S&P 500 Price Forecast – Stock Markets Run Out of Momentum

S&P 500 Technical Analysis

The S&P 500 had tried to rally early during the Monday session in the futures market but has run into a little bit of a brick wall as we continue to see a lot of noisy behavior. Because of this, the market is more likely than not going to continue to see a hesitation, and perhaps a pullback. After all, we are very much in a downtrend, despite the fact that the Friday session was so explosive. You could probably make a little bit of an argument for portfolio rebalancing being the culprit on Friday, or quite frankly just short-covering heading into the weekend.

Regardless, the 50 Day EMA is racing toward the 4000 level, so I think it has something to say as well. I have been looking for an opportunity to short this market on signs of exhaustion, and I may be getting it right now. I have no interest in buying the S&P 500, at least not until we break above the 4200 level. In the meantime, it’s about being patient and picking your spots. I will start with a small position, and then add if it starts to move in my direction. Short selling is a little bit of an art form, and not something that is easily quantified all of the time. It’s about sentiment, it’s about fear, and it’s about risk management.

It should be noted that anytime I short a stock or an index, I always do it with about half the risk that I would be buying it. The reason being is that they are not designed to fall for long periods of time.

US Stock Market Forecast Video for 28.06.22

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

Silver Price Forecast – Silver Gives Up Early Gains on Monday

Silver Markets Technical Analysis

Silver markets have had a push higher to kick off the week on Monday but have also turned around and gained back most of the gains as we continue to see silver underperform any other assets. After all, the interest rate situation in the United States continues to climb, suggesting that people are becoming more concerned about a recession. If that’s going to be the case, people then have to worry about whether or not there is going to be enough industrial demand for silver going forward.

It currently looks as if the $22 level above is a major resistance barrier, so therefore it does make a certain amount of sense that we will continue to look at it as a “ceiling.” A break above there does open up the possibility of a move to the $22.50 level, where I expect even more resistance. The 50 Day EMA is at the $22.29 level and dropping, suggesting that perhaps there is much more in the way of downward pressure coming.

The market recently had formed a bit of a “double bottom,” but whether or not that hold is a completely different question altogether. After all, the market has been very negative for a while, so breaking through that area certainly would make sense. After all, the market is going to focus on the longer-term fundamentals, which right now do not look very good. With this, I continue to “fade the rallies” as they occur, because quite frankly I do not expect to see much of a change in attitude any time soon. We would have to break above the $22.50 level to take a rally seriously.

Silver Price Forecast Video for 28.06.22

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

Crude Oil Price Forecast – Crude Oil Markets Continue to Build Momentum

WTI Crude Oil Technical Analysis

The West Texas Intermediate Crude Oil market has pulled back a bit during the trading session on Monday, as we continue to see a lot of volatility in general. However, the crude oil market has rallied again to threaten the 50 Day EMA. With that being the case, the market is likely to see a push above the 50 Day EMA, and then possibly a move to reach the $120 level over the longer term. That being said, the market is likely to see a lot of volatility, so you will have to be cautious about jumping in with a huge position. However, the trend is still very much upside, especially as the trend line has held so nicely.

If we were to break down below the uptrend line, then I would be paying close attention to the $100 level. If we were to break down below there, then it’s possible that we could begin something a little bit more devastating, but that does not look to be the case at the moment.

Crude Oil Prices Forecast Video for 28.06.22

Brent Crude Oil Technical Analysis

Brent markets also have a nice trendline that has helped keep it alive, and it now looks as if it is going to threaten the 50 Day EMA over here as well. If we can break above there, then Brent could go to the $120 level next, possibly even the $125 level. Again, I don’t think that this is a straight shot, rather I think it is going to continue to be a situation where it is very volatile and choppy, but upward trajectory still looks to be the most likely of outcomes.

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

Natural Gas Price Forecast – Natural Gas Markets Approaching The 200 Day EMA

Natural Gas Technical Analysis

Natural gas markets initially fell on Monday but did recover to reach the top of the Friday range. That being said, the $6.50 level should now be resistance based upon “market memory, and at the first signs of exhaustion, I will be shorting this market. Yes, the 200 Day EMA sits below but that doesn’t necessarily mean anything. The natural gas demand will be decimated by the fact that Germany and several other European countries are now switching to coal.

