EUR/USD Mid-Session Update for October 16, 2019

The Euro is trading higher against the U.S. Dollar on Wednesday after U.S. retail sales fell for the first time in seven months in September, increasing the chances of a Fed rate cut at its policy meeting on October 29-30.

According to the Commerce Department, retail sales dropped 0.3% last month as households slashed spending on building materials, online purchases and especially automobiles. The decline was the first since February.

Data for August was revised up to show retail sales gaining 0.6% instead of 0.4% as previously reported. Economists polled by Reuters had forecast retail sales would climb 0.3% in September. Compared to September last year, retail sales increased by 4.1%.

After the release of the disappointing report, the chances of a Fed rate cut jumped from 78.4% to 88.2%, according to the CME FedWatch Tool.

Lower rates tend to make the U.S. Dollar a less-attractive investment.

At 14:20 GMT, the EUR/USD is trading 1.1048, up 0.0015 or +0.14%.

EURUSD
Daily EUR/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. The main trend will change to up on a trade through 1.1110. A move through 1.0879 will signal a resumption of the downtrend.

The minor trend is up. This move confirms the upside momentum. A trade through the minor top at 1.1063 will indicate the buying is getting stronger. The minor trend changes to down on a move through 1.0991.

The main range is 1.1164 to 1.0879. Its retracement zone at 1.1021 to 1.1055 is currently being tested. Trader reaction to this zone will determine the near-term direction of the EUR/USD.

The short-term range is 1.0879 to 1.1063. Its retracement zone at 1.0971 to 1.0949 is support.

Daily Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the downtrending Gann angle at 1.1053 and the Fibonacci level at 1.1055.

Bullish Scenario

A sustained move over 1.1055 will indicate the presence of buyers. If this generates enough upside momentum then look for a move into the minor top at 1.1063, followed by the downtrending Gann angle at 1.1072. Overtaking this angle could drive the EUR/USD into the uptrending Gann angle at 1.1099.

Bearish Scenario

A sustained move under 1.1053 will signal the presence of sellers. This could trigger a retest of the 50% level at 1.1021. This is a potential trigger point for an acceleration to the downside with the next target angle coming in at 1.0989.

GBP/USD, USD/CAD, USD/MXN – North American Session Daily Forecast

GBP/USD continues to post strong gains. In Wednesday’s North American session. Currently, the pair is trading at 1.2830, up 0.55% on the day.

Cable Surges on Brexit Optimism

The British pound surged on Tuesday, climbing an impressive 1.2%. The pound has enjoyed an excellent October, gaining 4.0%. The catalyst for this run has been the Brexit withdrawal date of October 31 and whether a deal can be made in time. The pound has soared as the markets are clearly of the opinion that an agreement can be reached and a nightmarish no-deal scenario avoided.

Technical Analysis

GBP/USD easily broke through 1.2653 on Tuesday and proceeded to test resistance at 1.2750. The trend for the pound to dollar ratio is up, and if the pair continues to move higher, it could soon set its sights on resistance at 1.2870. On the downside, there is support at 1.2585.

GBP/USD 4-Hour Chart

USD/CAD

USD/CAD is trading sideways in Wednesday’s North American session. Currently, the pair is trading at 1.3214, up 0.07%.

Canadian CPI Beats Forecast

Canadian CPI moved closer to the Bank of Canada target of 2.0%. On an annualized basis, CPI showed a 1.9% gain, above the forecast of 1.7%. Trimmed CPI, which excludes the most volatile items which are covered in CPI, remained steady at 2.1%, on an annualized basis.

Technical Analysis

1.3240 remains an immediate resistance line and has been under pressure during the week. On the downside, the pair has tested support at 1.3200, but has not been able to push sustain downward movement below this level. I do not expect any significant movement for the remainder of the Wednesday session.

USD/CAD 4-Hour Chart

USD/MXN

USD/MXN has recorded slight gains on Wednesday. In the North American session, the pair is trading at 19.26, up 0.11% on the day.

Technical Analysis

USD/MXN broke through support at 19.30 early in the week and is putting pressure on 19.20, which is a major support level. This line, which has remained intact since early August, could be tested during the week. On the upside, there is resistance at 19.45.

What is The Target of The Pound?

In less than a week, the British pound strengthened by 5% to the dollar and 4.3% against the euro to its highest levels in five months. The UK’s FTSE100 added 0.7% during the same period, and this week it is declining due to the strengthening of the national currency, although it rose in dollar terms by more than 4%. This performance better than the S&P500 growth by 3.5% over the same time.

Since last Thursday’s rally, GBPUSD has come a long way from near 1.22 and touched 1.28 last night. At the time of writing, the pound corrected to 1.2750, although the pair remains above the critical 200-day moving average line at 1.2710. It often acts as an essential trend indicator. Fixing the pound above this line at the end of this week will be a necessary signal for the markets to end the devaluation period.

The British pound sold out in July, declining below 1.20 in August and September, reflecting the maximum fear around chaotic exit of Britain from the EU. The appearance of significant signs of progress in the Irish border negotiations was a critical factor in the trend reversal.

If the EU and Britain agree deal on an exit on October 31 during Thursday and Friday summit, and the UK Parliament accepts it at the Saturday session, GBPUSD may quite quickly return to this year highs around 1.32.

The strengthening of the pound above its 200-day average in 2017 triggered a prolonged rally by 13% to 1.43. Fundamentally, the British currency in the coming months may get lift by both higher inflation rates and stronger economic indicators, which may be positively affected by the weakening of the British pound earlier. Without the uncertainty around Brexit, the Bank of England may well be more determined in its fight against inflation. Thus, the lows around 1.20 may well be a bottom for GBPUSD for the foreseeable future.

The EURGBP reached its peak near 0.93 in August, after which it turned sharply down, and now is trading by 7% below its peak levels at 0.8650. As the British and EU deal may have a positive impact not only on the pound but also on the euro, the potential for the weakening of EURGBP is noticeably lower – from 0.85 to 0.8350. Around 0.85, the pair consolidated from March to May, and on the way to 0.8350, it redeemed on the downturns in the period from August 2016 to May 2017, which makes these areas significant attraction points for the markets.

