E-mini S&P 500 Index (ES) Futures Technical Analysis – Early Strength Over 4697.25, Weakness Under 4685.00

December E-mini S&P 500 Index futures jumped on Tuesday, with the technology sector leading gains, as investors piled back into tech heavyweights and semiconductors in particular after Intel announced plans to take its self-driving car unit public.

The S&P tech sector saw its best daily percentage gain since early November of last year, while the Philadelphia Semiconductor Index posted its biggest rise since early March of this year. Both indexes ended at record highs.

On Tuesday, December E-mini S&P 500 Index futures settled at 4685.00, up 95.00 or +2.03%. The S&P 500 ETF Trust (SPY) ETF finished at $468.25, up $9.46 or +2.06%.

Daily December 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 4717.00 will change the main trend to up. A trade through 4740.50 will reaffirm the uptrend. A move through 4492.00 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through 4697.25 will indicate the momentum is getting stronger.

The short-term range is 4740.50 to 4492.00. The market is trading on the strong side of its 50% level at 4616.25, making it support.

The minor range is 4492.00 to 4697.25. Its 50% level at 4594.50 is additional support. It will move up as the index moves higher.

The major support zone is 4500.25 to 4443.50. This area stopped the selling at 4492.00 on December 3.

Daily Swing Chart Technical Forecast

The direction of the December E-mini S&P 500 Index early Wednesday is likely to be determined by trader reaction to 4685.00.

Bullish Scenario

A sustained move over 4685.00 will indicate the presence of buyers. Taking out 4697.25 will indicate the buying is getting stronger with the next target 4717.00.

Taking out 4717.00 will change the main trend to up. This could trigger an acceleration to the upside with the all-time high at 4740.50 the next major target price.

Bearish Scenario

A sustained move under 4685.00 will signal the presence of sellers. If this move creates enough downside momentum the look for the selling to possibly extend into the pair of pivots at 4616.25 and 4594.50.

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

Invesco Dynamic Building & Construction ETF Continues its Upward Movement

The infrastructure sector of the United States economy has been performing excellently thanks to President Biden’s focus on the area. This has allowed stocks and exchange-traded funds (ETFs) in the sector to rally so far this year.

Invesco Dynamic Building & Construction ETF Remains a Strong Fund

The Invesco Dynamic Building & Construction ETF (PKB) is one of the best-performing funds in the construction sector of the US market. The fund has been around since 2005 and provides investors broad exposure to the Industrials ETFs category of the market.

PKB currently has nearly $300 million in assets under management, making it one of the average-sized funds in the Industrials ETFs. The fund is managed by asset manager Invesco and seeks to match the performance of the Dynamic Building & Construction Intellidex Index before fees and expenses.

The index comprises stocks of US building and construction companies. PKB has performed excellently since the start of the year. Year-to-date, PKB’s value has increased by more than 28%, making it one of the top performers in the market. The fund could rally higher if the current market momentum is maintained.

PKB Could Target the $60 Mark Soon

PKB continues to perform excellently as the construction sector of the US economy blossoms. At press time, PKB is trading at $54.41 per share, up by more than 1.8% since the US market opened a few hours ago.

PKB’s RSI is heading into the overbought region. Source: FXEMPIRE

The MACD line is well above the neutral zone, indicating bullish momentum for the Invesco Dynamic Building & Construction ETF. The RSI of 63 shows that the ETF is heading into the overbought region.

If the current market momentum is maintained, then PKB could rally towards the $60 level over the coming trading sessions. An extended rally before the end of the year would allow the Invesco Dynamic Building & Construction ETF to make a move for the $65 mark.

Operating expenses on an annual basis for the fund are 0.60% for PKB, which is similar to most ETFs in the space. PKB has a 12-month trailing dividend yield of 0.22%.

Tradeweb Shares Gain with Big Money

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Tradeweb has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares all year.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the big money signals TW has made the last year.

The last few weeks have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In 2021, the stock has attracted 12 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

  • 3-month outperformance vs. Financial Select Sector SPDR Fund (+7.8% vs. XLF)

Outperformance is important for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Tradeweb has been growing sales at a double-digit rate. Take a look:

  • 3-year sales growth rate (+13.0%)
  • 3-year earnings growth rate (+35.3%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, TW has been a top-rated stock at my research firm, MAPsignals, for over a year. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

TW has a lot of qualities that are attracting Big Money. And since 2019, it’s made this list 8 times, with its first appearance a bit more than a year ago on 5/19/2020… and gaining 55.37% since. The blue bars below show the times that Tradeweb was a top pick since 2019:

Source: www.mapsignals.com

It’s been a top stock in the financial sector according to the MAPsignals process. I wouldn’t be surprised if TW makes additional appearances in the years to come. Let’s tie this all together.

The Bottom Line

The Tradeweb rally could have further to go. Big money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds no positions in TW in personal or managed accounts at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

https://mapsignals.com/contact/

 

Teradyne Has a Big Money Story

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Teradyne has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares all year.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the big money signals TER has made the last year.

The last few weeks have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In 2021, the stock has attracted 14 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

  • 1-month outperformance vs. Technology Select Sector SPDR Fund (+8.1% vs. XLK)

Outperformance is important for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Teradyne has been growing sales at a double-digit rate. Take a look:

  • 3-year sales growth rate (+14.5%)
  • 3-year earnings growth rate (+57.0%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, TER has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

TER has a lot of qualities that are attracting Big Money. And since 2015, it’s made this list 18 times, with its first appearance on 11/1/2016… and gaining 556.95% since. The blue bars below show the times that Teradyne was a top pick since 2015:

Source: www.mapsignals.com

It’s been a top stock in the technology sector according to the MAPsignals process. I wouldn’t be surprised if TER makes additional appearances in the years to come. Let’s tie this all together.