The end of the massive bullish run coincided with the Freeport terminal announcing that it would not be repaired as soon as once thought, meaning that LNG exports out of the United States would be hampered. This forces the Europeans to either start buying Russian gas, or switch to coal. So far, it looks like they are more than willing to switch to burning coal, and therefore the European demand situation is not as big of a factor in the Henry Hub contract. After all, this is a contract that is typically more or less focused on US domestic demand, so that is why we have seen such a massive unwind.

Rallies at this point I would treat with suspicion, and even if we did break above the $6.50 level, then I would look at the $7.00 level for a shorting opportunity, followed by the 50 Day EMA which is currently at the $7.44 level and dropping. Historically speaking, these prices for natural gas are ridiculous, especially as natural gas is not exactly hard to find in the United States. Eventually, I anticipate that we go back toward the $4.00 level.

Natural Gas Price Forecast Video for 28.06.22

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

Gold Price Forecast – Gold Markets Give Back Early Gains

Gold Market Technical Analysis

Gold markets have gapped higher to kick off the trading session on Monday, as G7 members announced that they are banning the import of Russian gold. That being said, we have given back all of those gains, and it looks as if it has ultimately had very little effect on the market. We are still very much in range-bound trade, with the $1800 level underneath being the bottom. We need to pay close attention to that level because if it does get violated, it could lead to further selling.

The US dollar has been the currency du jour for most of the last several months, and I think it will continue to be so. As long as that’s going to be the case, gold will have a difficult time rallying for anything more than a short-term bounce. However, if we were to take out the $1880 level above, then you could see further buying, perhaps sending this market as high as $2000. I do think that eventually happens, but it’s not happening in the short term and it looks like rallies continue to run into a buzzsaw of selling pressure.

The 200 Day EMA is completely flat, and the 50 Day EMA is just above it and flattening out as well. This suggests that we have nowhere to be, and that may be somewhat expected as it is the summertime, and this can be a very quiet time of year. I have a range of $80 clearly marked out on the chart, and until we violate one side or the other, I have to assume that it holds.

Gold Price Predictions Video for 28.06.22

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

Natural Gas Price Fundamental Daily Forecast – Heightened Volatility Expected Ahead of July Futures Expiration

Natural gas futures are edging lower on Monday, hovering near an 11-week low as a drop in liquefied natural gas (LNG) exports due to the extended shutdown of the Freeport LNG export plant in Texas continues to offset worries about hotter weather and higher demand.

At 14:30 GMT, August natural gas futures are trading $6.112, down $0.169 or -2.69%. The United States Natural Gas Fund ETF (UNG) opened at $20.79, down $0.50 or -2.35%.

Short-Term Weather Forecast

According to NatGasWeather for June 27 – July 3, “Nice to warm conditions will rule most of the interior US Monday –Wednesday as weather systems bring showers and comfortable highs of 60-80s. Hotter exceptions will be across the West Coast, South Texas, and portions of the Southeast with highs of 90s to 100s due to upper high pressure.

National demand will increase late in the week as the interior US warms into the 80s and 90s, although cooling across the Northwest and Upper Midwest.

Overall, moderate-high demand through Wednesday, then high thru Sunday.

Daily Forecast

The Freeport LNG issue is going to be a problem until at least September, but most likely until December. So traders are going to be baking in the news of the shutdown for months to come.

In the meantime, the focus will be on the bearish-trending fundamentals:  higher production, weaker LNG export volumes and seasonal temperatures.

Analysts at EBW Analytics Group see “moderate bearish weather shifts” for the first week of July, weaker LNG feed gas volumes and rising production.

Additionally, “Dry gas production readings are up more than 1.0 Bcf/d since late last week and may continue to climb through Thursday,” EBW senior analyst Eli Rubin said. “There is even an outside chance the supply could challenge year-to-date highs this week before likely turning lower in early July.”

Bespoke Weather Services is also leaning toward the bearish side, observing higher production and falling LNG volumes in the latest estimates over the weekend.

Technically speaking, August natural gas may have to test $5.865 before new money comes into the market.

Furthermore, we could see heightened volatility or even a short-term reversal of the downtrend with the upcoming July futures contract expiration.

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

Can Central Banks Fight Inflation Without Causing A Recession?