This article was written by FxPro

Crude Steadies, But Remains Under Pressure

Crude oil is showing little movement on Wednesday. In the European session, WTI is trading at $53.14, up $0.20, or 0.38%. Brent crude is trading at $58.91, down $0.06, or 0.10%.

Is a U.S-China Trade Deal at Hand?

Investors are keeping a close eye on trade talks between the U.S. and China. There has been some optimism that a limited deal (“Phase 1”) can be hammered out, which would be the first of up to three “mini agreements”. This would enable to sides to remove tariffs, while at the same time, postpone the most intractable issues for another time. If the sides can reach any kind of a deal, growth will improve and the demand for crude will increase. However, investor confidence slipped earlier in the week, as the Chinese media reported that China would demand further talks before agreeing to a Phase 1 agreement. The U.S. has sounded optimistic about reaching a deal, and has canceled tariffs which were set to take effect this week. A new 15% on $160 billion in Chinese goods is scheduled to take effect on December 15, but would likely be rescinded if the sides can reach an agreement before then. Traders should be prepared for further volatility from crude, depending on the progress of the current round of trade talks.

Crude Inventories – Another Surplus?

Another important factor for crude movement is the Energy Information Administration (EIA) crude inventory report. The weekly report has been posted four successive surpluses, pointing to an oversupply of U.S. crude. Another large surplus is expected on Thursday, with a forecast of 3.0 million barrels. This streak of surpluses is putting upward pressure on crude prices, and another surplus could push crude higher on Thursday.

WTI/USD 4-hour Chart

Silver Dips to 2-Week Low as U.S-China Trade Talks Continue

Silver prices are lower on Wednesday, following the downward trend seen on Tuesday. In the European session, silver is trading at $17.27, down $0.14, or 0.80% on the day. Earlier in the day, the white metal slipped to $17.21, its lowest level since October 3.

Stocks Up, Silver Down

Risk appetite rose on Tuesday, as investors are somewhat optimistic that the U.S. and China will reach a limited trade agreement. The “Phase 1” deal would be the first of up to three mini-agreements, allowing the sides to postpone dealing with thorny issues such as forced technology transfers to another time. The Trump administration has canceled tariffs that were scheduled to take effect this week. Still, the U.S. has yet to remove a new 15% tariff scheduled to commence on December 15 on $160 billion worth of Chinese goods. Treasury Secretary Mnuchin said this week that he expects a deal to be reached, which would cancel those tariffs. Investors have responded by buying equities, while precious metals have lost ground. Silver prices have been fairly steady in the month of October, but that could quickly change, based on developments in the U.S-China talks.

There is added pressure on China to show more flexibility in the negotiations, as the Chinese economy has been the big loser in the trade war with the U.S. In September, Chinese exports to the U.S. declined by 22%, on an annualized basis. The Chinese manufacturing sector is sputtering, as the Chinese Manufacturing PMI has pointed to contraction for the past four months.

Silver Technical Analysis

Silver is currently showing some downward movement, but the metal has remained close to the 17.50 line for most of October. The 50-EMA is at 17.46, but it is the 200-EMA at 16.90 which could become relevant, if the downward movement continues. On the upside, the round number of 18.00 has remained intact since late September.  
XAG/USD 4-Hour Chart

GBP/USD Daily Forecast – Sterling Holds Near Highs Awaiting Further Brexit News

Brexit Talks Resume in Brussels

EU’s chief negotiator Michael Barnier wanted a legal text of a potential deal delivered by Tuesday but after negotiating until 1:30 AM yesterday, an agreement could not be made. Talks resume today, taking it right down to the wire as negotiations are not meant to take place during the EU summit which starts tomorrow.

I suspect GBP/USD will extend gains if we get word later in the day that a legal text was finalized. However, UK Prime Minister Johnson still has his work cut out for him.

If he’s able to come to an agreement with EU negotiators today, the deal will still need to be approved by the member states at the EU summit which takes place on Thursday and Friday.

But more importantly, the UK parliament needs to vote on the deal. Since Johnson has lost his majority, it’s unclear if all his efforts will be fruitful since parliament could turn it down.

If a deal is not reached, Johnson will be required to request an extension under the recently passed Benn act. This could get tricky as the British PM has said several times that the UK will leave on October 31 no matter what. But when pressed for an answer, he has also said that he will abide by the law.

Technical Analysis

GBP/USD is up about 4% since Johnson announced last week that he found a pathway to a potential deal. Although technical indicators are in oversold territory at this point, I think the exchange rate can continue to move higher if there is further positive news.

GBPUSD 4-Hour Chart

The next level I have my eye on is 1.2924. This level was respected on a weekly chart after the referendum that took place over three years ago.

Price action is likely to be volatile and therefore I’m looking at support at 1.2575. Normally, that level would fall well out of the daily range for the pair. However, considering what is at stake, I’m not ruling out a dip towards it.

Bottom Line

  • An announcement might come that a deal has been agreed on with negotiators later today.
  • The legal text of these negotiations would then be put forth to a vote at the EU summit.
  • If approved at the EU summit, it will go to the UK parliament. In a rare move, parliament will convene on Saturday to decide on the next step.

EUR/USD Daily Forecast – Euro Continues to Battle 50-Day Moving Average

Brexit Talks Stand to Drive Volatility to EUR/USD

Price action in the FX markets on Tuesday provided a glimpse of which currencies are likely to see a reaction based on how things progress with reaching a Brexit deal.

Since last week, the British pound has been firmly bid and was last seen trading near highs not seen since June against the dollar. But yesterday’s surge higher in GBP/USD accompanied a bullish reaction in EUR/USD which we’ve not seen before.

EUR/USD had declined below the 1.1000 handle and then rallied nearly 50 pips in 30 minutes on Brexit news. This suggests if Brexit talks are favorable, EUR/USD is likely to continue its recent upward trend.

