Monthly Outlook for December – Webinar Dec 07

This interactive presentation reveals potential trading opportunities during the aftermath of the US elections and upcoming Brexit deadline negotiations, and reveals what could be in store for the USD, the Pound and the S&P 500. A live Q&A session will follow, providing you with the perfect opportunity to get your most pressing questions answered by our experts! Don’t miss out on the chance to learn more about what’s moving the markets this December! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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Lukman Otunuga is a research analyst at FXTM. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in the various factors affecting the currency markets. . Read Lukman’s full profile.

Tan Chung Han (Han Tan) joined FXTM in January 2019 as a Market Analyst. A highly experienced financial journalist and news presenter with an in-depth understanding of the Southeast Asia and Asia-Pacific regions, Han will be providing valuable insights into local and international market news, as well as macroeconomic trends. Han will also act as the face of the company for these regions by providing market commentary, thereby solidifying FXTM’s reputation as a leading authority on world currency trends. Read Han’s full profile.

Multi Time Frame Trading Strategy Demonstrated – Webinar Dec 09

This presentation is intended for both new and experienced traders that are interested in seeing this method demonstrated live in action. Theunis will provide practical demonstrations on MetaTrader 4 using a variety of time frames, as well as introduce vital risk management techniques. Attendees will be able to ask questions and participate actively during the course of the webinar. Don’t miss out on the chance to learn from one of our experts from the comfort of your own home! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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FXTM Trading Educator Theunis Kruger has always been fascinated by economics, with a particular interest in ‘wave’ formations and how they can be used to forecast and analyse trends in the financial markets. With a decade of solid trading experience to his name, Theunis now enjoys sharing his knowledge with others.

Lukman’s Week Ahead: Market themes to watch out for – Webinar Dec 14

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders. Enjoy an expert look at: • The key themes driving the financial markets • Technical and fundamental trading ideas on the MT4 platform • How to use the latest FXTM trading signals • Using fundamental analysis to increase your profit potential • What to monitor over the coming week

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FXTM Senior Research Analyst Lukman Otunuga holds a BSc degree in Economics from the University of Essex and an MSc in Finance from London School of Business and Finance. A keen follower of macroeconomic events with a strong professional background in finance, Lukman is well versed in the markets. Read his full profile here.

OPEC+ Facing Hard Choices

Brent and WTI January contracts rallied more than 7% last week and have risen by more than a quarter in November.

The rally has been driven primarily by Covid-19 vaccine news in which three giant pharmaceutical companies are likely to deliver the cure to the current pandemic. Steady increase in oil demand from Asia, a weaker US dollar and easing political uncertainty in the US as President-elect Joe Biden began his transition process have also helped boost sentiment. However, it’s now in the hands of OPEC+ to determine whether oil prices remain close to $50 or they get dragged lower towards the low $40s.

Back in April, the coalition agreed to cut production by 9.7 million barrels per day and have scaled it back further to 7.7 million bpd since August. The original plan was to then bring back another 2 million bpd in January 2021, but markets seem convinced that this step will be delayed. The question remains for how long?

While fuel demand in Asia has returned close to pre-pandemic levels, we are still far away in Europe and the Americas. That would make it a challenging choice on whether to delay or bring back more oil to the market. At this point, OPEC+ members won’t just be trying to balance supply and demand, but also bring back global inventory levels to their long-term averages. Given the increase in Libyan production, inventories are set to rise again if the group sticks to their previous plan.

Oil bulls would like to see an extension of the current reduction of 7.7 million bpd for another 6 months. However, this could come at a cost of losing market share to the US shale oil producers. American rig counts have been steadily increasing since mid-September and the further prices go higher the more rig counts are likely to be added. In the week ending 25 November, rig counts stood at 320, up from 244 in mid-September. That is the challenging situation OPEC+ will have to deal with.

Other than rising prices, last week saw an additional positive development in which January Brent futures traded at a premium to those of February, in what’s called ‘backwardation’. This situation usually denotes tighter conditions and is seen as a positive signal. However, it lasted only for four days before returning to ‘contango’, so we cannot read much into this unless the curve flips for a longer time period.