The Bottom Line

The Teradyne rally could have further to go. Big money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds long positions in TER in managed accounts at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

https://mapsignals.com/contact/

 

Deleveraging COVID Bubble – Possible Volatility Risks In Foreign Markets

I get asked all the time what my opinions are regarding the markets. As much as I could go into really deep details regarding technical analysis and other factors of my research, the simple answer is that we’ve been living through 2~4+ years of incredible market trends and unprecedented global central bank efforts to support and contain market risks. This is something we have not seen at these levels since the end of WWII and after the Great Depression.

Is there a Speculative Bubble Deleveraging Risk In The Global Markets?

The one thing that keeps popping up in my mind is the deleveraging of credit/debt and speculative risk assets over the next 2 to 3+ years. Let me explain what I mean by this statement.

Before the first COVID event (February 2020), the global markets were already within a moderate strengthening phase with relatively stable global trade, economic, and central bank participation. Everyone was still waiting for inflation to rise while employment and economic data continued to strengthen. When COVID hit, things changed very quickly.

  • Global lockdowns disrupted the labor and supply markets.
  • Consumers shifted gears while settling (or moving) into more rural locations attempting to wait out the new COVID threat.
  • Global central banks and governments attempted to navigate the catastrophic COVID event while settling population and finance issues.
  • An unprecedented amount of stimulus, global central bank financing, and speculative capital was unleashed over a very short 3 to 4-year span of time.
  • The success of the global economy prior to 2020 prompted a very deep and efficient speculative market trend in 2020 and beyond.
  • Now, that speculative bubble appears to be bursting – at least in certain areas of the markets.

Let’s explore a bit of data and charts.

This first Monthly chart highlights trends in various global market indexes. ARKK, the ARK Innovation Fund, HSI, the Hang Seng Index, DAX, the DAX Index, SPY, the S&P 500 ETF, and HXC, the Golden Dragon China Index. Each of these represents a unique component of global markets and sectors.

ARKK represents technology, innovation, and a more broad global investment style focused on stronger or more highly volatile price trends.

HSI represents a broad market China Index that includes various markets sectors – including Technology, Medical, Consumer, Real Estate, Finance, and others. These companies are listed in China and do a majority of their business in China.

DAX represents a broad market German Index.

SPY represents a broad market US Index

HXC represents the US-listed Chinese Companies doing a majority of their business in China.

The purpose of showing you this chart is to highlight the deleveraging that is already taking place in ARKK, HXC, and the HSI. The DAX and the SPY are still trending higher, while the ARKK, HSI, and HXC are trending strongly to the downside.

Chart, histogram

Description automatically generated

It is my opinion that the global markets, particularly China/Asia, are already in the midst of a massive speculative deleveraging event – a post-bubble rally phase initial collapse process. Certain technicians sometimes call this an “unwinding” or “unraveling” event. Ultimately, the US has seen two of these types of events over the past 30 years – the 1999-2000 DOT COM bubble burst and the 2008-09 Housing Market collapse.

What I found interesting is the HXC price levels have already fallen to levels near the March 2020 COVID lows. Whereas the HSI price levels have also fallen to very near the March 2020 COVID lows, it has also fallen into negative price trending from 2014-15 price levels.

Could Speculative Deleveraging Stay Localized This Time?

I think global volatility and bigger price trends will be something we need to prepare for in 2022 and 2023 – possibly even longer. Yet, my opinion is the US, and other stronger global economies may be partially immune from this speculative deleveraging event.

Why?

Because not every US corporation or citizen has put themselves in a similar scenario as I believe many in China and Asia possibly have after nearly 30+ years of extreme growth trends.

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The US has experienced the 1999-2000 DOT COM bubble and the 2008-09 Housing Market crisis over the past 30 years. At the same time, China/Asia has grown from moderate obscurity in the 1980s-1990s into extensively powerful economies. Along the way, over a relatively short period of time, a generation or two of the populous has seen assets rise thousands of percent over the past 20 years. This leads to a highly speculative investment class – almost feeling as though anything they touch turns to gold.

But it doesn’t always work out that way – does it?

This HXC chart highlights the incredible rally after the February 2020 COVID event as well as the moderate growth phase from 2005 to 2016. Notice the big growth that took place in 2017. This was a period of very strong economic growth where Chinese companies started listing on US exchanges to tap into a strong US investor class.

After COVID hit in 2020, this speculative investing trend skyrockets over 180%. Then, it collapsed.

Chart, histogram

Description automatically generated

Bitcoin May Follow This Deleveraging Trend If Panic Sets In

The recent rally and peak in Bitcoin have also caught my interest in seeing if this deleveraging event follows through in large Cryptos? Since the initial Bitcoin collapse in early 2021, Bitcoin has rallied strongly as the US markets recovered and inflation started to rise later in 2021. Now, a very strong pullback in Bitcoin has started at the same time large Chinese Real Estate developers and other corporations are beginning to experience severe credit/debt concerns.

Is there a correlation between Chinese/Asian consumer/economic strength and Bitcoin? Has the rise in Bitcoin prices over the past since 2015 been fueled by the rising speculative and investment trends in China/Asia?

We’ll know soon enough.

Chart, histogram

Description automatically generated

If the global markets continue this process of speculative trading deleveraging, we’re going to see an increase in volatility and deeper price trends take place before the process completes. I suspect there is a huge amount of underlying credit/debt that is struggling in certain areas of the world right now. This type of speculation tends to drive a mentality of FOMO (fear of missing out) and YOLO (you only live once). I remember after the DOT COM bubble burst, I would talk to people that were so entrenched in the bubble, and they bought all the way through the collapse – believing it would bounce back.

This deleveraging event should stay somewhat immune from certain larger market economies. Yes, there will likely be more volatility and bigger price swings. But, eventually, the strength of consumers and economic trends will settle most of this process fairly quickly for the largest global economies.

2022 and 2023 are sure to be great years for traders. Sectors will rotate and trend. The world’s strongest economies will rotate and trend. The increased volatility will create risks, but it will also create incredible opportunities for profits.

Get ready; it looks like this deleveraging event is just getting started.

Want to learn more about deleveraging and volatility risks in the markets?

Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.