So far the 50-day moving average has been holding the pair lower on a daily close basis. But the indicator is not likely to be much of a hurdle on positive Brexit news. We are likely to get some market-moving news later today as Brexit negotiations will stop before the EU summit which starts tomorrow.

EUR/USD Little Changed After CPI Data

The consumer price index in the Euro zone was reported to rise at the slowest pace in nearly three years. Meanwhile, core CPI, which strips away volatile items such as food, energy, alcohol, and tobacco, remained unchanged at 1% in the year to September. The exchange rate had a muted reaction to the report.

Technical Analysis

Two items have been capping rallies in EUR/USD. A horizontal level at 1.1059 and the 50-day moving average.

EURUSD Daily Chart

If we get some further positive Brexit news, I’d expect this area to be breached, putting in focus resistance at 1.1129. This is a level that was major support April and in May.

In the absence of news, I expect that sellers will try and drive the pair lower once again. Although we may see buyers step in ahead of yesterdays low just below 1.1000, this continues to be an important area for the pair.

Bottom Line

  • Headlines related to Brexit stand to move EUR/USD and today could be a volatile day for the pair.
  • Euro zone CPI data fell short of expectations but did not have an impact on the exchange rate.

AUD/USD Forex Technical Analysis – Weakens Under .6721, Strengthens Over .6751

The Australian Dollar is trading lower on Wednesday, pressured by fresh tensions between the United States and China after Beijing threatened to retaliate over the passage of measures in Washington aimed at supporting Hong Kong Protesters.

“If the relevant act were to become law, it wouldn’t only harm China’s interests and China-U.S. relations, but would also seriously damage U.S. interests,” said Geng Shuang, China’s Foreign Ministry spokesperson, in a statement on the body’s website.

“China will definitely take strong countermeasures in response to the wrong decisions by the U.S. side to defend its sovereignty, security and development interests.”

At 08:00 GMT, the AUD/USD is trading .6733, down 0.0025 or -0.37%.

AUDUSD
Daily AUD/USD

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, three days of selling pressure have put the Forex pair in a position to change the main trend to down.

A trade through .6710 changes the main trend to down. A move through .6811 will signal a resumption of the uptrend.

The short-term range is .6671 to .6811. Its retracement zone at .6741 to .6724 is currently being tested. Trader reaction to this zone could determine the next near-term move since buyers will likely try to form another secondary higher bottom.

The main range is .6895 to .6671. Its retracement zone at .6783 to .6809 is resistance. This zone stopped the rally on October 11 at .6811.

Daily Technical Forecast

Based on the early price action and the current price at .6733, the direction of the AUD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the short-term Fibonacci level at .6724.

Bearish Scenario

A sustained move under .6724 will indicate the selling pressure is increasing. This is followed closely by an uptrending Gann angle at .6721. If this angle fails as support then look for the selling to possibly extend into the main bottom at .6710.

Taking out .6710 will change the main trend to down. This could lead to a possible extension of the selling into the next uptrending Gann angle at .6696. This is the last potentially bullish angle before the .6671 main bottom.

Bullish Scenario

A sustained move over .6425 will signal the return of buyers. Since the main trend is up, buyers may step in on the test of the retracement zone at .6741 to .6724. Furthermore, they may try to defend the trend by protecting the main bottom at .6710.

The first upside target is the 50% level at .6741. This is followed by a downtrending Gann angle at .6781. Sellers came in earlier in the day on a test of this angle. Taking it out could trigger an acceleration into a pair of downtrending Gann angles at .6775 and .6781.

EUR/GBP Morning Star Pattern Should Push the Price Up

Dear Traders,

The EUR/GBP has made a morning star pattern straight off W L3 camarilla pivot support. The price is retracing.

There is still a lot headline risk within the GBP basket. Nevertheless, the GBP has been excellent to trade lately and today I am paying attention to the EUR/GBP. We could see the price going for a retest of the POC zone. This could possibly set up new short trades. 0.8780-0.8815 is the area for possible rejections. Targets are 0.8762, 0.8662 and 0.8632 after the POC retest. Below 0.8632 the price will be strongly bearish with a possible retest of 0.8550 zone.

The analysis has been done with the CAMMACD.MTF template.

For more daily technical and wave analysis and updates, sign-up up to our ecs.LIVE channel.

Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

AUD/USD, NZD/USD, USD/CNY – Asian Session Daily Forecast

AUD/USD

AUD/USD has lost ground for a third successive day. In Wednesday’s Asian session, the pair is trading at 0.6743, down 0.14% on the day.

Investors Eye Job, Confidence Data

There are no key Australian events on Wednesday, but the markets are waiting for key employment numbers on Thursday. Employment change is expected at 15.3 thousand in September, lower than August but still a decent reading. The unemployment rate is projected to remain steady at 5.3%.

As well, the NAB releases its quarterly business confidence report. Traders should be prepared for stronger movement from the pair on Thursday.

AUD/USD Technical Analysis

AUD/USD continues to move lower and tested support at 0.6760 on Tuesday. Currently, the pair is slightly below this level. If the downward movement continues, support at 0.6710 will be vulnerable. This line is protecting the round number of 67.00, which last saw action in early October.

AUD/USD 4-hour Chart

USD/CNY

USD/CNY is showing limited movement in early Wednesday trade. In the Asian session, the pair is trading at 7.0915, up 0.14% on the day.

USD/CNY Technical Analysis

USD/CNY has reversed directions after the recent rally by the yuan, in which the pair lost close to 1.0%. The pair tested support at 7.0592 on Monday, but this line has since stabilized, with the pair moving higher. Still, this line could be further tested during the week. Below, we find support at the 7.0400 line. On the upside, 7.1100 is relevant and could face pressure if the upward movement continues.

USD/CNY 4-Hour Chart

NZD/USD

NZD/USD has posted slight losses on Wednesday.  In the Asian session, the pair is trading at 0.6285, down 0.14% on the day.