Making things even more complicated for OPEC+ is that the recovery pace in road fuel demand versus jet fuel demand remains sluggish. The coalition cannot target a specific grade or product but only crude in general.

It’s clear that OPEC+ has more work to do and markets need to be convinced the coalition will successfully manage production in which global inventories continue to shrink. Our base case scenario is to see an extension of the current production cut for three months, which may then be extended for another three. This could keep prices around the high $40’s for December and possibly mid $50’s in the first quarter of next year. Any surprises or cracks in the alliance would deliver a negative shock.

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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.

Vaccine Rally Cools as Markets Look to Economic Data

US equities reached new highs on Tuesday with the Dow Jones Industrial Average breaching 30,000 for the first time, having added 12.7% month-to-date. The UK’s FTSE 100 performed even better with gains of 14.6% as many of its components benefit from a global recovery. Meanwhile, in Japan the Nikkei index hit a fresh 29-year high.

The global rally seems to have paused for now, following a modest decline of 173 points in the Dow Jones Industrial Average and 0.16% retreat in the S&P 500. The fall was driven by the sectors which have benefited the most from the vaccine news, such as Energy, Basic Materials, Industrials and Financials. However, the Nasdaq Composite ended Wednesday up 0.47% as investors flocked back to the big Tech names.

Markets seem to be repeating the cycle of the past two weeks. Vaccine news gets released on a Monday and pushes cyclical stocks sharply higher, while growth stocks get dumped. We then see a reversal in positioning in the latter part of the week. While the release of vaccine results is promising, we do not know yet when this pandemic will be completely over and that is what investors will continue to struggle with. Wednesday’s economic data showed that US jobless claims increased for a second consecutive week suggesting more pain ahead as business restrictions and partial lockdowns continue to hurt employment. Consumer spending remains a bright spot having increased 0.5% in October, but given the 0.7% decline in personal income, there is a high chance that these numbers soften in the final two months of the year.

Minutes from the FOMC’s most recent meeting earlier this month indicated that monetary policy is likely to remain accommodative and officials will provide further guidance on bond buying. The central bank is not expected to take any steps to upset the market, and it’s evident that we’ll continue to live with a low rate environment for a couple of years. However, the economy is now in need of a fiscal boost and not a monetary one. The faster the US government acts, the more jobs it will preserve and the faster activity can return to pre-Covid era levels. Time seems to be running short to pass a bill before year-end, but that is increasingly necessary in order to prevent further shocks to the economy and hence markets.

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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.

Key Levels Beckon for Dollar Index, Gold, Pound

Still, major currencies are about to test key levels in the immediate future, and it remains to be seen whether we will get meaningful breakouts or rejections.

Having broken below the psychologically-important 92.0 level, the Dollar index (DXY) is just some 20 basis points away from registering a new two-year low, as it eyes the September trough of 91.74. After falling by over 10 percent from its March peak through end-August, the DXY has been moving sideways over the past three months, potentially setting up a meeting between its 100-day simple moving average (SMA) with its 50-SMA once more. The Greenback has weakened against all of its G10 peers, except for the Japanese Yen, so far this week.

Investors had refused to allow the Greenback to capitulate even after the US elections, given persistent fears over the economic realities incurred by Covid-19, which had kept this safe haven currency buoyant above the 92.0 mark. The Dollar index has also been receiving support from 10-year US Treasury yields which have been ticking upwards in recent months, even though real yields remain mired in negative territory. Still, the overall bearish outlook for the US Dollar remains intact, given expectations for more incoming US stimulus and a central bank that is more tolerant of an inflation overshoot.

In short, a sustained break below 91.74 could herald another leg down for the Dollar index, with the 91.0 level beckoning next. A sustained decline could see the Dollar index dipping into the 88-90 range, as it last did in 2018.

Gold could test 200-SMA support

The weakening US Dollar has only provided fleeting relief for Gold prices, as the precious metal has been dealt a massive blow by the positive developments surrounding a Covid-19 vaccine. The ensuing risk-on sentiment has seen Gold prices tumble towards its 200-day simple moving average.