If you need technically proven trading and investing strategies using ETFs to profit during market rallies and to avoid/profit from market declines, be sure to join me at TEP – Total ETF Portfolio.

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

Have a great day!

Chris Vermeulen
Chief Market Strategist

 

Crude Oil Price Update – Resistance at $73.13 – $73.43 Primary Upside Target; New Support $67.18 – $66.06

U.S. West Texas Intermediate crude oil futures are trading higher shortly after the New York opening on Tuesday as concerns over the impact of the Omicron coronavirus variant on global fuel demand eased.

The market was also underpinned by the news of another stall in the Iran nuclear talks. Additionally, in another sign of confidence in oil demand, the world’s top exporter, Saudi Arabia, raised monthly crude prices on Sunday. Finally, China’s imports of crude oil rebounded in November from the previous month’s lows, but were still about 8% below the levels of a year earlier.

At 15:06 GMT, January WTI crude oil futures are trading $71.39, up $1.90 or +2.73%. The United States Oil Fund (USO) ETF is at $51.89, up $1.38 or +2.73%.

Later today at 21:30 GMT, the American Petroleum Institute (API) will release its weekly inventories data. It is expected to show U.S. crude inventories are likely to have fallen for a second straight week last week.

Daily January WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the confirmation of the daily closing price reversal bottom on December 2.

A trade through $62.43 will negate the chart pattern and signal a resumption of the downtrend. The main trend will change to up on a trade through $79.23.

The short-term range is $79.23 to $62.43. The market is currently testing its retracement zone at $70.83 to $73.43.

The main range is $83.83 to $62.43. Its retracement zone at $73.13 to $75.66 is the next potential target zone.

The combination of these two zones forms a potential resistance cluster at $73.13 to $73.43. Since the main trend is down, sellers are likely to come in on a test of this area.

The new minor range is $62.43 to $71.93. Its retracement zone at $67.18 to $66.06 is the nearest potential support area.

Daily Swing Chart Technical Forecast

The direction of the January WTI crude oil market into the close on Tuesday is likely to be determined by trader reaction to $70.83.

Bullish Scenario

A sustained move over $70.83 will indicate the presence of buyers. Taking out the intraday high at $71.93 will indicate the buying is getting stronger. This could trigger a further rally into a series of retracement levels at $73.13, $73.43 and $75.66.

Sellers could come in on a test of these levels especially the $73.13 – $73.43 resistance cluster.

Bearish Scenario

A sustained move under $70.93 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor retracement zone at $67.18 to $66.06 over the near-term.

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

Silver Price Daily Forecast – Silver Stays Glued To Support At $22.30

Silver ETF Is Mostly Flat Despite Stronger Dollar And Higher Treasury Yields

Silver has recently made another attempt to settle below the support at $22.30 but failed to develop sufficient downside momentum and moved higher while the U.S. dollar gained ground against a broad basket of currencies. Meanwhile, iShares Silver Trust is trying to settle back above $20.80.

The U.S. Dollar Index is currently testing the resistance level at 96.50. In case this test is successful, the U.S. Dollar Index will move towards the next resistance at 96.70 which will be bearish for silver and gold price today.

Gold failed to settle below the support at $1775 and rebounded towards $1780 while SPDR Gold Trust moved towards $166.50. In case gold manages to settle above $1780, it will try to gain additional upside momentum and move closer to the 50 EMA at $1795 which will be bullish for silver.

Gold/silver ratio faced strong resistance near the 80 level and pulled back towards 79.50. In case gold/silver ratio manages to settle below this level, it will head towards 79 which will be bullish for silver.

It should be noted that the yield of 2-year Treasuries moved to yearly highs today, but higher yields failed to put pressure on gold and silver.

Technical Analysis

silver december 7 2021

Silver continues to trade near the support level at $22.30. In case silver stays above this level, it will move towards the resistance at $22.60.

A successful test of the resistance at $22.60 will push silver towards the next resistance level which is located at $22.90. In case silver gets above $22.90, it will head towards the resistance at $23.20.

On the support side, a move below the support at $22.30 will push silver towards the next support level at $22.10. If silver gets below this level, it will head towards the support at $21.90. A successful test of the support level at $21.90 will open the way to the test of the next support at $21.50.

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

EUR/USD Mid-Session Technical Analysis For December 7, 2021

The Euro is trading lower against the U.S. Dollar on Tuesday, hurt by expectations that the U.S. Federal Reserve will tighten policy more quickly than the dovish European Central Bank.

Weak business sentiment in the Euro Zone also pressured the single currency, while hopes that the Omicron variant of COVID-19 would be less severe than previously expected boosted risk appetite and consequently demand for the higher-yielding U.S. Dollar.

At 14:23 GMT, the EUR/USD is trading 1.1240, down 0.0044 or -0.39%. On Tuesday, the Invesco CurrencyShares Euro Trust (FXE) ETF settled at $104.96, down $0.26 or -0.25%.

In economic news, German investor sentiment deteriorated in December as a fourth wave of COVID-19 infections and persistent supply bottlenecks in manufacturing clouded the growth outlook for Europe’s largest economy, the ZEW survey showed.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1186 will reaffirm the downtrend. A move through 1.1608 will change the main trend to up.

The minor trend is up. A trade through 1.1186 will change the minor trend to down. A move through 1.1383 will reaffirm the uptrend.

The EUR/USD is trading on the weak side of a long-term Fibonacci level at 1.1291, making it resistance. Additional resistance is a 50% level at 1.1397.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to 1.1291.

Bearish Scenario

A sustained move under 1.1291 will indicate the presence of sellers. If this move continues to generate enough downside momentum then look for an eventual test of 1.1186. This is followed closely by the June 19, 2020 main bottom at 1.1168.

Bullish Scenario

A sustained move over 1.1291 will signal the presence of buyers. If this move creates enough upside momentum then look for a near-term drive into the minor top at 1.1383, followed by the pivot at 1.1397.