New Zealand CPI Beats Forecast

New Zealand CPI, which is released every quarter, was better than expected in the third quarter. Consumer inflation gained 0.7%, edging above the estimate of 0.6%. NZD/USD has responded to the release with marginal gains.

NZD/USD Technical Analysis

NZD/USD continues to test support at 0.6280, but is having difficulty consolidating below this stubborn line. Below, we find support at 0.6230. On the upside, 0.6357 has remained intact in resistance since mid-September.

NZD/USD 4-Hour Chart

Where Next for Oil After Its Double Reversal?

In yesterday’s Alert, we wrote the following:

Crude oil moved higher last week, especially on Thursday and Friday. This rally was in tune with the clear buy signals from the CCI and Stochastic indicators. While crude oil pulled back in today’s pre-market upswing, it’s unlikely that the rally is completely over at this time. Why? Because of two factors: one that we covered previously, and one that we didn’t cover so far.

The thing that we already discussed is the upside target based on the 38.2% Fibonacci retracement. It was not reached yet. Consequently, the price most likely has further to run.

The thing that we didn’t mention previously is the fact that crude oil just invalidated the breakdown below the rising dashed support line that’s based on the December 2018 and the August 2019 lows. Invalidations of breakdowns are bullish on their own. That’s yet another reason to expect the profits on the current crude oil long position to increase further.

The above generally remains up-to-date. The price of crude oil declined today and then rose back up and at the moment, our long positions are about $1.50 in the black. The question is whether we run for the hills because of this week’s decline, or do we wait for the price target to be reached.

The latter still appears to be the better idea. Applying the Fibonacci retracements to the October rally shows that today’s low formed almost exactly at the 61.8% Fibonacci retracement level. That’s the classic way for any asset to correct its preceding move and then to resume the trend. The short-term trend remains up, which means that the odds are that our target area will be reached.

One concerning matter is the situation in the USD Index. In the very recent past – the last several days – the USD Index and crude oil moved in the opposite ways. Thursday’s and Friday’s upswing in crude oil corresponded to declining USD. And the USD Index seems to be bottoming.

Then again, the relationship may be very short-lived and crude oil might be able to rally despite USD’s rally for a few days, anyway. After all, the USD Index is up at the moment of writing these words, and crude oil is almost done correcting its initial downswing.

Consequently, in our view, the current long position is justified from the risk-reward point of view.

If you enjoyed the above analysis and would like to receive daily premium follow-ups, we encourage you to sign up for our Oil Trading Alerts to also benefit from the trading action we describe – the moment it happens. Check more of our free articles on our website – just drop by and have a look. We encourage you to sign up for our daily newsletter, too – it’s free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to our premium daily Gold & Silver Trading Alerts. Sign up for the free newsletter today!

Thank you.

Przemyslaw Radomski, CFA

Editor-in-chief, Gold & Silver Fund Manager

Sunshine Profits – Effective Investments through Diligence and Care


All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Gold, The Ultimate Safe Haven Asset. A Looming Nobel Prize?

2019 Nobel in Economics and Gold

Yesterday was a big day! At least for all those boring economists and similar bean-counters. The Nobel Prize in economics was awarded. Abhijit Banerjee, Esther Duflo, and Michael Kremer became 2019 laureates for their experimental approach to alleviating global poverty.

Nice! But, dear Nobel Committee, we also have great ideas how to reduce poverty in the world. Just give everyone some gold! We know, that’s not the quick road to wealth, but whatever the current outlook, gold portfolios should appreciate substantially in the long run.

Jokes aside, and let’s get serious. How about central banks stop printing money? You see, inflation is a silent wealth killer. Even a small rate of inflation, like the popular 2-percent target, means that prices double each generation (around 35 years). But in many developing countries, inflation rates are much higher, closer to 5 percent, which means that prices double each 14-15 years. Inflation is a great hit to real wealth. So, even if gold does not generate any yield, it can provide people a hedge against inflation (under the condition that inflation is not small or diminishing).

Or how about central banks stop keeping interest rates at ultralow levels? Yes, zero or even subzero interest rates are great for borrowers, but we doubt whether anyone attained wealth through indebtedness. If you are a company, you can leverage to finance your investments. But if one is a consumer and takes a loan to buy another luxury car, he is moving away from making a fortune. You cannot reach wealth except through hard work, savings and investments. Due to diminished compound interest, the ultralow interest rates reward saving much less, putting all savers in troubles.

For example, if a person saves $100 each month at 4 percent, then she will have $120,000 in forty years, but only $59,000 at 1 percent. Our saver would be about half poorer in forty years. Say goodbye to your happy retirement under the palm trees! Gold will not substitute your pension fund, but when added to portfolio, it can make it more resilient and profitable. The fact that gold usually shines during very low real interest rates, is a nice bonus!

Last but not least, how about stopping maintaining the flawed monetary system which generates business cycle and economic crises with all their disastrous consequences (think about high unemployment)? Luckily, the yellow metal can help in this regard as well. Even central banks begin to notice the exceptional features of gold… or, goud!

Dutch Central Bank Acknowledges the Unique Role of Gold

The De Nederlandsche Bank (DNB), which is the central bank of the Netherlands, has published a rather unusual note. The DNB pointed out that gold is the ultimate safe-haven asset, which always retains its value, crisis or no crisis:

Shares, bonds and other securities are not without risk, and prices can go down. But a bar of gold retains its value, even in times of crisis. That is why central banks, including DNB, have traditionally held considerable amounts of gold. Gold is the perfect piggy bank – it’s the anchor of trust for the financial system. If the system collapses, the gold stock can serve as a basis to build it up again. Gold bolsters confidence in the stability of the central bank’s balance sheet and creates a sense of security.

Isn’t it a shocking note? The respected central bank of a developed economy has finally acknowledged the possibility of the monetary system collapse. We hope that the timing of the publication does not reflect any insider knowledge about the state of the global monetary system… Or, gold bulls could actually keep their fingers crossed for it. And what is more: the DNB admitted that gold would be superior than financial assets during the hard reset! Finally, we can praise the central banks!