The last time it ventured below this technical level proved to be a brief affair back in March, with Bullion then going on to post a new all-time high in August. However, a lot has happened in the months since the major market dislocations seen in March, when the pandemic first swept through major economies. Gold bulls must continue to hope that the reflation trade remains intact to help Gold point north once more.

Pound takes advantage of Dollar weakness

Should the Dollar climb another leg lower, that could see GBPUSD testing the 1.35 resistance level, which has been relatively resilient since the Brexit referendum was held in June 2016. The British Pound is strengthening against most other G10 currencies today, despite Chancellor of the Exchequer Rishi Sunak warning that the UK faces an “economic emergency”, with the government forecasting the UK’s deepest recession since 1709.

As long as markets are not dissuaded that a post-Brexit trade deal will be secured with the EU before the year-end deadline, then the Pound could well chart its course towards that key 1.35 level, with a positive confirmation of a UK-EU trade deal potentially serving as a trigger for a breach. If markets were to be blindsided by a hard Brexit, that could see GBPUSD crashing down into sub-1.20 levels.

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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.

Technical Outlook: Gold Tumbles to 4-Month Low

The primary culprits behind Gold’s sharp decline revolved around the better-than-expected U.S business activity data and rising optimism over the progress in a Covid-19 vaccine. Appetite towards the safe-haven asset took another hit amid the triggering of a formal transition process to President-elect Joe Biden. With Biden set to nominate former Federal Reserve Chair Janet Yellen to become the next Treasury secretary, this may boost the prospects for further fiscal and monetary stimulus given her reputation as a dove. Such a move has been welcomed by investors, further pressuring Gold which has weakened over 2% since the start of the week.

Now that Gold bears have awoken from hibernation and broken below the $1850 support level, the path of least resistance for the precious metal points south. Given how the MACD trades to the downside and the death cross technical formation – (where the 50-day simple moving average crosses below the 100-day simple moving average) is in play, bears are currently in the driving seat. Sustained weakness below the $1850 support may open the doors towards $1815 level and the psychological $1800 level above the 200-day simple moving average.

Zooming out to the weekly timeframe, a solid close below the $1850 could signal the start of a bearish trend. Prices are already trading below the 20 SMA while the MACD is displaying early signs of crossing to the downside. Should bears keep prices below $1850 this week, previous support could transform into a dynamic resistance that encourages a decline towards $1800 and $1760.

For those who are focusing on the shorter timeframes, there are some interesting developments on the hourly charts. An intraday rebound towards the $1840 level could be on the cards. Should this level prove to be reliable resistance, prices may decline back towards the $1820 level. If the risk-on mood further dampens appetite for the safe-haven asset, prices may break below $1820 with the psychological $1800 a key point of interest.

Back to the fundamentals

While the positive vaccine news is set to impact Gold in the near term, the medium to longer term outlook may be influenced by lower interest rates and possible rise in inflation. Given how the Federal Reserve is expected to leave interest rates unchanged until at least 2023, the central bank could expand its QE program to support the US economy. Such may weaken the Dollar – essentially providing support to Gold.

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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.

Euro Set for Eventful Week

EURUSD is now testing the top-end of its recent range, with momentum still pointing north. The FXTM Trader’s Sentiment is also net long on the currency pair.

Euro PMIs may show further signs of economic gloom

The Euro is set to react to the latest assessments as to how the EU economy is holding up under the strain of Covid-19’s resurgence across the continent, and Monday will see the release of its November PMIs.

Although the manufacturing sector is expected to remain in expansionary territory for a fifth consecutive month, perhaps more concerning is the services sector, where conditions improved in July and August only to have deteriorated since. The tightening virus curbs across the continent this quarter are stoking fears of a double-dip recession, and worse-than-expected PMI readings today could prompt the Euro to pull further below the 1.189 level against the Greenback.

Brussels battles internal and external political feuds

Even when faced with such dire economic prospects, the EU’s US$2 trillion economic recovery package is being held up by objections from Hungary and Poland. This economic relief package was due to have been rolled out in January, but will now be delayed. At least in this regard, the EU finds itself in the same boat as the US, which is also contending with delays to a fresh round of fiscal stimulus. Such dynamics in turn is keeping EURUSD mostly within the 1.16 – 1.19 range since September.