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

Price of Gold Fundamental Daily Forecast – Traders Playing Waiting Game with Omicron

Gold futures are trading mostly flat on Tuesday as improved risk sentiment drives down demand for the non-yielding, non-interest bearing asset. A firmer U.S. Dollar is also capping gains as well as a slight rise in U.S. Treasury yields.

Underpinning the market is uncertainty over the potential impact of the Omicron coronavirus variant. Although early reports from South African doctors say that Omicron variant cases are generally mild, global experts are warning it’s still too early to know just how dangerous it is.

White House Chief Medical Advisor Dr. Anthony Fauci said Sunday that the initial data on the variant is “encouraging,” though he cautioned that more information was needed to fully understand it.

At 11:06 GMT, February Comex gold futures are trading $1780.80, up $1.30 or +0.07%. On Monday, the SPDR Gold Shares (GLD) ETF settled at $166.24, down $0.39 or -0.23%.

Global Equity Markets Strengthen Overnight

While gold traders take a “wait and see” approach to Omicron, global stock market investors appear to be looking past the potential impact from the new coronavirus variant.

U.S. stock futures jumped early Tuesday after rebounding from last week’s sell-off during yesterday’s session. Futures on the Dow Jones Industrial Average rose 345 points. S&P 500 futures rose 1.3% and NASDAQ-100 futures were up 1.8%.

On Monday, the blue-chip Dow gained nearly 650 points. The benchmark S&P 500 Index jumped 1.1% with all 11 sectors registering gains. The NASDAQ Composite reversed higher to end the day up 0.9%.

One telltale sign that investors aren’t too worried about Omicron, which doesn’t bode well for higher gold prices – the rally was led by travel-related stocks such as airlines and cruise line operators.

Weaker Safe-Haven Currencies

Another sign pointing toward increasing demand for riskier assets is the stronger U.S. Dollar. Early Tuesday, the dollar is being supported against safe-haven currencies such as the Japanese Yen, hanging on to an overnight jump made with U.S. yields as investors hoped early signs the omicron variant may be mild will be proved correct.

The safe-haven Japanese Yen nursed a 0.6% overnight drop, its largest in two weeks, at 113.47 per dollar. The Swiss Franc, another safe-haven currency, suffered its largest one-day percentage fall in nearly three months on Monday. Dropping through its 200-day and 50-day averages.

Daily Outlook

I’m pointing most of the indicators gold traders should be watching for clues as to the direction of the market’s next major move.

Gold is not going to move higher or lower on its own. It’s going to need a catalyst. Right now the catalysts are bearish. They include rising yields, a stronger U.S. Dollar, and increased risk sentiment.

Fundamentally, the catalyst is likely to be the omicron. When the reports from scientists come out, they are going to show it’s resistant to vaccines or it’s not. I think that is the question gold traders are waiting to be answered. If vaccines work against Omicron then gold prices should fall further. If the virus is resistant to vaccines then gold has a chance to rally.

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

Oil Price Fundamental Daily Forecast – Testing Key Resistance Zone as Traders Bet on Low Omicron Impact

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are moving higher early Tuesday, building on yesterday’s almost 5% rally. Traders are saying the rally is being fueled by dampened concerns over the impact of the Omicron coronavirus variant on global demand and stalled Iran nuclear talks that will delay the return of Iranian crude oil to the open market.

At 08:52 GMT, January WTI crude oil is trading $71.06, up $1.57 or +2.26% and February Brent crude oil is at $74.53, up $1.45 or +1.98%. On Monday, the United States Oil Fund (USO) ETF settled at $50.49, up $2.49 or +5.19%.

This week’s rally represents a follow-through of the bottoming action that took place late last week after OPEC+ agreed to continue raising output by 400,000 barrels per day in January despite the release of U.S. strategic petroleum reserves.

OPEC and its allies also promised to make adjustments to production if the Omicron COVID-19 variant leads to demand destruction. That pledge gave traders the confidence they needed to reverse the selling pressure, igniting the start of the counter-trend rally.

Shorts Spooked, Specs Buying as Omicron Fears Ease

While Omicron has spread to about one-third of the U.S. states as of Sunday, Dr. Anthony Fauci, the top U.S. infectious disease official, told CNN that “thus far it does not look like there’s a great degree of severity to it.”

“The absence of negative developments surrounding Omicron over the weekend appears to be helping markets stabilize today after the dramatic moves at the end of last week,” Marc Chandler, chief market strategist at Bannockburn Global Forex, said in a note.

Prospect of Imminent Rise in Iranian Oil Exports Recedes

Indirect U.S.-Iranian talks on saving the 2015 Iran nuclear deal broke off until next week as European officials voiced dismay on Friday at sweeping demands by Iran’s new, hardline government.

Germany wants Iran to present realistic proposals in talks over its nuclear program, a Foreign Ministry spokeswoman said on Monday, adding that offers Tehran made last week almost all violate previously agreed compromises.

Its proposals are “not a basis for a successful end to talks,” she said. “We reviewed the proposals…carefully and thoroughly and concluded that Iran violated almost all compromises found previously in months of hard negotiations.”

Short-Term Outlook

January WTI traders could face a technical challenge on Tuesday at $70.83 – $72.81. The key area February Brent traders will be watching is $73.83 – $75.73. Trader reaction to these areas will determine the near-term direction of the markets.

The wildcard is the Omicron coronavirus variant. So far we know little about it, but what we know is not causing a bearish reaction in the market place.

Scientists continue to study the variant and could release a report by the end of the week. If they determine the vaccines are effective against the variant then prices could surge into mid-November levels. If the variant is resistant to vaccines then we could see a near-term retest of last week’s lows.

Later on Tuesday at 21:30 GMT, the American Petroleum Institute (API) will release its weekly inventories report. It is expected to show a drawdown for a second straight week.

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

USD/JPY Fundamental Daily Forecast – 115.615 or 112.538 – Depends on Omicron Response to Vaccines

The Dollar/Yen is trading higher on Tuesday after reassuring news on the Omicron coronavirus variant drove up demand for riskier assets. U.S. Treasury yields and stocks rose on the news that initial observations suggested Omicron patients had only mild symptoms, erasing all of Friday’s heavy losses.