Monetary Policy and Inflation in the Last 12 Months

Over the last 12 months, inflation has spread to every corner of the economy with primary Cost of Living Expenses from Food, Fuel, Rent, Clothing and Energy prices – rising at double-digit annual rates for the first time since the early 1980s.

Earlier this month, in a “belated response” to the fastest rise in inflation seen in over 40-years – the Federal Reserve raised interest rates by 75 basis points – the biggest increase since 1994 with Fed Chairman Jerome Powell signalled yet another jumbo sized hike in July.

There is no denying that the Fed has fallen “way behind the curve” in tackling inflation and is now in a high-stakes race – trying desperately to play catch up!

And the Fed is not alone on this journey.

One day after the Federal Reserve’s biggest interest-rate hike in 30 years – many other central banks jumped on the Rate Hike bandwagon, scrambling desperately not be left behind – in what can only be described as a panic move – unleashing havoc across the financial markets.

This month, the Swiss National Bank made a surprise 50 basis points rate hike for the first in 15 years. While the Bank of England moved rates to the highest level in 13 years as it anticipates inflation to hit 11% this year.

Elsewhere, the Reserve Bank of Australia equally surprised the market with a 50 basis point hike, while The Reserve Bank of New Zealand and The Bank of Canada followed suit with their own 50 basis point rate hikes.

In total, more than 60 central banks faced with rapidly surging inflation have now joined the global race to hike rates aggressively at any at any cost necessary.

This is return as increased the odds of a recession to 85% – with a long list of leading Wall Street banks predicted “significant risk” of a recession by mid-2023.

Incoming Events

Looking ahead, more big moves could be on the horizon as the European Central Bank kicks off its three-day forum on Monday against a backdrop of concerns over whether central bank moves to stamp out the strongest inflation surge in four decades could tip the global economy into a recession.

The forum will be focusing on “challenges for monetary policy in a rapidly changing world” – hosted by ECB President Christine Lagarde, along with Fed Chair Jerome Powell and Bank of England Governor Andrew Bailey.

Also on the radar this week will be the closely watched U.S PCE Inflation, Eurozone Inflation and U.S GDP data releases, which always have the potential to move the markets significantly.

Commodity Price Forecast Video for the Week

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

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

USD/JPY Price Forecast – US Dollar Recovers Against the Japanese Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar initially fell during trading on Monday but then turned around to show signs of life again. The ¥135 level continues to be crucial, so it is worth paying close attention to. The overall uptrend looks as if it is going to continue as one would anticipate. After all, the Bank of Japan has reiterated its desire to do anything it takes to keep interest rates low, meaning that they are still in a quantitative easing mode.

At this juncture, it’s likely that every time we pull back, there will be buyers willing to get involved but it’s also worth noting that the market has gotten a little bit overextended, so having said that I think it’s probably a buying opportunity on dips more than anything else. The recent high just above the ¥136 level could be a little bit of a barrier, but if we can break above there, then the “buy-and-hold” momentum continues.

The ¥132.50 level underneath is an area that I think will be supportive as well, especially with the 50 Day EMA racing towards that area. Underneath there, the ¥130 level is also an area that I would have to pay close attention to as it was previous resistance and it is a large, round, psychologically significant figure. At this point, the Federal Reserve looks as if we are ready to continue to see quantitative Titan, so this becomes more or less a “one-way bet.” In fact, it’s not until one of these central banks changes their attitude that this market has any real shot at breaking down. In general, I believe we go much higher over the longer term.

USD/JPY Price Forecast Video 28.06.22

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

GBP/USD Price Forecast – The British Pound Gives Up Early Gains

British Pound vs US Dollar Technical Analysis

The British pound has pushed higher to kick off trading on Monday but has since seen the US dollar strengthen again. Ultimately, this is a market that I think will try to find lower pricing, but we had seen a couple of hammers previously, suggesting that we are in an area of tight consolidation. Eventually, the market is going to have to decide which way it wants to go, but longer-term it looks like the downtrend is still very much intact.

