push USD to CAD towards the next support which is located at 1.2550.

On the upside, the previous support at 1.2665 will likely serve as the first resistance level for USD to CAD. A move above this level will push USD to CAD towards the resistance at 1.2700. If USD to CAD gets above 1.2700, it will head towards the resistance at 1.2720.

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

NZD/USD Forex Technical Analysis – Strengthens Over .7160, Weakens Under .7122

The New Zealand Dollar edged higher on Wednesday as the prospects of aggressive fiscal stimulus in the United States bolstered the global outlook, while economic data out of Australia remained mostly positive, helping to underpin the Kiwi.

At 09:53 GMT, the NZD/USD is trading .7160, up 0.0043 or +0.60%.

Sentiment was supported by a declaration from Janet Yellen, U.S. President-elect Joe Biden’s nominee for Treasury Secretary, that the government had to “act big” on stimulus.

According to Reuters, a surge in debt-funded spending would be positive for the global economy and commodity prices, while more money-printing could put pressure on the U.S. Dollar.

Commodities saw the benefit with oil prices climbing anew, while an auction of dairy, New Zealand’s biggest export earner, produced a sharp 4.8% rise in prices.

Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7096 will signal a resumption of the downtrend. The main trend will change to up on a move through .7240.

The short-term range is .7003 to .7316. The NZD/USD is currently straddling its retracement zone at .7122 to .7160.

The minor range is .7316 to .7096. Its retracement zone at .7206 to .7232 is a potential upside target and resistance zone.

The main range is .6589 to .7316. If the downtrend resumes then its retracement zone at .6952 to .6867 will become the primary downside target area.

Daily Swing Chart Technical Forecast

The early price action suggests the Fibonacci level at .7122 is controlling the direction of the NZD/USD.

Bullish Scenario

A sustained move over .7123 will indicate the presence of buyers. This could trigger a quick move into .7160. Taking out this level could trigger an acceleration to the upside with the next target clustered at .7206, .7232 and .7240.

Bearish Scenario

A sustained move under .7122 will signal the presence of sellers. This could trigger a break into .7096.

Taking out .7096 will reaffirm the downtrend. If this move generates enough downside momentum then look for a possible acceleration into the next main bottom at .7003.

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

S&P 500 Price Forecast – Stock Markets Reach All-time Highs Again

The S&P 500 has rallied significantly during the trading session on Wednesday as we continue to see a drive into equities due to the idea of stimulus and of course everything that goes along with that. Ultimately, the stock market has been in an uptrend for ages and I do not see how that changes anytime soon. With this, I think that it is only a matter of time before we would see longer-term traders continue to hang on and newer traders continue to pile in. The consolidation area underneath suggests that we could go as high as 4000, based upon the measured move.

S&P 500 Video 21.01.21

Furthermore, we also have the uptrend line underneath that is far below, so I think that even if we got a 200 point pullback, it is very likely that there would still be plenty of buyers willing to get involved. The 50 day EMA sits just above the uptrend line as well, so that uptrend line will continue to be very important. However, the last couple of days have shown us plenty of bullish pressure, so I think that we are willing to continue going higher as it looks like the earnings season will be a disaster by any stretch of the imagination.

Stimulus will continue to be a main driver anyway, even though the earnings season might be a reason for the short term move. At the end of the day, Wall Street moves on cheap money and that is really all that matters. As long as liquidity is being tossed into the marketplace, the S&P 500 will continue to rally to the upside and towards that psychologically important 4000 handle.

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

Silver Price Forecast – Silver Markets Looking Towards 26 USD

Silver markets will continue to be bullish as long as we have a strong case for stimulus coming out the United States, and at this point in time I think the $26 level is very crucial to pay attention to. The $26 level has offered plenty of recent resistance, and if we can break above that level it is likely that we go looking towards the $27.25 level. Ultimately, this is a market that I think will continue to see upward pressure, so even if we do pull back, I would be looking at silver as a potential “buy on the dips” type of scenario. Ultimately, I think that the 50 day EMA of course attracts a certain amount of attention and so does the $24 level. The $24 level has been supportive more than once, and the fact that we have stayed above at and bounce from there suggests to me that it is the new “floor the market.”