At 06:41 GMT, the USD/JPY is trading 113.696, up 0.197 or +0.17%. On Monday, the Invesco CurrencyShares Japanese Yen Trust (FXY) ETF settled at $82.70, down $0.79 or -0.71%.

Potential Impact of Omicron Being Downplayed

While Omicron has spread to about one-third of the U.S. states as of Sunday, Dr. Anthony Fauci, the top U.S. infectious disease official, told CNN that “thus far it does not look like there’s a great degree of severity to it.”

“The absence of negative developments surrounding Omicron over the weekend appears to be helping markets stabilize today after the dramatic moves at the end of last week,” Marc Chandler, chief market strategist at Bannockburn Global Forex, said in a note.

Yen Retreats as Risk Sentiment Returns to Wall Street

The Dow led Wall Street shares higher on Monday, as economy-linked banks and energy stocks charged back and fear about the Omicron variant eased, even as investors braced for another roller-coaster ride like last week’s, Reuters wrote.

The tech-heavy NASDAQ was also up but lagged the Dow and S&P 500’s gains, facing early headwinds from chipmakers mainly due to a slide in Nvidia.

Wall Street’s major indexes swung wildly last week as investors digested news of the COVID-19 Omicron variant and Federal Reserve Chair Jerome Powell’s hawkish comments about a speedier taper to tackle surging inflation.

Treasury Yields Climb

U.S. Treasury yields are edging higher early Tuesday after posting a strong rebound the previous session, following Friday’s pullback, with investors monitoring the omicron COVID-19 variant and the Federal Reserve’s potential policy tightening.

Japan Economic News

Japan’s household spending posted an annual drop for the third straight month in October, though the pace of decline slowed, as consumer sentiment struggled to stage a convincing recovery after coronavirus curbs ended.

The world’s third-largest economy has lagged other nations in its recovery from the heath crisis, most due to sluggish consumption. Analysts expect consumer sentiment to pick up this quarter as local COVID-19 infections fell.

Household spending fell 0.6% in October from a year earlier, after a 1.9% decline in September and a 3.0% drop in August, government data showed, matching the median market forecast in a Reuters poll.

Short-Term Outlook

Strong demand for risk and rising Treasury yields are expected to continue to support the USD/JPY on Tuesday. The wildcard is the Omicron coronavirus variant. So far we know little about it, but what we know is not causing a bearish reaction in the market place.

Scientists continue to study the variant and could release a report by the end of the week. If they determine the vaccines are effective against the variant then the USD/JPY could shoot up to 115.615 rather quickly. If the variant is resistant to vaccines then look for a plunge under 112.538.

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

iShares U.S. Home Construction ETF Reaches a New 52-Week High

The financial markets took a hit earlier this month, but exchange-traded funds (ETFs) continue to perform excellently. President Biden’s infrastructure plan has benefited numerous construction-focused stocks.

ITB Continues its Rally

The iShares U.S. Home Construction ETF (ITB) has been one of the best performing ETFs in its category in recent months. The fund has now hit a new 52-week high and could rally higher over the coming weeks.

The ETF tracks the performance of the underlying Dow Jones U.S. Select Home Builders Index, which is a subset of the Dow Jones U.S. Household Goods Index. The index is a free-float adjusted market capitalization-weighted index and measures the performance of the home construction sector of the U.S. stock market.

ITB has been rallying thanks to the increase in demand for new and existing homes in the face of increasing housing prices and supply-chain disturbances. As a result, home builders have benefited the most in this period. Interest rates have dipped on the Omicron variant of the COVID-19 fear.

ITB Could Rally Towards $90

At press time, ITB is trading at $80.89 per share, up by more than 2% during the previous trading session. The ETF has performed excellently since the start of the year, adding more than 45% to its value during that period. In the past month, ITB’s value has increased by more than 8%.

ITB’s technical indicators are very strong. Source: FXEMPIRE

ITB’s technical indicators are looking positive at the moment, thanks to the fund’s latest performance. It is trading above its 50-day moving average of $72.69, while the MACD line is way above the neutral zone and into the bullish territory. The RSI of 70 shows that ITB is heading into the overbought region.

The iShares U.S. Home Construction ETF could continue with its recent rally and reach the $90 mark over the coming weeks. Its performance would depend on the demand for housing and the state of the supply chain sector.

AUD/USD and NZD/USD Fundamental Daily Forecast – RBA ‘Prepared to be Patient’ after Keeping Rates on Hold

The Australian and New Zealand Dollars are edging higher early Tuesday after the Reserve Bank of Australia (RBA) voted to leave its benchmark interest rate at the historically low 0.1% level and maintain its bond buying levels. The move was in line with expectations although some economists argued policymakers could follow their U.S. counterpart in signaling an earlier winding down of stimulus.

At 05:20 GMT, the AUD/USD is trading .7079, up 0.0028 or +0.40% and the NZD/USD is at .6766, up 0.0011 or +0.17%. On Monday, the Invesco CurrencyShares Australian Dollar Trust (FXA) ETF settled at $69.94, up $0.41 or +0.59%.

Kiwi traders responded to the news positively, but the early strength suggests light short-covering rather than aggressive buying.

Today’s policy meeting was the last of the year. The next one is scheduled for February 2022. In coming to its decision, the RBA board noted the emergence of the Omicron variant, but was confident it would not derail what has been a rapid economic recovery, Reuters noted.

In November, the RBA surprised economists by dropping a commitment to keeping bond yields low, but it didn’t signal a shift toward an early end to its bond buying campaign unlike the Federal Reserve is expected to do at its December meeting.

Last week, Federal Reserve Chair Jerome Powell surprised investors by saying policymakers would discuss a quicker tapering of its asset buying, and thus an earlier hike in interest rates.