When I look at the start, I suspect that we will test the bottom again, which is at the 1.20 region. This is an area that is a large, round, psychologically significant figure, and an area where a lot of people will be fighting at. If a breakdown below there, then it’s likely that the British pound goes much lower, perhaps reaching the 1.18 level, and in the 1.16 level. A lot of this comes down to the Federal Reserve, and what it is going to do, as it remains extraordinarily tight. On the other side of the Atlantic, you have the Bank of England not looking nearly as aggressive as the Fed.

On the upside, the 1.25 level should be a significant resistance barrier, so if we were to break above there it would be interesting, but I would not consider it a major break out until we get above the 1.26 level. If that were to happen, then the British pound could find itself all the way up at the 1.30 level, the next major resistance barrier.

GBP/USD Price Forecast Video 28.06.22

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

GBP/JPY Price Forecast – The British Pound Continues to Chop Around

British Pound vs Japanese Yen Technical Analysis

The British pound has gone back and forth during the trading session on Monday as we continue to hover above the ¥165 level. The market looks as if it is trying to break through that recent barrier near the ¥168.50 level, but currently is simply building up the pressure more than anything else. It looks like buyers are willing to come back into the market near the ¥165 level, so pay close attention to it.

The Bank of Japan continues to fight rising interest rates through quantitative easing, being one of the very few central banks in the world doing so. Because of this, the Japanese yen will continue to struggle against most other currencies, the British pound included.

If we were to break down below the ¥165 level, then it’s possible that we could drop to the 50 Day EMA, maybe even the ¥162.50 level. I do anticipate that there would be a lot of support there, but the overall trend is defined at the ¥160 level underneath, where we had bounced from so significantly just a couple of weeks ago. Furthermore, it is a large, round, psychologically significant figure, and therefore a lot of people will pay close attention to it anyway.

The one thing that could work against this pair is if we see a lot of panic trading, meaning that people are jumping into the Japanese yen for safety. That trade has gone away a bit though, as the bond yields in Japan or just simply not enough to keep up with inflation. Because of this, the market will continue to see a lot of noisy behavior.

GBP/JPY Price Forecast Video 28.06.22

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

EUR/USD Price Forecast – Euro Gives Up Early Gain

Euro vs US Dollar Technical Analysis

The Euro has rallied to kick off the Monday session but has given back to the early gain to show signs of hesitancy again. By doing so, the market looks as if it is ready to continue the overall malaise that we have seen recently, with the US dollar strengthening against almost everything. The Federal Reserve continues to tighten monetary policy, and of course, the ECB is in no position to start tightening monetary policy anytime soon.

When you look at this chart, you can see that there is a double bottom underneath, near the 1.04 region. The 1.04 level is an area that I think will continue to see a lot of interest, so if we were to break down below there, it would indeed be a very negative turn of events for the Euro. At that point, I would anticipate the market could reach the 1.02 level, and then the parity level. I believe that we had parity sometime this summer, but it needs to be tempered with the idea that almost anything is possible in this type of trading environment. Ultimately, I think the market will continue to see a lot of choppy volatility, and therefore you need to be cautious with your position size and be nimble getting in or out of the market as things are moving so quickly.

Just above, we have the 50 Day EMA sloping toward price, and I think it is probably only a matter of time before it comes into the picture to offer dynamic resistance. I still believe in selling rallies in this pair, until the Federal Reserve changes its attitude, something that it has not done yet.

EUR/USD Price Forecast Video 28.06.22

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

AUD/USD Price Forecast – The Australian Dollar Pulled Back to Kick Off the Week

Australian Dollar vs US Dollar Technical Analysis

The Australian dollar has fallen on Monday, to kick off the week on its back foot. Ultimately, the 0.6850 level is an area that I think could offer a significant amount of support, as we have seen action there previously. I think it is going to end up being a 50 PIP support level that extends down to the 0.68 handle, so once we get below that level, I think we have a high likelihood of the Aussie continuing to go lower.

The Australian dollar is highly levered to commodity markets, so pay attention to those as well. There is concern about a global slowdown, as the economy seems to be crumbling. If that’s going to be the case, it’s likely that we would see the Aussie suffer as a result. Furthermore, you need to pay close attention to China, and how is behaving. Keep in mind that the Australian dollar tends to be very sensitive to the Chinese mainland, which is currently in the process of trying to stimulate the economy, so you will have to keep an eye on how things pan out there.