SILVER Video 21.01.21

To the upside, I believe that we will be looking at the $28 level above as an area where there should be a significant amount of resistance. I do believe that ultimately, we will find reasons to get long given enough time. The market probably breaks above there based upon an announcement of stimulus that opens up the possibility of a move towards the $30 level over the longer term. If we can break above the top of the $30 level, then it opens up the floodgates for a much larger move longer term. At this point, I do not have a scenario in which a willing to sell this market anytime soon.

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

Crude Oil Price Forecast – Crude Oil Markets Quiet

WTI Crude Oil

The West Texas Intermediate Crude Oil market continues to be relatively noisy as we are hanging around the middle of the overall consolidation area between the $55 level on the top, with the $50 level on the bottom. This is a market that I think will continue to see a lot of noise overall, due to the fact that there are a lot of questions when it comes to overall demand. I do not see how demand picks up significantly, despite the fact that they are calling for stimulus to drive prices higher. If crude oil rallies, it is going to be due to the US dollar falling more than anything else as we had already seen a lack of demand before the pandemic hit.

Crude Oil Video 21.01.21

Brent

Brent markets were slightly positive during the trading session on Wednesday initially but gave back the gains as we are getting a bit exhausted. I think at this point we are starting to ask the question as to whether or not we can continue to go to the upside, and quite frankly I think at this point we are getting stretched. I do expect to see a bit of a pullback in the short term, perhaps back down towards the $50 level area. The Brent market will suffer at the lack of demand going forward, and therefore I believe that eventually we have to come to grips with the idea that simple stimulus will not be enough to send oil markets screaming to the upside any further. At this point in time, I think that short-term selling might be possible, but you need to be very cautious about overexposing yourself.

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

Natural Gas Price Forecast – Natural Gas Continues to Get Pummeled

Natural gas markets sold off significantly during the trading session on Wednesday to break down below the 200 day EMA. That being said though, I think that it is only a matter of time before we bounced a little bit in order to sell off yet again. Given enough time, I think that the market will probably go looking towards the $2.40 level, possibly even lower than that. After all, as the temperatures warm up in the United States, that will drive down the price of natural gas as the demand also drops.

NATGAS Video 21.01.21

To the upside, the $2.80 level offers a significant amount of resistance and I think now offers the “ceiling in the market” that we are waiting to see. Ultimately, I think that this is a market that cannot be bought under pretty much any circumstance, due to the fact that the demand of the United States will continue to drop, not only due to warmer temperatures but the fact that the economy is going to be slowing down. Stimulus does not matter, because quite frankly it did not matter before the pandemic.

Yes, there may be a sudden surge economically, but the fact that natural gas is typically used as a heating commodity does not bode well for the upcoming several months. As long as that is the case, I think that you continue to short signs of exhaustion after small bounces. All things being equal, this is a market that I have no interest in buying, at least not until we start talking about trading winter contracts again.

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

Gold Price Forecast – Gold Markets Rally Significantly

Gold markets have rallied significantly during the trading session on Wednesday to break above the recent resistance area and go looking towards the 50 day EMA. By doing so, the market is likely to continue to go higher over the longer term, perhaps reaching towards the $1900 level. I think that short-term pullbacks will continue to offer buying opportunities and therefore I think that this is a “buy on the dips” market going forward. This makes quite a bit of sense, because quite frankly there is a ton of stimulus coming, and of course there is a whole litany of potential problems out there that could have people running towards safety.