Although the RBA stuck with plans to reconsider its bond purchases in February when it will hold A$350 billion ($246.51 billion) of Australian government debt, most analysts assume the Board will halve its buying to A$2 billion ($1.41 billion) a week and cease by mid-year, though there was also a risk it could just stop altogether in February, Reuters reported.

In summary, the RBA was upbeat on the economic outlook as high vaccination rates allowed the lifting of coronavirus lockdowns.

“The Board is committed to maintaining highly supportive monetary conditions to achieve its objectives,” said RBA Governor Philip Lowe. “This is unlikely to take some time and the Board is prepared to be patient.

Short-Term Outlook

We could see a short-covering rally in the AUD/USD, but it is not likely to become a trend-changing event. The divergence in policy between the U.S. Federal Reserve and Reserve Bank of Australia still favors the U.S. Dollar over the Australian Dollar.

For example, the Fed is worried about rising inflation in the U.S. with Chairman Powell dropping the word “transitionary” last week in his testimony before Congress. On Tuesday, RBA Governor Philip Lowe said, “Inflation has increased but, in underlying terms, is still low at 2.1 percent.” Lowe further added, “The board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 percent target range.

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

USD/JPY Fundamental Weekly Forecast – Tight Labor Market, Rising Inflation Supportive; Omicron Wildcard

The Dollar/Yen closed lower last week as a tightening of the spread between U.S. Government bonds and Japanese Government bonds made the U.S. Dollar a less-attractive investment. U.S. Treasury yields were pressured by investor concerns around the omicron variant and the Federal Reserve’s plans to potentially taper faster than expected.

Last week, the USD/JPY settled at 112.837, down 0.506 or -0.45%. Invesco CurrencyShares Japanese Yen Trust (FXY) ETF finished the week at $83.29, up $0.22 or +0.26%.

U.S. Treasury yields were further pressured by a mixed U.S. Non-Farm Payrolls report that revealed a disappointing headline number. However, a drop in the unemployment rate signaled a tightening labor market, keeping the Fed on track for a faster tapering of stimulus.

Omicron Worries Increase Yen’s Safe-Haven Appeal

U.S. health officials last Wednesday confirmed the country’s first case of the new, heavily mutated COVID-19 Omicron variant in California. Bond yields had a muted reaction to the news, suggesting it may not be severe.

Investors will continue to watch for developments on the new omicron coronavirus variant, with uncertainty around its rate of transmissibility and fears that it could evade vaccines. However as of Friday’s close, the evidence doesn’t suggest Omicron is a game-changer in terms of implementation of new restrictions.

The USD/JPY could reverse to the upside this week if Omicron proves to be milder than the Delta variant.

Fed Policy Developments Setting the Tone

Although the U.S. Federal Reserve is not scheduled to meet until December 14-15, comments from Chairman Jerome Powell have already struck a chord with Dollar/Yen investors. Powell indicated in a testimony in front of Congress last Tuesday that the central bank may quicken the pace of its asset tapering schedule.

Powell said that he thought the Fed could pull back its bond-buying program faster than the $15 billion-a-month schedule announced in November.

“I think that the taper need not be a disruptive event in markets. I don’t expect that it will be. It hasn’t been so far. We’ve telegraphed it,” Powell said during Congressional testimony last Wednesday.

Weekly Outlook

This week, USD/JPY traders will be monitoring Omicron developments, stock market volatility and Friday’s U.S. Consumer Inflation (CPI) data.

Throughout the week, investors weighed the potential fallout from Omicron after the COVID-19 variant’s spread led to fresh lockdowns in Europe and fanned fears of a hit to global economic growth. However, over the weekend, South African officials said there are no signs that could prompt a panic as infections have been mild.

Omicron is a wildcard but U.S. health officials said Sunday that while the coronavirus variant is rapidly spreading throughout the country, early indications suggest it may be less dangerous than delta, which continues to drive a surge of hospitalizations.

The key report this week is Friday’s Consumer Inflation (CPI) and Core CPI reports. However, given that Powell and other Fed policymakers are leaning toward tighter policy, it really shouldn’t matter what the reading shows.

Similarly, last Friday’s U.S. Non-Farm Payrolls report offered mixed results with a headline miss and a lower unemployment rate. The disappointing jobs growth shouldn’t stop the Fed from moving forward with its plans to increase tapering because the drop in the unemployment rate to a 21-month low indicates a tight labor market.

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

AUD/USD Forex Technical Analysis – Trader Reaction to .7083 Sets the Tone; RBA on Tap

The Australian Dollar is trading flat shortly before the release of the Reserve Bank’s (RBA) interest rate and policy decisions at 03:30 GMT.

Traders are not expecting any surprises by the central bank with all 34 economists in the latest Reuters poll looking for the cash rate to remain at 0.10%. However, there is a small majority expecting a rate rise in the first quarter of 2023.

At 02:51 GMT, the AUD/USD is trading .7050, down 0.0001 or -0.02%. The Invesco CurrencyShares Australian Dollar Trust (FXA) ETF is trading $69.94, up $0.41 or +0.59%.

Despite new concerns over the Omicron coronavirus variant, a Reuters poll of economists are now calling for the RBA to raise rates in early 2023, and possibly sooner. The group brought forward their rate hike expectations for the second straight month.

Against a backdrop of rising inflation in Australia and around the world, the RBA is now predicted to lift its cash rate from a record low 0.10% in the first quarter of 2023.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the November 2, 2020 main bottom at .6991 will reaffirm the downtrend. This could trigger further weakness into the July 16, 2020 main bottom at .6963 and the July 14, 2020 main bottom at .6921.

A move through .7431 will change the main trend to up. This is unlikely, however, due to the prolonged move down in terms of price and time, the market is ripe for a counter-trend rally.

The minor trend is also down. A trade through .7173 will change the minor trend to up. This will shift momentum to the upside.

The minor range is .7173 to .6993. Its 50% level or pivot at .7083 is the first upside target. The second upside target is the pivot at .7182, followed by a short-term retracement zone at .7212 to .7264.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to .7046.