Besides finding itself engaged in political brinksmanship with fellow EU members, Brussels also is also in a deadlock with the UK in its negotiations over a post-Brexit trade deal. News reports over the weekend suggest that an agreement could be announced by early December, prompting EURGBP to pull further below its 200-day simple moving average today.

Should investors be greeted with more signs of a deadlock rather than a major breakthrough over the coming days, that risks unwinding losses in EURGBP, with the currency pair potentially trading back above the psychologically-important 0.90 level, as markets then brace for a hard Brexit come January 1st. After all, the UK is expected to bear the bigger brunt than the EU in the event of a no-deal Brexit.

However, as things stand, the FXTM Trader’s Sentiment is still net short on EURGBP, as traders continue to expect a post-Brexit trade deal being secured at the 11th hour.

Incoming monetary policy support may buffer Euro

Then on Thursday, November 26th, the ECB is set to release the minutes from its October monetary policy meeting, which will be scoured for clues as to when and how the central bank could inject further monetary stimulus. More overt signs of incoming central bank support, likely to be officially announced at the December ECB meeting, could help shore up the Euro’s performance in the interim.

The bloc’s currency has strengthened by more than one percent against the Japanese Yen, Swiss Franc, and the US Dollar so far this month, while also holding year-to-date gains against most of its G10 peers.

Investors will have plenty to digest this week

And with the Euro accounting for 57.6 percent of the Dollar index (DXY), it could well dictate the DXY’s performance this Thanksgiving week. The US will have plenty on its plate besides turkey and stuffing this week, as Thanksgiving’s Eve (Wednesday) will feature the release of the FOMC meeting minutes as well as a US data dump, which includes the second reading of the US Q3 GDP, weekly jobless claims, and October’s personal spending data.

In short, there’s plenty to keep global FX markets on their toes in this final full week of November.

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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.

Mid-Week Technical Outlook: GBPUSD Recovery Extends Beyond 1.3250

Buying sentiment towards Sterling received a solid boost on Tuesday following reports that the U.K and European Union could find a middle ground on future trading and security relationship as early as next week. Earlier today we covered the fundamentals behind such a key development, now our focus turns to the technicals and potential trading setups on the GBPUSD and other Pound crosses.

GBPUSD eyes 1.3300

The GBPUSD is bullish on the daily timeframe. There have been consistently higher highs and higher lows while the MACD trades to the upside. Pound bulls are eyeing the 1.3300 resistance level. A breakout above this point could open the path towards 1.3400.

On the weekly charts, bulls remain in control above the 1.3100 higher low. A solid weekly close above 1.3300 may trigger a move towards 1.3482.

It has been more than two years since the GBPUSD traded above the 1.3500 level. The upside momentum may notch up a gear if 1.3500 is conquered on the monthly timeframe. A solid close above this point may trigger a move towards levels not seen since April 2018 above 1.4300.

EURGBP pressured below 0.9000

An appreciating Pound is likely to keep the EURGBP below the 0.9000 resistance level. An intraday breakdown below 0.8950 could signal a decline towards 0.8900 and 0.8870. This bearish setup becomes invalidated if prices rebound above the 0.9000 lower high.

GBPJPY balances above 137.90

The title says it all. Prices remain trapped around the 137.90 regions. However, lagging indicators such as the MACD and 20 simple moving average pointing to further upside. Should 137.90 become the new higher low, the GBPJPY could rebound towards 139.00 and beyond. Alternatively, weakness under 137.90 is likely to trigger a selloff towards 136.50.

GBPAUD playing the range

The pound remains in a wide range against the Australian Dollar with support at 1.8000 and resistance at 1.8400. An intraday breakout above 1.8250 could trigger an incline towards 1.8400. If 1.8250 proves to be reliable resistance, prices have scope to decline back towards 1.8000.

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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.

Dollar Licks Wounds Ahead of US Retail Sales

Growing concerns over the transfer of power to President-elect Joe Biden and surging coronavirus cases in not only Europe but the United States compounded to the growing caution – offering the Dollar Index (DXY) some additional support.