Gold Price Predictions Video 21.01.21

The 200 day EMA underneath should offer plenty of support, near the $1820 level. At this point, the $1800 level underneath is a large, round, psychologically significant figure, and the fact that we ended up forming a bit of a hammer suggests that we are probably going to continue to find plenty of support underneath, based upon not only the fundamental situation, but the structural and technical support level. I have no interest in shorting gold, I think that it is trying to form a longer-term basing pattern, as we will certainly see currency destruction be a theme of 2021 going forward, not just in the US dollar, but multiple other currencies around the world.

Gold serves far too many different reasons right now to think that you should be a seller. Ultimately, I believe that the market will eventually break out to fresh highs later this year so therefore I look for opportunities to pick up gold “on the cheap.”

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

Procter & Gamble Raises FY2021 Guidance; Stock Has 20% Upside Potential

Procter & Gamble, the world’s largest maker of consumer packaged goods, reported better-than-expected earnings in the fiscal second quarter and said it has raised its outlook for fiscal 2021 all-in sales growth to a range of 5-6% from the previous forecast of 3-5%.

Cincinnati, Ohio-based consumer goods corporation said its net sales rose 8% to $19.7 billion in the second quarter fiscal year 2021. Diluted net earnings per share increased 4% to were $1.47 and Core-EPS surged 15% to $1.64, beating the Wall Street consensus estimate of $1.51 per share.

Procter & Gamble raised its outlook for organic sales growth to a range of 5-6% from 4-5%. The Company said it now expects fiscal 2021 GAAP diluted net earnings per share growth in the range of 8-10% from fiscal 2020 GAAP EPS of $4.96. In addition, P&G upgraded their guidance for core earnings per share growth to a range of 8-10% from 5-8% versus fiscal 2020 core EPS of $5.12.

Procter & Gamble’s (PG) strong quarter should lift shares, improve sentiment for (lagging) HPC group -stock remains a Franchise Pick. We are focused on a “stronger for longer” theme in HPC w/ ’21 a transition year as the public gradually overcomes its trepidation toward the vaccine, though certain consumer behaviours sustain (cleaning, health & wellness, etc.), which should benefit PG and the group,” noted Kevin Grundy, equity analyst at Jefferies.

“At 22x P/E, PG (and our “core” HPC / beverages basket) are near relative lows vs. the S&P 500 last seen during the 08-09 downturn, leaving risk-rewards skewed to the upside. PG’s strong quarter should drive shares higher and offers a positive read-through for the group as Procter kicks off earnings season.”

However, Procter & Gamble shares traded 1.2% lower at $132.0 on Wednesday; the stock rose over 11% in 2020.

Procter & Gamble Stock Price Forecast

Twelve analysts who offered stock ratings for Procter & Gamble in the last three months forecast the average price in 12 months at $157.00 with a high forecast of $169.00 and a low forecast of $130.00.

The average price target represents an 18.82% increase from the last price of $132.14. From those 12 analysts, eight rated “Buy”, four rated “Hold” and none rated “Sell”, according to Tipranks.

Morgan Stanley gave a base target price of $165 with a high of $184 under a bull scenario and $103 under the worst-case scenario. The firm currently has an “Overweight” rating on the consumer goods corporation’s stock.

Several other analysts have also recently commented on the stock. JP Morgan lowered the target price to $159 from $163. Jefferies decreased the price objective to $168 from $169. Smith Barney Citigroup boosted their price objective to $165 from $159.

In addition, Truist boosted their price objective to $150 from $125. Wells Fargo & Company set an “overweight” rating and a $160.00 price objective for the company.

Equity Analyst’s View

“We expect a positive reaction to a strong FQ2 with a 2.5% top-line and 10.8% operating profit beat vs consensus, driven by strong 8% organic sales growth and an 80-bps gross margin beat vs consensus. Importantly, each segment organic sales growth was 5% or above, giving us greater confidence that PG momentum can continue going forward, as results were not narrowly driven by any one segment benefitting from COVID-19 demand. PG essentially flowed through almost all of Q2 EPS upside vs consensus to FY21 EPS guidance, which moved up by 250 bps at its midpoint, but we still view as overly conservative,” said Dara Mohsenian, equity analyst at Morgan Stanley.

