E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Strengthens Over 11761.75, Weakens Under 11550.50

December E-mini NASDAQ-100 Index futures are trading sharply lower shortly before the close on Monday as traders express doubts that government policymakers will be able to agree on a new fiscal stimulus package that is needed to help keep the economy on the road to recovery.

At 20:46 GMT, December E-mini NASDAQ-100 Index futures are trading 11685.00, down 113.00 or -0.96%.

In other news, according to Reuters, Netflix Inc will tell investors on Tuesday how the ongoing COVID-19 pandemic affected membership in the third quarter – a period when analysts remain bullish on the company despite the return of live sports and more streaming competition. The video-streaming service was up around 1% ahead of its results on Tuesday.

Daily December E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through 12249.00 will signal a resumption of the uptrend. The main trend officially turns down on a move through the last swing bottom at 11197.50.

The minor trend is down. This shifted momentum to the downside. The minor trend changed to down when sellers took out 11736.50.

The intermediate range is 12444.75 to 10656.50. Its retracement zone at 11761.75 to 11550.50 is currently being tested. Trader reaction to this zone will likely determine the near-term direction of the index.

The short-term range is 10656.50 to 12249.00. Its retracement zone at 11452.75 to 11264.75 is the next downside target.

Since the main trend is up, all retracement zones are potential support areas until the trend changes to down. The price action also suggests that investors may not be willing to chase the market higher, but instead may be looking for a value area.

Short-Term Outlook

We’re going to be watching trader reaction to 11761.75 early Tuesday since this is likely to set the tone for the session. Over the short-run, however, it’s probably best to watch 11761.75 and 11550.50.

Buyers may try to form a support base inside 11761.75 to 11550.50.

We are also confident that a break down under 11550.50 will not mean a major break is coming. Buyers are still likely to come in at 11452.75 to 11264.75.

We’re also pretty confident that new fiscal stimulus is coming, but we don’t know when, or even the size of the deal. In the meantime, investors may continue to probe the downside, looking for a value area. Basically, I still like the upside potential of this market, except I only want to buy at my price. I think chasing a rally is dangerous at this time and at current price levels.

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

E-mini S&P 500 Index (ES) Futures Technical Analysis – Momentum Shifted to Downside on Monday

December E-mini S&P 500 Index futures are trading lower late Monday as investors worried that they might not see a coronavirus economic stimulus deal before the November 3 presidential election. While House Speaker Nancy Pelosi said Sunday that she was optimistic legislation could be pushed through before the election, but that an agreement would have to come by Tuesday for that to happen.

At 19:46 GMT, December E-mini S&P 500 Index futures are at 3420.00, down 42.25 or -1.22%.

A spokesperson told Fox on Monday that the White House was “cautiously optimistic” that Pelosi was moving toward making a deal.

Daily December E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower. A trade through 3541.00 will signal a resumption of the uptrend. The main trend changes to down on a trade through 3198.00. This is highly unlikely but there is room for a normal 50% to 61.8% correction of the current rally.

The minor trend is down. This accounts for the shift in momentum. The minor trend changed to down when sellers took out the last swing bottom at 3431.50. The new minor swing top is 3508.50.

The short-term range is 3576.25 to 3198.00. The index is currently testing its retracement zone at 3431.75 to 3387.00. This area is controlling the near-term direction of the index.

The second minor range is 3198.00 to 3541.00. Its retracement zone at 3369.50 to 3329.00 is the second potential downside target.

Short-Term Outlook

Based on Monday’s price action, the direction of the market the next session will likely be determined by trader reaction to the short-term Fibonacci level at 3431.75. The near-term direction, however, will likely be determined by trader reaction to the 3431.75 to 3387.00 retracement zone. We have to leave some room due to the possibility of a support base forming.

Bullish Scenario

A sustained move over 3431.75 will indicate the presence of buyers. This move won’t get interesting unless buyers can overcome 3508.50.