One can’t help but feel that the Greenback may be waiting for a fresh directional catalyst to make its next big move up or down. The DXY has been trading with the same range on the daily timeframe since July 2020!

Before we sink our teeth into the technicals, there are a couple of fundamental themes that will most likely influence the Dollar’s valuation for the rest of 2020.

s the race for a coronavirus vaccine builds momentum, markets are becoming increasingly optimistic over a sense of normality returning across the globe. Should a COVID-19 vaccine become widely distributed and revive not only global trade but economic growth, the Dollar could tumble amid the risk-on mood. However, it is far too early for any celebrations.

On the data front, the US retail sales data will be published this afternoon with investors looking for fresh clues on whether the Federal Reserve will make a move in December. In October, retail sales are forecast to rise by 0.5% on a monthly basis, compared to the 1.9% witnessed in September. Over the past few months, US retail sales have been quite volatile thanks to the coronavirus menace. However, a disappointing figure will most likely weigh on sentiment and boost expectations over the Fed taking action sooner than later.

It must be kept in mind that US infections are sky rocketing while Congress remains entangled in an ongoing stalemate over a fresh round of US stimulus. Despite the bright spots of economic data, the United States is certainly not out of the woods yet. Given how the Fed is expected to leave interest rates unchanged until at least 2023, the central bank my simply buy more bonds through its QE program.

Back to the technicals

Believe its or not, the Dollar Index (DXY) still remains in a wide range on the monthly timeframe with support at 91.80 and resistance at 94.80. The last time prices traded outside these regions was back in June 2020. If bulls are able to conquer the 94.80 resistance level, the Dollar Index could challenge 98.00 and beyond. However, a breakdown below 91.80 is seen opening the doors back towards 88.80.

Nothing new here on the weekly timeframe. Prices are respecting a bearish channel; however strong support can be found around 92.00. Lagging indicators such as the 20 Simple Moving Average and MACD point to the downside. However, a daily close above 94.00 may trigger a move towards 94.80 and 95.00.

On the daily charts, the Dollar Index is trading below 92.70 as of writing. Sustained weakness below this level may open the doors back towards 92.00 and 91.80. If bulls regain enough confidence to push back above 92.70, prices may venture towards 93.30 and 94.00, respectively.

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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.

Tesla to Join S&P 500 Club in December

This is a major achievement for the 17-year-old electric vehicle maker, though it had been roundly expected for a while now. Still, the jubilation over the news sent the stock surging by as much as 15 percent in after-hours trading.

September began in torrid fashion, with Tesla’s shares plummeting by well over 30 percent between August 31st and September 8th amid the broader selloff in US equities. Tesla’s 21 percent drop on September 8th alone was the stock’s largest single-day decline in its history, coming right after news that S&P Dow Jones indices had snubbed the automaker in its last quarterly review.

Despite bouncing off the $330 level and climbing about 23.58 percent since that September 8th low, the stock still found itself being squeezed into a narrowing sideways range. A divided US government is likely to prevent President-elect Joe Biden from pushing ahead with his green agenda, and such curtailed policy-making prospects had been weighing on the EV-maker’s shares. Lately, the stock also had to contend with the ongoing rotation away from tech darlings and into sectors that are more sensitive to the real economy, especially sectors that have been hard hit by Covid-19.

But all that could change with this latest milestone.

Tesla is going to be the biggest-ever addition to the blue-chip index, so much so that S&P Dow Jones indices may have to do it over two separate occasions, as opposed to adding the entirety of Tesla onto the S&P 500 all in one go. After all, the company’s market value has increased by 387.76 percent so far in 2020, and is set to grow even larger when US markets open later today.

From a valuations perspective however, Tesla’s cult-like status is getting way ahead of itself. With a PE ratio of 646.6, Tesla is much more expensive that Amazon, which has a PE ratio of 91.69. For further context, the likes of Apple, Alphabet, and Facebook all have PE ratios that are closer to the Nasdaq 100 index’s PE ratio of 37.43.

Still, there could be plenty more upside from an earnings perspective, keeping in mind that Tesla has just registered its fifth consecutive quarterly profit. Electric cars made up less than three percent of total US auto sales in 2019, hence the company’s decision to build a second US factory in Texas. Tesla also opened a new factory in China earlier this year, with another being built in Germany.