“We believe strategy tweaks can sustain PG long-term top-line growth in the 4% range. In the US, a strong breadth of performance and share gains give us confidence that market share momentum is sustainable and supports long-term top-line growth above HPC peers. We see continued GM expansion with moderate commodity headwinds and a solid competitive environment. PG trades at 23x CY22e EPS, a discount to HPC peers CLX, CL and CHD, and looks compelling given our call for higher long-term PG growth.”

Check out FX Empire’s earnings calendar

Oil Gains Ground On Stimulus Optimism

Oil Video 20.01.21.

Oil Tries To Settle Above Multi-Month Highs

WTI oil made an attempt to settle above multi-month highs at $53.90 as traders focused on Joe Biden’s stimulus plans.

The market believes that Joe Biden will not face significant resistance against the $1.9 trillion stimulus package, and that the direct support to consumers will boost oil demand in the near term.

Judging by the recent coronavirus data from the U.S., traders should not expect strong virus containment measures which may deliver another blow to the domestic oil demand.

While Joe Biden has many times stated that he planned to boost coronavirus response, his measures will likely be focused on increased healthcare funding rather than restrictions on mobility which is good for the oil market.

Oil traders have successfully ignored the constant flow of bad news from Europe which struggles to contain the second wave of the virus, and it looks like only a true catastrophe may attract their attention. The market remains in a bullish mood, and expectations of another round of stimulus may serve as the catalyst that will push WTI oil towards the $55 level.

Analysts Expect That Crude Inventories Will Continue To Decline

The market’s optimism will soon get tested by crude inventory reports from API and EIA which will indicate whether the current oil demand is strong enough to push inventories to lower levels.

Currently, analysts expect that crude inventories will decrease by about 0.3 million barrels. The previous EIA Weekly Petroleum Status Report showed that crude inventories decreased by 3.2 million barrels and were about 8% above the five-year average for that time of the year.

Thus, the pace of crude inventory draw is expected to decrease. Inventories have been declining since early December so the continuation of this trend may provide psychological support to the market. At the same time, a sudden increase in crude inventories may hurt the market’s mood as oil remains near multi-month highs which increases its sensitivity to such news.

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

AUD/USD and NZD/USD Fundamental Daily Forecast – ‘Risk On’ Sentiment Chasing Out Weak Short-Sellers

The Australian and New Zealand Dollars are trading higher on Wednesday helped by a weaker U.S. Dollar and the hope of huge fiscal stimulus from the Biden administration to combat the effects of coronavirus on the economy. Meanwhile, the economic news in Australia remained mostly positive.

At 10:53 GMT, the AUD/USD is trading .7733, up 0.0035 or +0.45% and the NZD/USD is at .7137, up 0.0020 or +0.28%.

Traders are now looking forward to the inauguration of President Joe Biden at 17:01 GMT and a speech that follows. Early Thursday, Australia will release its latest data on Employment Change and the Unemployment Rate. Early Friday, New Zealand will release its latest report on consumer inflation.

More US Fiscal Stimulus to Come

Demand for riskier currencies is being supported by a declaration from Janet Yellen, U.S. President-elect Joe Biden’s nominee for Treasury Secretary, that the government had to “act big” on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of a higher debt burden.

Yellen also said that the value of the dollar should be determined by markets, a break from departing President Donald Trump’s desire for a weaker U.S. currency.

“The United States does not seek a weaker currency to gain competitive advantage and we should oppose attempts by other countries to do so,” she said.

Australian Consumer Confidence Clouded by COVID-19 in January Survey

A measure of Australian consumer sentiment slipped from a decade high in January as new outbreaks of COVID-19 in Sydney and Brisbane spooked people, though the spread has now been contained with relatively few cases and no deaths, Reuters Reported.