The Federal Reserve continues the tight monetary policy, so that does favor the US dollar in general, especially as it looks like the Federal Reserve is insistent on becoming aggressive. As long as that’s going to be the case, the US dollar will continue to be relatively strong against multiple currencies, not just in the AUD/USD pair. Furthermore, if we continue to see a lot of “risk off behavior”, it’s possible that the US dollar will gain as well.

AUD/USD Price Forecast Video 28.06.22

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

EUR/USD Forex Technical Analysis – Underpinned as Financial Futures Traders Cap Fed Hike Expectations

The Euro is edging higher against the U.S. Dollar on Monday as the European Central Bank’s annual forum in Sintra got underway with ECB President Christine Lagarde and Federal Reserve Chair Jerome Powell both attending the meeting. Traders will be keenly watching for any signs of future policy moves.

At 11:54 GMT, the EUR/USD is trading 1.0569, up 0.0012 or +0.12%. On Friday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $97.59, up $0.19 or +0.20%.

Helping to boost the single currency is a weaker greenback. The U.S. Dollar is struggling as traders reassessed the prospects of aggressive rate hikes.

Futures pricing shows traders now anticipating the U.S. Federal Reserve’s benchmark funds rate stabilizing around 3.5% from March next year, a pullback from pricing in rates zooming to around 4% in 2023.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom on June 15.

A trade through 1.0774 will change the main trend to up. A move through 1.0359 will negate the reversal bottom and signal a resumption of the downtrend.

The short-term range is 1.0774 to 1.0359. The EUR/USD is currently testing its retracement zone at 1.0567 to 1.0616. This zone stopped the buying at 1.0606 on June 22.

The minor range is 1.0359 to 1.0606. Its 50% level or pivot at 1.0482 is support.

If there is a breakout to the upside then 1.0770 will become the primary upside target.

Daily Swing Chart Technical Forecast

Trader reaction to 1.0567 is likely to determine the direction of the EUR/USD on Monday.

Bullish Scenario

A sustained move over 1.0567 will indicate the presence of buyers. The first upside target is the minor top at 1.0606, followed by the short-term Fibonacci level at 1.0616. If this move generates enough momentum then look for an acceleration to the upside with the price cluster at 1.0770 – 1.0774 the next upside target.

Bearish Scenario

A sustained move under 1.0567 will signal the presence of sellers. If this creates enough downside momentum then look for the selling pressure to extend into the short-term pivot at 1.0482.

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

Daily Gold News: Monday, June 27 – Gold is Closer to the $1,850 Price Level Again

Gold Price Recap

The gold futures contract gained 0.03% on Friday, June 24, as it further extended its short-term consolidation along the $1,800-1,850 price level. The market went sideways despite the previous week’s important FOMC’s release. This morning gold is trading higher, as we can see on the daily chart (the chart includes today’s intraday data):

Precious Metals Price Action

Gold is 0.5% higher this morning, as it is trading closer to the $1,850 price level again. What about the other precious metals? Silver is 1.6% higher, platinum is 0.3% higher and palladium is 3.0% higher. So the main precious metals’ prices are higher this morning.

Fundamentals and Economic News Schedule

Friday’s UoM Consumer Sentiment release has been as expected at 50.0 and the New Home Sales release has been better than expected at 696,000. Today we will get the Durable Goods Orders and Pending Home Sales releases.

The markets will still continue to react to the ongoing Russia-Ukraine war news.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days.

Monday, June 27

  • 8:30 a.m. U.S. – Durable Goods Orders m/m, Core Durable Goods Orders m/m
  • 10:00 a.m. U.S. – Pending Home Sales m/m
  • 1:30 p.m. Eurozone – ECB President Lagarde Speech
  • All Day – G7 Meetings

Tuesday, June 21

  • 4:00 a.m. Eurozone – ECB President Lagarde Speech
  • 8:30 a.m. U.S. – Goods Trade Balance, Preliminary Wholesale Inventories m/m
  • 9:00 a.m. U.S. – HPI m/m, S&P/CS Composite-20 HPI y/y
  • 10:00 a.m. U.S. – CB Consumer Confidence, Richmond Manufacturing Index
  • All Day – G7 Meetings

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

Paul Rejczak
Stock Trading Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were 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 believed to be accurate, Paul Rejczak 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. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s 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. Paul Rejczak, 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.