The added production capacity is being cheered on by Tesla bulls, and its inclusion into the S&P 500 may only amplify demand for the stock. That’s likely to be the case for passive funds, who may have to sell between an estimated US$30 billion to US$40 billion worth of other stocks to make way for the Tesla behemoth, given these passive funds’ mandate to mirror the S&P 500.

Inclusion into the S&P 500 can offer additional support for recently-included shares. Etsy, Catalent, and Teradyne have experienced this first-hand, judging by their ability to outperform the broader S&P 500 since the previous quarterly review was announced.

Since US markets closed on September 4th:

  • Etsy: +12.12%
  • Catalent: +25.5%
  • Teradyne: +36.36%
  • S&P 500: +5.83%
  • Tesla: -2.45%

Tesla has not been able to close above the $500 psychologically-important level in split-adjusted terms following its 5-for-1 stock split on August 31st. Perhaps inclusion into the S&P 500 may just be the catalyst for yet another crowning achievement. Either way, this development surrounding Tesla could have repercussions well beyond the stock itself, and could send waves across the broader US stock market.

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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.

The Builder Strategy Applied – Webinar Nov 18

This presentation, designed for both new and intermediate traders alike, explores the Builder Strategy and reveals how it can be used to potentially benefit your trading. Theunis will offer practical demonstrations on MetaTrader 4 and explain the dangers of both over-analysing and over-trading. Don’t miss out on the chance to learn from one of our experts from the comfort of your own home! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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FXTM Trading Educator Theunis Kruger has always been fascinated by economics, with a particular interest in ‘wave’ formations and how they can be used to forecast and analyse trends in the financial markets. With a decade of solid trading experience to his name, Theunis now enjoys sharing his knowledge with others.

Applied Economics, Everyone is Trading – Webinar Nov 23

This presentation explores the fundamentals of economics and how to understand these concepts to help create an investment portfolio. Attendees will learn to use to price charts to unlock potential trading opportunities, and gain an understanding of the four major asset classes. Theunis will also offer practical demonstrations and answer your most pressing industry questions. Don’t miss out on the chance to learn from one of our experts from the comfort of your own home! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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FXTM Trading Educator Theunis Kruger has always been fascinated by economics, with a particular interest in ‘wave’ formations and how they can be used to forecast and analyse trends in the financial markets. With a decade of solid trading experience to his name, Theunis now enjoys sharing his knowledge with others.

The Builder Strategy Introduction – Webinar Nov 11

This presentation introduces the Builder Strategy as a trading concept, and reveals how it may impact your trading. Attendees will learn to identify the early stages of a new trend, as well as how to utilise risk management techniques in conjunction with this strategy. Theunis will provide practical examples and demonstrations, as well as answer your most pressing industry questions. Don’t miss out on the chance to learn from one of our experts from the comfort of your own home! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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FXTM Trading Educator Theunis Kruger has always been fascinated by economics, with a particular interest in ‘wave’ formations and how they can be used to forecast and analyse trends in the financial markets. With a decade of solid trading experience to his name, Theunis now enjoys sharing his knowledge with others.

Mid-Week Technical Outlook: Time for a Dollar Rebound?

After an explosion of vaccine optimism propelled global stocks to record highs earlier in the week, questions were later raised over how the drug will be produced and delivered which essentially dragged investors back to reality. Persistent concerns around the U.S fiscal stimulus and possible delay in the transition of power to President-elect Joe Biden dampened the market mood while surging coronavirus cases in Europe and the United States rubbed salt into the wound. With uncertainty still the name of the game and the core themes weighing on global sentiment firmly intact, king Dollar could make a comeback.

Talking technicals, the Dollar Index (DXY) remains in a wide range on the monthly timeframe with support at 92.00 and resistance at 95.00. The last time prices traded outside these regions was back in June 2020. Over the past few weeks, it has felt like the Dollar has been waiting for a fresh directional catalyst to breakout of the current range. If bulls are able to conquer the 95.00 resistance level, the Dollar Index could challenge 98.00 and beyond. However, a breakdown below 92.00 is seen opening the doors back towards 90.00.