The Westpac-Melbourne Institute Index of Consumer Sentiment released on Wednesday fell 4.5% in January, from December, when it rose 4.1%.

The index is still 41% above a nadir hit back in April when COVID-19 lockdowns were at their height, and 14.6% up on January last year. At 107.0, the index implies optimists clearly outnumber pessimists.

“A pullback in the index was to be expected,” said Westpac’s chief economist, Bill Evans. “Since the last survey we have seen domestic border closures; the emergence of COVID clusters in some states; and the sharp upswing in COVID cases overseas, notably the U.S. and the U.K.”

Daily Forecast

A surge in debt-funded spending would be a positive for the global economy and commodity prices, while more money-printing could put pressure on the U.S. Dollar.

Commodities saw the benefit with oil prices climbing anew, while an auction of dairy, New Zealand’s biggest export earner, produced a sharp 4.8% rise in prices.

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

Natural Gas Price Fundamental Daily Forecast – Bulls May Be Close to Throwing in the Towel on Winter Cold

Natural gas futures are trading lower at the midsession on Wednesday as hopes for an extreme cold snap fade with every new weather forecast calling for milder trends over the near-term.

The early pressure was fueled by the European model, which trended milder, putting it about 10-12 heating degree days warmer compared to previous runs over the past 24 hours, NatGasWeather said on Wednesday.

At 14:54 GMT, March natural gas futures are trading $2.477, down $0.052 or -2.06%.

NatGasWeather also said the American model added demand overnight, “but the European had been colder, and the natural gas markets were likely hoping the frostier scenario would come through,” the firm said. “Not to be the case, as the weather data disappoints yet again, as it’s done in almost all instances the past two winters.”

There’s still a “decent” amount of national demand expected starting this weekend through January 29, NatGasWeather said.

“However, the natural gas markets were clearly hoping for frigid air over Western Canada to push more aggressively across the Midwest and Northeast instead of only modest cold shots arriving,” according to the firm. “Also at issue, the pattern is now quite bearish for February 1-3 as warm upper high pressure builds over most of the U.S. besides the West Coast and far East for light national demand.”

Short-Term Weather Outlook

According to NatGasWeather for January 20 to January 26, “A cold shot will track across the Great Lakes and interior Northeast today with chilly highs of 20s & 30s. Most of the rest of the U.S. will be mild with highs of 40s to 60s for light national demand. Colder weather systems will push into the West and Northern Plains with rain and snow late this week with lows of -10s to 30s, then spreading across the rest of the northern U.S. this weekend for a swing to strong national demand.”

Daily March Natural Gas

Short-Term Outlook

Thursday’s U.S. Energy Information Administration (EIA) Weekly Storage report is likely to be a non-event because the data represents conditions for the week-ending January 15 and traders are focusing on next week’s heating demand and the possibility of bearish weather for February 1 – 3.

There’s still a shot at some decent demand next week, but it’s only supposed to be a spike lower in temperatures rather than a lingering cold spell. That’s not enough to wake up the bull.

The daily chart pattern suggests the bearish tone is likely to continue on a sustained move under $2.485, but we could see a short-covering surge if buyers can recover $2.552 with conviction.

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

Bank Earnings Off to a Rough Start

Even so, the group has booked major gains since November when positive vaccine data from Pfizer Inc. (PFE) triggered a sustained rotation out of COVID-19 beneficiaries and into 2021 recovery plays. As a result, current selling pressure appears technical in nature, driven by overbought readings.

Bond yields are rising while the yield curve steepens, signaling a more favorable banking environment that should generate higher profit margins. Revenue remains a major obstacle, with most quarterly reports so far posting substantial year-over-year revenue declines as a result of the pandemic. Dow component JPMorgan Chase and Co. (JPM) is the only bank of the big three to grow revenue in the quarter, in line with its longstanding market leadership.