 

E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Supported by Lower Rate Hike Outlook

September E-mini Dow Jones Industrial Average futures are edging higher shortly before the cash market opening on Monday, while attempting to build on last week’s gains. Despite the current technical bounce and short-covering rally, the blue chip average is still poised to finish the worst half for stocks in decades.

At 10:23 GMT, September E-mini Dow Jones Industrial Average futures are trading 31580, up 93 or +0.30%. On Friday, the SPDR Dow Jones Industrial Average ETF (DIA) finished at $315.12, up $8.38 or +2.73%.

The average surged on Friday as investors reduced their expectations on Federal Reserve rate hikes amid indications of a slowdown in economic growth. U.S. rate futures priced in a 73% probability of a 75 basis-point increase at the July meeting. For September the market has factored in a 50-bps rise.

In the cash market, the Dow Jones Industrial Average is on track to mark its worst first half of the year in more than 50 years as the Fed tightens monetary policy in its fight against the highest inflation in four decades.

Although bottom-picking and short-covering helped the market finish the week higher for the first time since May, investor expectations bouncing between continued high inflation and a recession caused by a hawkish Fed, indicate that volatility is likely to remain the theme for months.

Daily September E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through 33255 will change the main trend to up. A move through 29639 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. It changed to up last week when buyers took out the minor top at 30999.

The short-term range is 33255 to 29639. The E-mini Dow is currently testing its retracement zone at 31447 to 31874. Trader reaction to this area will determine the near-term direction of the E-mini Dow.

The main range is 35405 to 29639. Its retracement zone at 32599 to 33261 is the next major upside target.

The minor range is 29639 to 31695. Its trailing pivot at 30667 is the nearest support.

Daily Swing Chart Technical Forecast

Trader reaction to the short-term 50% level at 31447 is likely to determine the direction of the September E-mini Dow Jones futures contract into the close on Monday.

Bullish Scenario

A sustained move over 31447 will indicate the presence of buyers. This could trigger a surge into the short-term Fibonacci level at 31874.

Since the main trend is down, sellers could come in on the first test of 31874. Overtaking it, however, could trigger an acceleration into the main retracement zone at 32599 to 33261.

Bearish Scenario

A sustained move under 31447 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to extend into the trailing pivot at 30667.

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

Gold Price Futures (GC) Technical Analysis – Rangebound Amid Rate Hike, Recession Worries

Gold futures are edging higher on Monday as traders assess the impact of a G7 ban on bullion imports from Russia. The move is likely just a knee jerk reaction to the development since many of the major gold centers around the world have been shunning Russian gold since March 25.

Four of the Group of Seven (G7) rich nations moved to ban imports of Russian gold on Sunday to tighten the sanction squeeze on Moscow and cut off its means of financing the invasion of Ukraine, according to Reuters.

At 09:30 GMT, August Comex gold is trading $1839.70, up $9.40 or +0.51%. On Friday, the SPDR Gold Shares ETF (GLD) settled at $169.99, down $0.27 or -0.16%.

Today’s reaction to the ban on Russian bullion is likely to be short-lived with traders returning quickly to the more traditional influences on gold prices:  rate hikes and recession. Gold traders are also waiting for U.S. Dollar investors to get off the fence and pick a direction for the next major moves. Gold is a dollar-denominated commodity so it will react to any volatility by the greenback.

Daily August Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1861.50 will change the main trend to up. A move through $1806.10 will signal a resumption of the downtrend.

The minor trend is also down. A trade through $1850.30 will change the minor trend to up. This will shift the momentum. A trade through the minor bottom at $1817.77 will reaffirm the downtrend.

On the downside, the support is a retracement zone at $1837.30 to $1826.60. On the upside, the resistance is a long-term Fibonacci level at $1844.00 and a short-term 50% level at $1854.80.

Daily Swing Chart Technical Forecast

Trader reaction to the long-term Fibonacci level at $1844.00 is likely to determine the direction of August Comex gold early Monday.

Bearish Scenario

A sustained move under $1844.00 will indicate the presence of sellers. The first downside target is the 50% level at $1837.30.

A failure to hold $1837.30 could trigger a break into the short-term Fibonacci level at $1826.60. If this level is broken then look for a retest of the minor bottom at $1817.77.