It is the same story on the weekly timeframe. Prices are respecting a bearish channel; however strong support can be found around 92.00. Lagging indicators such as the 20 Simple Moving Average and MACD point to the downside. However, a daily close above 94.00 may trigger a move towards 94.80 and 95.00.

Before we knuckle down on the daily time, it must be kept in mind that there a wide selection of fundamentals themes influencing the Dollar. On Thursday, all eyes will be on the latest US inflation and jobless claims data which should provide fresh insight into the health of the largest economy in the world. Tomorrow’s U.S. inflation numbers expect to see a 0.1% increase to 1.8% in the core number, which excludes food and fuel while CPI is expected to dip to 1.3% this from 1.4%.

Focusing back on the technicals, the Dollar Index is trading above 92.70 as of writing. A solid close above the 93.40 level could pave a way towards 94.00 and 94.65. If 92.70 proves to be unreliable support, the DXY may slip back towards the 92.00 support.

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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.

Resistance and Support, Define the Playing Field – Webinar Nov 10

This presentation introduces support and resistance levels, and reveals how they may impact your trading. Attendees will explore both the advantages and disadvantages of using these levels, and discover how they can be used to identify potential trading opportunities. Theunis will provide practical examples and demonstrations on live price charts, as well as answer your most pressing industry questions. Don’t miss out on the chance to learn from one of our experts from the comfort of your own home! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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Markets Celebrate The Return of Normalcy

Global equities are celebrating the outcome with the MSCI All-Country Index heading towards a new record and the S&P 500 futures rising 1.7% following a 7.32% rally last week.

While the control of the US Senate is still to be determined, markets are reacting as if Republicans will continue to hold this part of Congress. If this is true, taxes are likely to remain at current low levels and interest rates will stay near zero for a long time. That is the best environment for growth stocks, particularly the tech sector. Hence, they are continuing to outperform the broader market.

With expectations of a massive stimulus package lowered and the Fed now the ‘only player in town’, US bond yields will continue to come under pressure. The Dollar won’t benefit from widening yield spreads and that has dragged the DXY to its lowest levels since early September. Significant moves have also been seen against the Yuan. The Chinese currency is trading at its highest level since June 2018. The narrative now is that Biden will take a softer approach against China, or at least a more predictable one.

A combination of fewer trade tensions and low US interest rates is encouraging inflows into high beta currencies. The Australian Dollar is hovering around 0.73, while the New Zealand Dollar reached 19-month highs.

Assuming no big surprises interrupt the market’s celebration, this trend is likely to continue until year end and possibly beyond. When the party is over, investors will realise that corporate valuations are extremely high and we’re still dealing with a health crisis.

Sky high valuations can still be justified in the short run given that very few investment alternatives are available. Stocks are still cheaper than bonds from a pure valuation perspective. But it is the health crisis that will determine the trajectory for assets in 2021 and how fast the global economy will recover going forward. Gold could possibly be a good hedge against those unknown factors and I wouldn’t be surprised to see the precious metal trading above $2,000 by year-end.

Given where we stand now, it seems highly unlikely that we will see asset returns anything near the Trump or Obama era over the next four years, whatever Biden does. Assets are priced for perfection and it requires positive surprises to keep the momentum going.

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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.

Accessing FXTM Trading Signals – Webinar Nov 03

This presentation introduces FXTM trading signals and reveals how they could potentially benefit your trading. Attendees will explore the various ways that these signals can be used as an indicator for possible higher time frame momentum, as well as in conjunction with other trading methods and strategies. Theunis will provide practical examples and demonstrations, as well as answer your most pressing industry questions. Don’t miss out on the chance to learn from one of our experts from the comfort of your own home! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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Biden Victory, Divided Government

The odds for a Trump second term have narrowed as Joe Biden won Wisconsin and Michigan overnight, two key swing states which puts him within six electoral votes of the Oval Office.

All the major US stock markets closed firmly in positive territory with the tech-heavy Nasdaq leading the way, after gaining as much as 3.5% and futures continuing to point up. Asian markets are similarly upbeat with the Nikkei climbing 1.3% and taking the benchmark above 24,000 for the first time since January.