Bullish Scenario

A sustained move over .7046 will indicate the presence of buyers. The first upside target is the pivot at .7083.

Taking out .7083 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with .7173 – .7182 the next target.

Bearish Scenario

A sustained move under .7046 will signal the presence of sellers. If this creates enough downside momentum then look for a retest of last week’s low at .6993, followed by a series of main bottoms at .6991, .6963 and .6921.

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

AUD/USD and NZD/USD Fundamental Weekly Forecast – RBA Cash Rate to Remain at 0.10%; No Early Lift-Off Seen

Australian and New Zealand Dollars closed sharply lower last week, weighed down by hawkish comments from U.S. Federal Reserve Chair Jerome Powell and worries about renewed restrictions due to the new Omicron coronavirus variant.

Weaker-than-expected economic data from China also put a lid on prices as well as general uncertainty ahead of Tuesday’s monetary policy decisions by the Reserve Bank of Australia.

Last week, the AUD/USD settled at .7000, down 0.0121 or -1.70% and the NZD/USD finished at .6747, down 0.0074 or -1.08%. The Invesco CurrencyShares Australian Dollar Trust (FXA) ETF settled at $69.53, down $1.210 or -1.71%.

Powell Says Fed Will Discuss Faster Tapering at December Meeting

Federal Reserve Chairman Jerome Powell indicated last Tuesday that the central bank could step up the removal of its efforts to boost the economy as it battles escalating inflation pressures.

In an appearance before a Senate committee, the Fed chief said he thinks reducing the pace of monthly bond buys can move more quickly than the $15 billion-a-month schedule announced in early November.

Powell said he expects the issue to be discussed at the December meeting.

“At this point, the economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner,” he said. “I expect that we will discuss that at our upcoming meeting.”

The initial tapering schedule would have seen bond purchases wrap up around June; if the committee chooses to accelerate, that could mean a close earlier in the spring, giving the Fed leeway to raise interest rates anytime thereafter.

Omicron Risks Remain

Throughout the week, investors weighed the potential fallout from Omicron after the COVID-19 variant’s spread led to fresh lockdowns in Europe and fanned fears of a hit to global economic growth. However, over the weekend, South African officials said there are no signs that could prompt a panic as infections have been mild.

Weekly Outlook

The RBA is unlikely to spring any surprises at its December policy meeting based on recent comments from Governor Philip Lowe and due to the uncertainty caused by the Omicron variant. The RBA will release its latest policy decisions at 03:30 GMT.

All 34 economists in the latest Reuters poll expect the cash rate to remain at 0.10% on Tuesday, but a small majority now expects a rate rise in the first quarter of 2023.

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

Trade Of The Week: Gold Waits For Fundamental Catalyst

Gold commenced the week in a muted fashion as investors digested last Friday’s mixed US jobs report.

Bulls and bears were missing in action with prices stuck within a $10 range despite the cautious mood. While the Fed’s hawkish tilt, Omicron fears, dollar, and Treasury yields among other themes are likely to continue influencing gold, the precious metal could be waiting for a fresh fundamental spark. Taking a look at this week’s economic calendar, this catalyst may be the latest US inflation numbers released on Friday.

After concluding November -0.5% lower, things are looking slow for the precious metal thus far. Nevertheless, some action could be around the corner if prices break above or below the two-week range.

All eyes on the US inflation report

Inflation in the United States remains at elevated levels with consumer prices surging 6.2% in October, the highest in more than three decades. November’s consumer price index data is expected to show inflation surging to 6.7% thanks to persistent supply chain issues, higher energy costs, and strong consumer demand. Given Jerome Powell’s recent comment that the Fed could speed up bond tapering to counter inflation, the pending CPI report has the potential to rock markets.

Another jump in US consumer price inflation may fuel market expectations over the Federal Reserve raising interest rates more quickly than expected. But this is where things get tricky. If the Fed pulls the rate hike trigger prematurely, this may expose the US economy to downside risks. It will be interesting to see how the Fed tames inflation without sending the U.S economy into a recession, while also dealing with the Omicron threat. A hot US CPI report could rekindle appetite for safe-haven assets like gold if US recession fears resurface.

Traders are currently pricing in a 64% probability of at least one rate hike by early May 2022 and a 99% probability by mid-June next year.

Gold ETFs favour bears  

According to an automated report from Bloomberg, gold ETFs cut 196,935 troy ounces of gold from their holdings last Friday, marking the biggest one-day decrease since October 1st, 2021.

The sharp outflow could be the result of the mixed US jobs report doing little to alter hawkish Fed expectations. An ETF (Exchange Traded Funds) is an investment instrument that allows retail traders to gain exposure to an existing market or groups of markets. A gold ETF provides investors exposure to gold without owning it physically. Outflows from ETF’s are seen as bearish for the underlying asset. In this instance, ETF investors could be reducing their exposure to the zero-yielding metal amid the prospects of higher interest rates.

Keep an eye on the breakout

Gold prices have been trapped within a wide range on the daily charts with support at $1765 and resistance around $1810. A solid breakout and daily close above $1810 could encourage a move towards $1831, $1845, and $1870. Should $1765 prove to be unreliable support, a decline back towards $1750 and $1726, could be on the cards.

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Oil Price Fundamental Weekly Forecast – Omicron Coronavirus Variant: So Far, No News is Good News for Prices

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures closed sharply lower last week on worries about demand destruction from the omicron coronavirus variant. There was also residual selling from the previous week’s release of oil from the Strategic Petroleum Reserve (SPR) of several major consuming countries including the United States.

Last week, January WTI crude oil futures settled at $66.26, down $1.89 or -2.77% and February Brent crude oil futures finished at $69.88, down $1.71 or -2.45%. The United States Oil Fund (USO) ETF closed at $48.00, down $1.63 or -3.28%.

OPEC and its allies voted to continue to increase production by 400,000 barrels per day, which on paper looks bearish. However, they could’ve raised output by even more than that amount if they wanted to try to offset the oil released from the SPR.