JPMorgan Chase

JPMorgan Chase lifted to an all-time high ahead of last week’s strong earnings report and pulled back in a notable sell-the-news reaction. Two days of profit-taking could mark the start of an intermediate correction that targets unfilled gaps at 120 and 126. The Nov. 9 breakout gap between 105 and 110 remains unfilled as well, but that might not come into play until later in the year. When it does, it should mark a low-risk buying opportunity.

Bank of America

Bank of America Corp. (BAC) lost nearly 1% on Tuesday after beating Q4 2020 profit estimates and falling short on revenue, with a 9.9% year-over-year decline. Credit loss provisions dropped sharply during the quarter, indicating less stress on customer budgets as the world adjusts to the COVID-19 pandemic. The company announced it would buy back up to $2.9 billion in common stock in the first quarter, after getting Federal Reserve approval.

Citigroup

Citigroup Inc. (C) has booked the greatest downside of the three banks after beating Q4 2020 earnings by a wide margin on Friday. However, revenue fell 10.2% year-over-year, triggering a shareholder exodus that’s now relinquished nearly 8%. Unlike Bank of America, Citi credit losses went in the wrong direction during the quarter, rising to 3.73% of total loans, compared to just 1.84% in the same quarter last year.

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

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

Silver Price Daily Forecast – Silver Tries To Settle Above $25.55

Silver Video 20.01.21

Silver Continues To Move Higher

Silver is currently testing the resistance at the 20 EMA at $25.55 while the U.S. dollar is mostly flat against a broad basket of currencies ahead of Joe Biden’s inauguration.

The U.S. Dollar Index has recently made an attempt to settle below the support at the 20 EMA at 90.35 but failed to develop sufficient downside momentum and rebounded closer to 90.50. The next resistance level for the U.S. Dollar Index is located at 90.70. If the U.S. Dollar Index moves above this level, it will gain additional upside momentum which may put some pressure on silver and gold price today.

Meanwhile, gold is testing the resistance at the 20 EMA at $1865. The next resistance is located at the 50 EMA at $1870, so gold will likely face significant resistance in the $1865 – $1870 area. A move above this resistance area will open the way to the $1900 level which will be bullish for silver and other precious metals.

Gold/silver ratio made an attempt to settle below the 73 level but did not manage to gain downside momentum. If gold/silver moves towards the 72 level, silver will get additional support.

Technical Analysis

Silver managed to get above the resistance at $25.30 and is trying to settle above the next resistance level at the 20 EMA at $25.55. In case silver manages to settle above this level, it will head towards the next resistance at $25.85.

A move above this level will push silver towards the resistance at $26.30. There are no important levels between $25.85 and $26.30, and previous moves in this area were fast.

On the support side, the previous resistance level at $25.30 will likely serve as the first support level for silver. The next support level is located at the 20 EMA at $25.20. If silver declines below the 20 EMA, it will get to the test of the next support level at $25.00. This support level has already been tested during the current trading session and proved its strength so silver may need additional catalysts to settle below $25.00.

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

USD/JPY Price Forecast – US Dollar Pulls Back from 104 JPY Level.

The US dollar has pulled back a bit against the ¥104 level, an area that has been important more than once. In the short term, it looks as if the market is simply going back and forth and trying to figure out what it wants to do next. We have been in a longer term downtrend, so I think at this point in time the market probably continues to go to the downside. Short-term rally should continue to offer selling opportunities right around that ¥104 level, and I think that the resistance probably extends all the way to the ¥105 level.

Near the ¥103.50 level, I think there is a certain amount of support in that general vicinity that is worth paying attention to, especially if we can break down below there. If we do break down below there, then it is likely that we go down towards the ¥102.50 level, perhaps even lower than that. We have been in a very extended downtrend for a while, and I simply just do not see that changing in the short term.