Investors have returned to the top performing parts of the market – namely the Tech megacaps – as the prospect of lower stimulus spending and US growth draws ever closer. Results out of Nevada later today could prove the tipping point for the election result, with the state due to report by noon time in New York.

As we said yesterday, the reflation trade – a big Democratic win driving a bumper stimulus package to fuel growth, and potentially inflation – is being unwound with bond selling driving yields aggressively lower.

The US 10-year yield has dropped over 20 basis points over the last 24 hours, a huge move, as markets look towards a Biden victory but divided Congress. There will be no tax hikes, no infrastructure spending and no green energy spending as the Democrat’s domestic policy becomes a lame duck.

Dollar sinking, FOMC tonight

King Dollar sits at the bottom of the major currency pile this week with traders re-pricing a Biden presidency and pushing EUR/USD to 1.1740. Markets will focus on the Fed meeting later today and its assessment on the economy, given the new corona wave and for any guidance on future action, especially with regard to bond buying.

EUR/USD whipsawed around yesterday but any dollar gains were soon blocked, and the pair returned within its established range. The 1.1612 level proved to be strong support and the 50-day Moving Average looms above around 1.1775 as first resistance, coinciding with yesterday’s high.

Bank of England boosts GBP

Lest we forget, it’s Super Thursday and this morning’s BoE surprised some in the market by launching more stimulus than expected, in an effort to boost consumer spending. The MPC voted to buy another £150 billion of government bonds pushing the total to £895 billion, while it left rates unchanged at 0.1% and said it did not consider voting to impose negative rates. The Bank forecast a double-dip recession for the UK following the second lockdown being imposed today.

There are still ‘serious gaps’ between the two sides in Brexit talks according to the EU’s Barnier, as a lack of progress pushed EUR/GBP earlier in the session back into the recent range. The 50-day Moving Average has capped gains above 0.9068, with today’s central bank action pushing prices back to the lower part of that range. Brexit talks are set to resume next week as the mid-November ‘final’ deadline approaches – watch for the headlines!

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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.

US Elections: Bye Bye ‘Blue Wave’?

Expectations for a landslide win for Democrats, as had been priced into US equities in the first two trading days of the week, and indeed over recent weeks barring the selloff in late October, have not been vindicated. With both President Trump and former vice-president Joe Biden racking up easy wins early on election night, the jury is still out at the time of writing for key battleground states such as North Carolina, Georgia, Pennsylvania, Wisconsin, and Michigan.

Judging by the initial market reaction, investors seem to be expecting the status quo be maintained, not just in the makeup of the US government, but also in stock markets. The US Senate could still be a deeply divided chamber, which could slow any passage of fresh US fiscal stimulus. Such prospects are prompting equities to fall back on a stalwart to push benchmark indices higher. Nasdaq 100 futures hit limit up, briefly halting trading, before paring gains. The Nasdaq 100 Minis are surpassing gains in the futures contracts for either the Dow Jones or the S&P 500.

The smattering of data in hand isn’t stopping some segments of the markets from trying to pre-empt the final result. The Dollar index’s initial attempt to reclaim the psychologically-important 94.0 handle was also indicative of the dampened expectations that the US Senate will adopt an obvious blue hue. The Greenback is advancing against all of its G10 peers, and its gains are in turn suppressing Gold prices.

To be clear, these moves in the DXY and Nasdaq 100 futures are not enough to break out of recent trends. This presidential race could still throw up a host of outcomes. Biden could still be declared the eventual winner. It’s also entirely possible that President Trump could still get a second term, and avoid becoming the first one-term US President since George H.W. Bush in 1992. Such odds set up a potentially blockbuster finale to the US elections, with these slower-counting states set to have a big say on who will hold the POTUS title over the next four years. And whoever wins the upcoming presidential elections will have a major say on how various asset classes perform over the next four years.

Until we reach a conclusive end the 2020 US presidential election, investors must continue braving this fog of political uncertainty. If there are growing signs pointing to a contested outcome, riskier assets may struggle to hang on to recent gains, to the benefit of safe haven assets.

But for now, the wait continues.

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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.