Bullish Scenario

A sustained move over $1837.30 will signal the presence of buyers. This could trigger a surge into the major Fibonacci level at $1844.00.

Overtaking and sustaining a rally over $1844.00 will indicate the buying is getting stronger. However, buyers are still facing potential resistance at $1850.30, $1854.80 and $1861.50.

I don’t think we’ll see a strong breakout to the upside until buyers take out $1861.50 with conviction.

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

Crude Oil Price Update – Tight Range as Traders Hope G7 Provides Catalyst for Next Move

U.S. West Texas Intermediate crude oil futures are trading mixed early Monday as investors await the next catalyst to drive the price action. Ahead of the start of the New York session, traders were monitoring the events at the Group of Seven (G7) nations in Germany for potential announcements that could affect the current supply tightness.

In other news, traders are expecting OPEC and its allies, known as OPEC+, to stick with its plan for accelerated oil output increases in August when it meets on June 30. In early July, President Biden is scheduled to visit Saudi Arabia. The trip is likely to make headlines, but it would come as a surprise if Biden were able to influence Saudi oil policy.

At 08:48 GMT, August WTI crude oil is trading $107.46, down $0.16 or -0.15%. On Friday, the United States Oil Fund ETF (USO) settled at $81.24, up $2.26 or +2.86%.

The more pressing news currently controlling the price action are growing concerns over the potential for a global recession. Helping to save the market from an even bigger loss last week, however, was a weaker U.S. Dollar and a rebound in U.S. stock markets.

Daily August WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through $100.66 will change the main trend to down. A move through $120.88 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through $116.58 will change the minor trend to up.

The main range is $86.81 to $120.88. Its retracement zone at $103.85 to $99.82 is support. This zone stopped the selling at $101.53 on June 22.

The minor range is $116.58 to $101.53. The first upside target is its pivot at $109.06. The short-term range is $120.88 to $101.53. Its retracement zone at $111.21 to $113.49 is the primary upside target area.

Daily Swing Chart Technical Forecast

Trader reaction to $105.64 is likely to determine the direction of the August WTI crude oil market on Monday.

Bullish Scenario

A sustained move over $105.64 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the first pivot at $109.06. Overtaking this level is likely to trigger an acceleration into the short-term retracement zone at $111.21 to $113.49.

Bearish Scenario

A sustained move under $105.64 will signal the presence of sellers. If this generates enough selling pressure then look for the move to extend into the main 50% level at $103.85.

Buyers could come in on the first test of $103.85. If it fails, however, then look for a further break into last week’s low at $101.53, followed by the main Fibonacci level at $99.82.

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

CAD/JPY Breakout Above the Pattern

CAD/JPY Technical Analysis

  • Buying the dips
  • Bullish trend
  • M H5 is the next target
  • MA angle is sharp

MEGATREND MAs: Bullish

Daily CAD/JPY

  1. Point 1
  2. Point 2
  3. Point 3
  4. Target zone

The CAD/JPY is undergoing a strong trend. The trend is bullish and I expect the market to push further up. At this point MEGATREND is showing a good potential for continuation of a long trend with new entries shown in the chart. Additionally, the Bank of Japan presented the summary of the June meeting, not adding a real lot to what we already knew from this unchanged policy meeting.

Board members did express concern about a sharply falling yen though. But they still do nothing about it and we see that there is no intervention in the open market yet. There is no strong data for the JPY this week but we will see mr.Powell speaking in the next few days so it might add also to Yen volatility. Equities will also move along with the Yen.

This analysis is a part of the Megatrend trading course. I have 2 long positions that I will maintain. The intraday target is 105.67 while the intraweek target is 106.05. There is no swing target yet as first we need to see M H5 taken away and only then we will see the continuation of a trade as a swing position.

Cheers and safe trading,

Nenad

E-mini S&P 500 Index (ES) Futures Technical Analysis – Needs Another Dip in Yields to Extend Rally

September E-mini S&P 500 Index futures are inching lower in the pre-market session on Monday after last week’s major turnaround. Despite the technical bounce, the benchmark index is still in a position to post its worst first half of the year in decades.

The major market players are still trying to determine whether stocks have formed a bottom, or if they are just recovering from severely oversold conditions.