If you enjoyed the above analysis, we invite you to check out our other services. We provide detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. If you’re not ready to subscribe yet and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!

Disclaimer: Please note that the aim of the above analysis is to discuss the likely long-term impact of the featured phenomenon on the price of gold and this analysis does not indicate (nor does it aim to do so) whether gold is likely to move higher or lower in the short- or medium term. In order to determine the latter, many additional factors need to be considered (i.e. sentiment, chart patterns, cycles, indicators, ratios, self-similar patterns and more) and we are taking them into account (and discussing the short- and medium-term outlook) in our trading alerts.

Thank you.

Arkadiusz Sieron
Sunshine Profits‘ Gold News and Gold Market Overview Editor


Disclaimer 

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Gold Cycle Forecast Signals Bottom is Near

Now that the $1550 level has been reached, we are expecting a rotation to levels that may reach just below the $1450 level before attempting to set up another momentum base/bottom formation.  And just like clockwork, Gold has followed our predictions and price is falling as we expected. Just look at our October 2018 chart where we forecasted the price of gold rallies and corrections along the way.

GOLD CYCLE FORECAST – DAILY CHART

Take a look at the most active cycles for gold and where our gold forecast is pointing to next. The downside rotation currently in Gold is likely not quite over yet and the gold mines will selloff the most.  This new momentum base should setup and complete once the gold cycles bottom.  The next upside price leg should push Gold well above the $1760~1780 level – so get ready for another big rally of 20%+.

GOLD MINERS SELL OFF – DAILY CHART

Unfortunately, so many traders are highly emotional and fall in love with positions in shiny metals or gold miner stock positions. Yet we all know if you trade on emotions or fall in love with a position, you are most likely to lose a ton of money. Two weeks ago I got so much flack from traders when I said gold miners were on the verge of a violent drop in price, then the bottom fell out and the dropped huge. Then last Thursday morning when gold, silver, and miners are trading up huge in pre-market and at the opening bell I warned it looked like a big fakeout and price could collapse for yet a second leg down and the same response from those emotional traders who love their positions and won’t sell them when they should as active traders.

HAVE YOU OUTPERFORMED GDXJ THIS YEAR?

If you like to trade in the precious metals sector then you most likely love to trade the gold miners ETF GDXJ. As you can see above GDXJ is only up 19.55% year to date. Sure, it’s a nice gain, but are you still holding your metals position knowing you just gave back most or all of your profits?

Being a technical analyst my focus is to only enter a position when the charts/analysis point to an immediate price advance or decline. I site in cash waiting for the next cycle top or bottom to form in an asset class like gold miners, gold, silver, or silver miners, and once the cycle starts I jump on the wave and ride it for the move until it shows signs that its weakening and will break. almost 50% of the year my portfolio is sitting in cash. And my average position only lasts around 12 days.

Take a look at all my precious metals related trades this year (2019) below. They are all winners, and total gain for subscribers of my Wealth Building Newsletter is 41.74% profit. More than double the return than if you were riding the GDXJ roller coaster for 9 months straight and all your money at risk.

My point here is that no matter how much you love metals (and I LOVE METALS), but you do not need to always be in a position in them. There are times to own, and times to watch with your money safely in cash.

CONCLUDING THOUGHTS:

The end result is that the fear and greed that is starting to show up in the precious metals markets may become an “unruly beast” if it continues to grow in strength and velocity.

Keep reading our research because our proprietary tools have been nailing all of these price targets and moves many months in advance.  The next bottom in metals should set up when our cycle bottoms – then the next upside leg will begin.  This time Gold should target $1800 and Silver should target $21 to $24.  This will be an incredible move higher if it plays out as we suspect.

I urge you visit my Wealth Building Newsletter and if you like what I offer, join me with the 1-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Join Now and Get a Free 1oz Silver Bar!

I can tell you that huge moves are about to start unfolding not only in metals, or stocks but globally and some of these supercycles are going to last years. A gentleman by the name of Brad Matheny goes into great detail with his simple to understand charts and guide about this. His financial market research is one of a kind and a real eye-opener. PDF guide: 2020 Cycles – The Greatest Opportunity Of Your Lifetime

Chris Vermeulen
www.TheTechnicalTraders.com

Global Equity Markets Roar

Third-quarter results for UnitedHealth group were better than expected and led it to raise profit guidance for the year, with similarly upbeat reports also from Johnson and Johnson and JPMorgan. European equities were mostly up, too. Gold struggle in the face of surging US bond yields and the general risk-on fervour 

Brexit

The Pound galloped higher overnight, leaving the currency around 4% stronger over the past week. RTE News’ Tom Connelly, who broke the original Brexit ‘deal’ story, writes that the EU and UK sides are the closest they have been and that there is some optimism now. He has Irish sources typically, so this is another positive sign.

European stocks rallied to levels not seen in more than a year as speculation that a Brexit deal is imminent prompted traders to scoop up shares across the board.
Of course, any ‘breakthrough’ between the EU and the UK must still face the British house parliament.

But traders remain favourably positioned for the ‘white smoke’ moment hoping for domestic ratification on Brexit.
Framing out the “feel good” risk-on vibe, the US-China trade discussions seem to be making some progress, and the prospect of a genuine truce has risen.
Asia open

While Asian cash market looks set to gain however entering the morning session, traders have hit the pause button possibly awaiting the outline of a Brexit agreement to judge the likelihood of parliamentary approval, which suggest there still much wood to be chopped before pen gets put to paper.

As well, investors are looking for more clarity around the various phases of the US-China trade talks. Individually, Chinas firm commitment to buy $50 billion in US farm goods, details around December tariff detente, possible first-level tariff rollbacks and any signs progress on lifting the US export ban on Huawei, yup lots of wood to chop there also.

Oil market

Crude fell for a second day amid a weakening global growth outlook and as US oil producers defensively hedge against copious crude supplies in the world’s largest economy.