Furthermore, if we are going to massive amounts of stimulus, one would have to think that eventually the US dollar needs to continue going lower. What makes this trade a little bit more confusing at times is the fact that it also is highly sensitive to risk appetite, so it is a little bit of a “push/pull” type of situation in the short term, and that explains a lot of the choppiness that is seen on the chart.

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

GBP/USD Price Forecast – British Pound continues to Bang Against Ceiling.

The British pound has rallied to kick off the trading session on Wednesday on the bullish foot. However, the market has pulled back from the 1.3750 level again, an area that seems to be a bit of an issue in general. With this being the case, I think that the market probably finds pullbacks as attractive, especially near the 1.35 handle underneath as it is not only a large, round, psychologically significant figure, but it is also an area that features the 50 day EMA now.

Because of this, I think what we are looking at here is the opportunity for value hunters to come back into the marketplace and take advantage of what is typically going to be thought of as “cheap pounds.”

The 50 day EMA itself of course attracts a lot of attention, but at the end of the day I think what we are seeing here is the likelihood of a “continuation of the buy on the dips attitude” that we have seen for so long. Stimulus is one of the main drivers of this pair to the upside, and although we already know that there is going to be more stimulus coming out of the United States, the reality is that we do not know how much of it there will truly be at the end of the day.

Because of this, I think what we are looking at is an opportunity to take advantage of what has been a very strong trend, but currently is suffering at the hands of a little bit of doubt when it comes to whether or not the stimulus package is going to be as massive as once thought.

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

GBP/JPY Price Forecast – British Pound Fails to Break Through Resistance.

The British pound has rallied a bit during the trading session on Wednesday, but continues to struggle with the ¥142.50 level, as we have pulled back significantly from that level. Nonetheless, this is a market that will continue to be supported underneath, as there are plenty of buyers on dips from everything that we have seen. The more, I do think that the “risk on trade” will probably continue to be the favored one, but we have a lot of work above that we need to get through.

The ¥140 level underneath continues to be rather important from not only a large, round, psychological important figure standpoint, but the fact that it has previously been both structurally supportive as well as resistive. Because of this, I think that we probably get a short-term pullback towards that area before we may get a bit of extended buying pressure. The 50 day EMA sits just below the ¥140 level as well, so that makes that area interesting from that standpoint. Furthermore, the trend has clearly been to the upside when it comes to the British pound in general, so there is no need in fighting that.

It appears that the trend is trying to build up enough momentum to go to the upside even further, so even though this candlestick suggests that we are going to fall in the short term, I do not like the idea of shorting this pair, rather I think that we are more than likely going to continue to see a deaf opportunities to buy the dip that it is exactly what we should be doing over the longer term.

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

EUR/USD Price Forecast – Euro Continues to Grind Sideways.

The Euro initially tried to rally during the trading session on Wednesday but then turn things around to show signs of negativity. At this point, it looks like we are probably going to go down towards the 1.20 level, although I am not necessarily looking to sell this pair. Quite frankly, this is a pullback that is desperately needed, and therefore I think that it is welcomed by both bullish and the parish traders alike.

The ECB has been active behind the scenes doing what is tantamount to yield curve control, so that may work against the Euro going forward. The Euro has been rising rather rapidly and although there has been no direct intervention in the currency markets, the reality is that the market had gotten far ahead of itself as it reached towards the 1.23 level. The weekly chart looks somewhat ominous, but really at the end of the day I think there are plenty of buyers near the 1.20 level, extending down to the 1.19 level where buyers would be looking for value based upon the idea of stimulus in the United States.

However, it should be noted that the $1.9 trillion stimulus package that Joe Biden suggested is not necessarily a “slam dunk”, and I think at this point in time it is likely that we will see a lot of noise when it comes to the idea of that stimulus shrinking the US dollar. The consensus is of course that the US dollar continues to fall in value, but we had gotten so overextended that a correction was desperately needed. We are still in the midst of that correction.

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