Furthermore, OPEC+ said it would be willing to make changes to its production if demand were to drop dramatically due to an outbreak in Omicron. This is the statement that turned the market around last week.

OPEC+ Recap

WTI and Brent crude oil recovered from their weekly lows last week after OPEC+ surprised markets by sticking to its plans to boost output slowly.

Initially, the market sold off dramatically after OPEC and its allies issued a bit of a surprise by sticking to plans to boost output monthly by 400,000 barrels per day. It was the latest in a series of events that have caused crude to slump wildly, having lost 24% in the last three weeks.

Oil futures attempted to rebuild the rally by the end of the week, but the combination of uncertainty around the Omicron variant, efforts by governments to stem the tide of new infections and expectations for more supply kept traders on their toes.

OPEC+ decided on Thursday to boost supply in January in line with previous months. Since August, it has been gradually winding down record cuts agreed to in 2020.

The White House said it welcomed the decision, but added that the United States had no plans to reconsider its decision to release crude reserves.

OPEC+ has been adding 400,000 bpd to its target, but falling well short of that on a monthly basis due to underinvestment in several members’ oil industries.

Weekly Outlook

The market has settled down considerably since OPEC+ said it would be willing to make changes in production if demand falls because of the Omicron coronavirus variant. This shifts the focus back to the variant this week, which so far has not hurt demand too much.

Early indications of the severity of the Omicron COVID-19 variant are “a bit encouraging” but more information is still needed, according to leading U.S. pandemic adviser Dr. Anthony Fauci.

Reports from South Africa, where it emerged and is becoming the dominant strain, suggest hospitalization rates have not increased alarmingly.

“Though it’s too early to really make any definitive statements about it, thus far it does not look like there’s a great degree of severity to it,” Fauci said.

“Thus far, the signals are a bit encouraging. But we have really got to be careful before we make any determinations that it is less severe, or it really doesn’t cause any severe illness, comparable to Delta.

WTI and Brent crude oil could be supported this week if the impact of the new variant fails to bring as much demand destruction as the Delta variant. It may not be bullish enough to lead the markets to a new high, but it could help recover a large chunk of the month-long sell-off.

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

Silver Price Daily Forecast – Silver Moves Lower While Gold Stays Above $1775

Silver ETF Is Losing Ground At The Start Of The Week

Silver faced resistance near $22.60 and moved back below the support level at $22.30 while U.S. dollar was mostly flat against a broad basket of currencies. Meanwhile, iShares Silver Trust made an attempt to settle below $20.50.

The U.S. Dollar Index has recently made another attempt to settle above the resistance at 96.25 but lost momentum and pulled back. The nearest support level for the U.S. Dollar Index is located at 96. A move below 96 will push the U.S. Dollar Index towards the support at the 20 EMA at 95.75 which will be bullish for silver and gold price today.

Gold has recently managed to get above the $1775 level while SPDR Gold Trust is trying to stay above the $166 level. In case gold manages to settle above $1785, it will move towards the 50 EMA near $1800 which will be bullish for silver.

Gold/silver ratio continues its attempts to settle above the psychologically important resistance level at 80. A move above this level will push gold/silver ratio towards recent highs at 80.55 which will be bearish for silver.

Technical Analysis

silver december 6 2021

Silver is trading in the range between the support level at $22.10 and the resistance level at $22.60. Currently, it is trying to settle below $22.30. In case this attempt is successful, silver will move towards the low end of the current trading range at $22.10.

A move below $22.10 will open the way to the test of the next support at $21.90. In case silver gets below this level, it will head towards the support at $21.50.

On the upside, silver needs to settle above the resistance at $22.60 to have a chance to gain sustainable upside momentum. The next resistance level for silver is located at $22.90.

RSI is close to the oversold territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge. If silver manages to settle above the resistance at $22.90, it will head towards the next resistance level at $23.20.

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

EUR/USD Mid-Session Technical Analysis for December 6, 2021

The Euro is edging lower on Monday as a rebound in risk sentiment boosted demand for the U.S. Dollar. Weaker than expected data out of Germany is weighing on prices while investors continue to monitor the omicron COVID-19 variant and the Federal Reserve’s potential policy tightening. A rise in U.S. Treasury yields is also helping to make the dollar a more attractive asset.

At 13:41 GMT, the EUR/USD is trading 1.1296, down 0.0014 or -0.12%. On Friday, the Invesco CurrencyShares Euro Trust (FXE) ETF settled at 105.20.

In economic news, weaker demand from abroad drove a much bigger than expected drop in German industrial orders, including cars, in October, data showed on Monday, further clouding the growth outlook for manufacturers in Europe’s largest economy.

Orders for goods ‘Made in Germany’ dropped 6.9% on the month in seasonally adjusted terms after a revised rise of 1.8% in September and a plunge of 8.8% in August, figures from the Federal Statistics Office showed. A Reuters poll of analysts had pointed to a smaller decline of 0.5% on the month in October.

Market expectations have grown for the Fed to zero in on combating inflation, following increasingly hawkish comments from policymakers.

Meanwhile the omicron variant has now been detected in almost one third of U.S. states, health officials said on Sunday, although the delta variant remains the dominant strain behind rising caseloads nationwide.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 1.1186 will signal a resumption of the downtrend. A move through 1.1608 will change the main trend to up.

The minor trend is up. This is controlling the momentum. A move through 1.1383 will indicate the counter-trend buying is getting stronger.

The EUR/USD is currently straddling a long-term Fibonacci level at 1.1291.

On the upside, the nearest resistance targets are 1.1397 and 1.1439.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD is likely to be determined by trader reaction to 1.1291.

Bullish Scenario

A sustained move over 1.1291 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for a near-term move into 1.1283 to 1.1397.

Bearish Scenario

A sustained move under 1.1291 will signal the presence of sellers. The first two downside targets are 1.1185 and 1.1261. The latter is a potential trigger point for an acceleration into the main bottom at 1.1186, followed by the June 19, 2020 main bottom at 1.1168.

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