Oil markets continued to struggle overnight under the weight of a dreary macro scrim as back to back miserable China data prints (bad trade data and factory gate inflation) were compounded by a Germany’s sickly ZEW survey which pressured prices.

However, a lower base is being tentatively held in check after OPEC Secretary-General Mohammad Barkindo reiterated his “whatever it takes” to sustain oil market stability mantra.

While corporate earnings reports and phase one of the US-China trade talks is buttressing general risk sentiment, without an implicit rollback of existing tariffs, a tariff detente will have minimal effects on shifting the global growth dial to a more pleasant setting and therefore limited impact on oil prices. In other words, a detente means things may not necessarily get worse, but it doesn’t suggest that global economic conditions will improve any time soon.

But the fact that the losses are very sticky at these downcast levels it could be another worrying sign for oil bulls.

Gold market

The robust US corporate earnings reports coupled with positive developments on the Brexit front has triggered a market rotation out of bonds into equities resulting in US 10-year bond yields significantly rising which is weighing on the opportunity cost of holding gold.

Roaring US equity markets and an upsurge in US bond yields are possibly two of the worst flatmates for gold; as a result, gold toppled nearly $20 top to bottom overnight.

Also, The NY Fed manufacturing survey lifted a better-than-expected 2pts in October, giving the hawks on the FOMC “something to talk about” and perhaps hawkishly influencing their October policy decision process.

Currency markets

Japanese Yen

The “Risk on” environment has propelled the USDJPY higher within reach of the psychological 109 level as the S&P 500 had a peak above the equally cerebral 3000 markers.

Australian Dollar

The market is still debating the RBA’s monetary policy gymnastics. But given the RBA Board is expressing some doubts about the efficacy of dropping rates further operating in what for the RBA is uncharted territory, it could mean slowing the pace of rate cuts but doesn’t necessarily alter their dovish bias. Despite a frothy global “risk-on” environment, the Aussie dollar is trading 20 pips off yesterday’s session tops.

The Yuan

The Yuan may remain stable within the current 7.05-7.10 level while the phase one trade deal gets chiselled out.

Back to back weaker economic data out of China (Trade and factory inflation gate) provided a stark reminder if not a reality check that a weaker Yuan from a pure fundamental landscape may still be in the cards. As such the USDCNH has traded with a better bid overnight.

But given there remains a strong possibility of a Phase 1 deal getting inked, at minimum USDRMB topside should remain capped and we could see the CNH outperform in the weeks ahead assuming phase 2 and 3 of the propose US-China trade deal comes to fruition.

This article was written by Stephen Innes, Asia Pacific Market Strategist at AxiTrader

Ethereum and Stellar’s Lumen Daily Tech Analysis – 16/10/19

Ethereum

Ethereum fell by 3.36% on Tuesday. Reversing a 3.16% gain from Monday, Ethereum ended the day at $180.58.

A bullish start to the day saw Ethereum strike an early morning intraday high $188.58 before hitting reverse.

Falling short of the first major resistance level at $189.67, Ethereum fell to a late intraday low $176.48.

The reversal saw Ethereum fall through the first major support level at $182.28 and second major support level at $177.70.

Finding support late in the day, Ethereum broke back through the second major support level to limit the downside on the day.

The extended bearish trend, formed at late April 2018’s swing hi $828.97, remained firmly intact. A reversal from June’s current year high $364.49 back through the 23.6% FIB of $257 reaffirmed the extended bearish trend.

At the time of writing, Ethereum was down by 0.3% to $180.03. A bearish start to the day saw Ethereum fall from an early morning high $181.2 to a low $179.78.

Ethereum left the major support and resistance levels untested early on.

ETH/USD 16/10/19 Daily Chart

For the day ahead

Ethereum would need a move back through the morning high to $182 levels to support the recovery of Tuesday’s loss.

Support from the broader market would be needed, however, for Ethereum to target Tuesday’s high $188.58.

Barring a broad-based crypto rally, the first major resistance level at $187.28 would likely limit any upside on the day.

Failure to move through to $182 levels could see Ethereum spend another day in the red.

A fall back through to sub-$180 levels would bring $176 levels back into play before any recovery.

Barring an extended sell-off through the day, however, Ethereum should steer clear of the first major support level at $175.18.

Looking at the Technical Indicators

Major Support Level: $175.18

Major Resistance Level: $187.28

23.6% FIB Retracement Level: $257

38.2% FIB Retracement Level: $367

62% FIB Retracement Level: $543

Stellar’s Lumen

Stellar’s Lumen slid by 3.88% on Tuesday. Partially reversing an 8.4% rally from Monday, Stellar’s Lumen ended the day at $0.06395.

A mixed start to the day saw Stellar’s Lumen rise to an early morning intraday high $0.06688 before hitting reverse.

Coming up against the first major resistance level at $0.0685, Stellar’s Lumen slid to a late intraday low 0.062696.

Finding support at the first major support level at $0.0630, Stellar’s Lumen recovered to $0.0639 levels to limit the loss on the day.

The extended bearish trend remained firmly intact, reaffirmed by 24th September’s new swing lo $0.051614. Stellar’s Lumen continued to fall short of the 23.6% FIB of $0.1310 following a pullback from $0.13 levels in late June.

At the time of writing, Stellar’s Lumen was up by 0.97% to $0.06457. A bullish start to the day saw Stellar’s Lumen rise from an early morning low $0.06395 to a high $0.06457.

Stellar’s Lumen left the major support and resistance levels untested early on.

XLM/USD 16/10/19 Daily Chart

For the day ahead

Stellar’s Lumen would need to hold onto $0.0645 levels to support a run at the first major resistance level at $0.06630.

Support from the broader market would be needed, however, for Stellar’s Lumen to break through to $0.0650 levels.

Barring a broad-based crypto rally through the day, the first major resistance level at $0.0663 would likely limit any upside.

Failure to hold onto $0.06450 levels could see Stellar’s Lumen hit reverse. A fall back through the morning low $0.063950 would bring sub-$0.0630 levels into play before any recovery.