At 02:15 GMT, September E-mini S&P 500 Index futures are trading 3908.00, down 8.25 or -0.21%. On Friday, the S&P 500 Trust ETF (SPY) settled at $390.05, up $11.99 or +3.17%.

The index surged on Friday as investors reduced their expectations on Federal Reserve rate hikes amid indications of a slowdown in economic growth. U.S. rate futures priced in a 73% probability of a 75 basis-point increase at the July meeting. For September the market has factored in a 50-bps rise.

Daily September E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher.

A trade through 4204.75 will change the main trend to up. A move through 3639.00 will signal a resumption of the downtrend.

The minor trend is up. It changed up last week when buyers took out the minor top at 3843.00. This shifted momentum to the upside.

The short-term range is 4204.75 to 3639.00. Its retracement zone at 3922.00 to 3988.75 is the primary upside target. It’s also controlling the near-term direction of the index.

Daily Swing Chart Technical Forecast

Trader reaction to 3922.00 is likely to determine the direction of the September E-mini S&P 500 Index early Monday.

Bullish Scenario

A sustained move over 3922.00 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the Fibonacci level at 3988.75. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 3921.75 will signal the presence of sellers. If this move is able to generate enough downside momentum then look for a near-term break into 3780.75.

Side Notes

The retracement zone at 3922.00 to 3988.75 is controlling the near-term direction of the index. Since the main trend is down, sellers are likely to come in on a test of 3922.00 to 3988.75. They are going to try to form a potentially bearish secondary lower top.

Aggressive counter-trend buyers are going to try to drive the index through the Fibonacci level at 3988.75.

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

Gold Continues to Drift Lower as Focus Remains on Rate Hikes and Recession

Inflation, Interest Rates and Recession

Chairman Powell’s testimony before Congress this week painted a dire economic outlook which will include the continued contraction of the national GDP coupled with continued interest rate hikes.

During his testimony, it was evident that there was a subtle difference in his word track that was uncharacteristic and a dramatic change from his usual refined method. The chairman made it clear that the Federal Reserve has one goal in mind above all others and that is to reduce the level of inflation. They emphatically stated that the actions of the Federal Reserve will most likely lead to a recession rather than a soft landing.

Yahoo finance captured his overall demeanor in a most articulate manner saying, “He said a recession caused by the Fed’s own monetary tightening remains a “possibility.” A soft landing, with higher rates but a still-healthy economy, would be “very challenging” to achieve. And Powell said the Fed’s fight against inflation was “unconditional,” meaning nothing will stand in its way.”

The revisions by the Federal Reserve to their monetary policy most certainly would contract the economy and bring on a recession. A recession is defined as “a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

The last GDP report revealed that the United States had an economic expansion leading to a 6.9% growth in the GDP for Q4 of 2021. If advanced estimates for the GDP Q1 are correct it will indicate a decrease in the real gross domestic product (GDP) for the first quarter of this year. The last occurrence of a contracting GDP quarter to quarter occurred during Q2 of 2020. However, the following quarter (Q3 2020) revealed a robust increase in national GDP.

This is why next week’s report is so critical. On Wednesday, June 29 the BEA (Bureau of Economic Analysis) will release the U.S. GDP first-quarter report. According to the advanced estimate released on April 28, “Real gross domestic product (GDP) decreased at an annual rate of 1.5 percent in the first quarter of 2022, according to the “second” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 6.9 percent.”

Currently, there is a high probability that the actions of the Federal Reserve will lead to a recession. The question is not whether or not the United States will enter recession but rather when the recession will begin and how long the recession will last.

How Does These Factors Impact Gold?

Gold daily chart

While a recession can stabilize gold pricing, and higher inflation certainly creates a bullish undertone for the precious yellow metal, rising interest rates have become a primary focus on the future price of gold and has pressured pricing lower since March of this year. Gold has declined just over 12% from the highs of $2070 in March to gold’s current pricing of $1828. While it seems as though there is strong support for gold at $1800 depending on how aggressive the Federal Reserve becomes in regards to further rate hikes.

Besides the GDP report due out on Wednesday, on Thursday the government will release its latest core inflationary numbers when the U.S. PCE price index report is published.

For, those who would like more information simply use this link.

Wishing you as always good trading,

Gary S. Wagner