Barring another crypto sell-off, however, Stellar’s Lumen should steer clear of the first major support level at $0.06210.

Looking at the Technical Indicators

Major Support Level: $0.06210

Major Resistance Level: $0.0663

23.6% FIB Retracement Level: $0.1114

38% FIB Retracement Level: $0.1484

62% FIB Retracement Level: $0.2082

Please let us know what you think in the comments below.

Thanks, Bob

Bitcoin Cash – ABC, Litecoin and Ripple Daily Analysis – 16/10/19

Bitcoin Cash – ABC – Finds Support

Bitcoin Cash ABC fell by 3.21% on Tuesday. Reversing a 1.90% rise from Monday, Bitcoin Cash ABC ended the day at $220.88.

A relatively bullish start to the day saw Bitcoin Cash ABC strike an early morning intraday high $228.93.

Falling short of the first major resistance level at $230.63, Bitcoin Cash ABC slid to a late morning low $222.68.

Bitcoin Cash ABC fell through the first major support level at $223.84 before recovering to $226 levels.

A late afternoon sell-off did the damage, however, with Bitcoin Cash ABC sliding to an intraday low $217.71.

Bitcoin Cash ABC fell back through the first major support level and through the second major support level at $220.16.

Finding support from the broader market late on, Bitcoin Cash ABC recovered to $220 levels to limit the day’s losses.

At the time of writing, Bitcoin Cash ABC was up by 1.41% to $224.00. A bullish start to the day saw Bitcoin Cash ABC rise from an early morning low $222.13 to a high $225.33.

Bitcoin Cash ABC left the major support and resistance levels untested early on.

For the day ahead, Bitcoin Cash ABC would need to steer clear of sub-$223 levels to support a move back through to $225 levels.

Support from the broader market would be needed, however, for Bitcoin Cash ABC to take a run at the first major resistance level at $227.3.

Barring a broad-based crypto rally, the first major resistance level would likely cap any upside on the day.

Failure to steer clear of sub-$223 levels could see Bitcoin Cash ABC test the first major support level at $216.08.

Barring a broad-based crypto sell-off, however, Bitcoin Cash ABC should steer clear of sub-$216 levels.

BCHABC/USD 16/10/19 Daily Chart

Litecoin Back at $54 Levels

Litecoin slid by 4.08% on Tuesday. Reversing a 0.71% gain from Monday with interest, Litecoin ended the day at $54.56.

Tracking the broader market, Litecoin struck an early morning intraday high $57.42 before hitting reverse.

Coming up against the first major resistance level at $57.46, Litecoin slid to a late morning intraday low $53.45.

Litecoin fell through the major support levels before recovering to $55 levels. Litecoin broke back through the third major support level at $54.15 and second major support level at $55.45.

A broad-based crypto sell-off in the late afternoon, however, saw Litecoin slide back to $53 levels before finding support.

Litecoin fell back through the second and third major support levels before recovery to $54 levels late in the day.

At the time of writing, Litecoin was up by 0.71% to $54.95. A relatively bullish start to the day saw Litecoin rise from an early morning low $54.55 to a high $55.13.

Litecoin left the major support and resistance levels untested early on.

For the day ahead, a move through to $55.20 levels would support a run at the first major resistance level at $56.84.

Litecoin would need the support of the broader market, however, to break through to $57 levels.

Barring a broad-based crypto rebound, Litecoin would likely come up short of Tuesday’s high $57.42.

Failure to move through to $55.20 levels could see Litecoin spend another day in the red.

A fall through to Tuesday’s low $53.45 would bring the first major support level at $52.87 into play before any recovery.

LTC/USD 16/10/19 Daily Chart

Ripple’s XRP Recovers to $0.29 Levels

Ripple’s XRP fell by 3.14% on Tuesday. Partially reversing a 7.3% rally from Monday, Ripple’s XRP ended the day at $0.28882.

A relatively bullish start to the day saw Ripple’s XRP strike an early morning intraday high $0.30 before hitting reverse.

Falling short of the first major resistance level at $0.3058, Ripple’s XRP slid to a late afternoon intraday low $0.28316.

Ripple’s XRP fell through the first major support level at $0.2837 before finding support from the broader market.

Off the back of the late support, Ripple’s XRP broke back through the first major support level limit the loss on the day.

At the time of writing, Ripple’s XRP was up by 1.1% to $0.2920. Tracking the broader market, Ripple’s XRP rose from an early morning low $0.28872 to a high $0.29261.

Ripple’s XRP left the major support and resistance levels untested early on.

For the day ahead, Ripple’s XRP would need to hold onto $0.29 levels to support a day in the green.

Support from the broader market would be needed, however, for Ripple’s XRP to break through the first major resistance level at $0.2982.

Barring a broad-based crypto rally, the first major resistance level and Tuesday’s high $0.30 would likely limit any upside.

Failure to hold onto $0.29 levels could see Ripple’s XRP hit reverse. A fall through the morning low $0.28872 would bring the first major support level at $0.2813 into play.

Barring a crypto meltdown, however, Ripple’s XRP should steer clear of sub-$0.28 levels on the day.

XRP/USD 16/10/19 Daily Chart

Please let us know what you think in the comments below

Thanks, Bob

Natural Gas Price Prediction – Prices Rise on Cool Weather Forecast

Natural gas prices surged another 2.5% on Tuesday. Tropical depression 15, forming in the Atlantic and there is one other storm that has less than a 10% chance of becoming a tropical cyclone. There is also one storm in the Gulf of Mexico with a 10% chance of becoming a tropical cyclone. The weather is expected to be colder than normal throughout most of the mid-west which could buoy natural gas heating demand.

Technical Analysis

Natural gas prices rallied sharply and is poised to test resistance near the October highs at 2.40. Support on natural gas is seen near the 10-day moving average at 2.28 and then the October lows at 2.18. Short term momentum has flipped and turned positive in oversold territory as the fast stochastic generated a crossover buy signal. Additionally, the current reading on the fast stochastic is 43, above the oversold trigger level of 20 and in the middle of the neutral range. The fast rebound in the fast stochastic reflects accelerating positive momentum. Medium-term momentum as turning and the MACD (moving average convergence divergence) is poised to generate a crossover buy signal.

Export Demand is Flat Week over Week

The Energy Information Administration reports that liquid natural gas exports are flat week over week. Eleven LNG vessels, according to the EIA, with a combined LNG-carrying capacity of 41 Bcf departed the United States between October 3 and October 9. One vessel was loading at the Sabine Pass LNG terminal on Wednesday. Net injections into storage totaled 98 Bcf for the week ending October 4, compared with the five-year average net injections of 89 Bcf and last year’s net injections of 91 Bcf during the same week.

Gold Price Prediction – Prices Slide as Positive Earnings Sentiment Buoys the Dollar and Weighs on Gold

Gold prices moved lower on Tuesday as the Chinese now seem to agree with phase one of the US-Chinese trade agreement. Trump and Xi are scheduled to meet on the sidelines of the APEC meeting in the middle of November. On the geopolitical front, Turkey and Syria remain in the headlines. After the US withdrew from northern Syria and Turkish forces moved in, the Kurds had no choice but to look to Syrian forces loyal to President Assad.  The US has now lost any voice in this conflict which is what President Trump likely wanted.

 

Trade gold with FXTM

 

[fx-broker slug=fxtm]

 

Technical Analysis

Gold prices moved lower pushing down after Monday’s inside day. Prices are poised to test support which is seen near an upward sloping trend line that comes in near 1,473. Resistance is seen near the 10-day moving average at 1,496, and then a downward sloping trend line that comes in near 1,513. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The fast stochastic is printing in the middle of the neutral range. Medium-term momentum has also turned negative. The MACD histogram is printing in the red with a declining trajectory which points to accelerating negative momentum and lower prices.

Positive Sentiment Weighs on Gold Prices

Gold prices lost ground as riskier assets gained traction. As stock prices move higher, US yields move in tandem. The higher yields reflect the market’s belief that the dark clouds that have covered any trade agreement could be getting lifted. Higher US yields and a weak European economy point to a stronger dollar which weighs on the price of the yellow metal. Better than expected earnings were released on Tuesday in the banking sector which buoys the US stock market, raising yields and pushing gold lower.

U.S. Dollar Index Futures (DX) Technical Analysis – Brexit Optimism, Strong Sterling Weighing on Dollar Index

The U.S. Dollar is trading slightly lower against a basket of major currencies after posting a wicked two-sided trade early Tuesday. The early session rally was fueled by increasing demand for risky assets as U.S. Treasury yields rose and equity markets soared on the back of upbeat comments over Brexit and better-than-expected U.S. earnings reports.

At 16:11 GMT, December U.S. Dollar Index futures are trading 98.015, down 0.155 or -0.16%.

The upbeat comments over Brexit, however, were a double-sided sword, however, with a surge in the British Pound helping to drive the index lower. The Euro also inched higher against the dollar. However, losses may have been limited by a drop in demand for the safe-haven Japanese Yen and Swiss Franc. The dollar also lost ground to the commodity-linked Canadian Dollar.

Dollar index traders are primarily focused on the British Pound after optimistic comments on Brexit from European negotiator Michel Barnier were backed up by reports that a draft legal text over the United Kingdom’s divorce from the European Union was being drawn up.

U.S. Dollar Index
Daily December U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top at 99.305 on October 1.

The main trend will change to down on a trade through 97.560. A move through 99.305 will negate the closing price reversal top and signal a resumption of the uptrend.

The minor trend is down. This move confirms the shift in momentum to the downside. A trade through 98.955 will change the minor trend to up.

The short-term range is 96.960 to 99.305. Its retracement zone at 98.135 to 97.855 is currently being tested. This zone provided support on Friday when the selling stopped at 97.885. Trader reaction to this retracement zone will likely determine the near-term direction of the index.

On the upside, 50% resistance levels come in at 98.435 to 58.595. On the downside, the major 50% support level is 97.140.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 98.015, the direction of the December U.S. Dollar Index the rest of the session on Tuesday is likely to be determined by trader reaction to the 50% level at 98.135.

Bearish Scenario

A sustained move under 98.135 will indicate the presence of sellers. This could trigger a further break into Friday’s low at 97.885, followed by the Fibonacci level at 97.855. This is a potential trigger point for an acceleration to the downside with 97.560 the next likely downside target.

Bullish Scenario

Overcoming the 50% level at 98.135 and sustaining the move will signal the presence of buyers. If this creates enough upside momentum then look for an extension of the rally into the 50% level at 98.435.

S&P 500 Price Forecast – Stock Markets Rally After Bank Earnings

The S&P 500 has rallied relatively significantly during the trading session on Tuesday, reaching towards the 3000 level by noon local time. Ultimately, there is a lot of noise above here and extending towards the 3025 level, so we aren’t out of the woods yet, but clearly it looks as if the market is trying to knock on the high levels. Short-term pullbacks intraday will probably continue to be looked at as buying opportunities as one of the mantras on Wall Street is “the Fed has your back”, and that of course drives stocks higher longer term.

S&P 500 Video 16.10.19

To the downside, I believe that the 50 day EMA which is currently trading at the 2950 level should offer enough support that people continue to look towards this market for gains. At this point, I believe that there will more than likely be a nice “zone of support” between the 2950 level and the 2940 level. Ultimately, this is a market that we need to pay attention to above, because if we do break out to the upside and above the recent highs, it can take off towards the 3100 level. This is certainly the time of year it could, because fall earnings season tends to be a rather impulsive move just waiting to happen.

To the downside, if we break down below the 2940 level then it’s likely that we go looking towards the 200 day EMA which is currently trading at the 2880 I am bullish, but I recognize that looking for value on pullbacks probably continues to work best.

Please let us know what you think in the comments below