Bearish Scenario

A sustained move under 3431.75 will signal the presence of sellers. This could lead to a labored break due to a series of retracement levels, but not necessarily a change in trend to down. The potential support levels include 3387.00, 3369.50 and 3329.03.

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

Natural Gas Price Prediction – Prices Whipsaw as a Storm Enters the Caribbean

Natural gas prices whipsawed on Monday, making a lower low before rebounding sharply to close up on the trading session. Prices remain buoyed as the weather is expected to be much colder than normal through the plains and the mid-west while warmer than normal throughout most of the East coast of the United States. There is one disturbance moving through the Caribbean that has a 10% chance of becoming a tropical cyclone during the next 48-hours. Tropical storm Epsilon is expected to move toward the east coast of the US but is not likely to impact any natural gas infrastructure. Hedge funds added to long positions in futures and options according to the latest commitment of traders report.

Technical Analysis

Natural gas prices whipsawed and close higher on the session. Prices recaptured resistance which is now short-term support near the 50-day moving average at 2.76. Additional support is seen near the 10-day moving average at 2.72. Resistance is seen near the October highs at 2.95. The 10-day moving average is fast approaching the 50-day moving average and a crossover appears imminent. This would show that a medium-term uptrend is in place. Medium-term momentum is positive as the MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Hedge Funds add to Long Positions in Futures and Options

Managed money added to long positions and reduced short position in futures and options according to the latest commitment of traders report released for the date ending October 13, 2020. Managed money added 9K contracts to long position in futures and options while reducing short positions by 3K contracts. Hedge funds that are long futures and options outnumber short position in futures and options by 2.5 to one.

Gold Price Prediction – Prices Edge Higher on Strong Homebuilder Index

Gold prices continued to consolidate and attempted to move higher as the dollar declined. US yields moved higher which weighed on gold prices following a stronger than expected US Homebuilder Index. Concerns over the US general election and a surge in coronavirus cases in the UK have helped buoy the yellow metal. Gold volatility has eased and is currently trading near the lowest levels seen since the pandemic started to spread in February. Currently, gold “at the money” implied volatility is trading just shy of 21%.

Trade gold with FXTM

[fx-broker slug=fxtm]

Technical analysis

Gold prices edged higher trading sideways and making little headway. Prices remain above short term support is seen near the 10-day moving average at 1,902. Resistance is seen near the 50-day moving average at 1,924. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal on the upper end of the neutral range. Medium-term momentum remains neutral as the MACD histogram prints in the black with an upward sloping trajectory that points to a slow trend higher.

Home Building Index Surges

Homebuilders continue to see expanding demand and are struggling to keep up with housing starts. The Homebuilder sentiment set a record high for the second month in a row, jumping to 85 in October on the NAHB/Wells Fargo Housing Market Index. September and October are the first two months the index has ever been above 80. This is a diffusion index with levels above 50 showing an expansion. The index stood at 71 in October 2019. All three components of the index either set records or matched their highest readings. The current sales conditions rose 2 points to 90. Sales expectations in the next six months increased 3 points to 88, and buyer traffic was unchanged at 74.

USD/CAD Daily Forecast – U.S. Dollar Is Under Pressure At The Start Of The Week

USD/CAD Video 19.10.20.

Canadian Dollar Gains Ground On Strong Oil And U.S. Stimulus Hopes

USD/CAD is under pressure as the U.S. dollar is losing ground against a broad basket of currencies while WTI oil is trying to settle above the $41 level despite worries about the second wave of coronavirus in Europe.

The U.S. Dollar Index has managed to settle below 93.50 and tries to gain additional downside momentum on hopes for a new coronavirus aid package in the U.S.

According to recent reports, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin will resume negotiations today. Nancy Pelosi has previously set a deadline of October 20 for a vote in case Republicans and Democrats want to pass the new aid bill before the election.

Today, Canada reported that Wholesale Sales increased by 0.3% month-over-month in August. The report was fully in line with the analyst consensus.

This week, USD/CAD traders will have a chance to evaluate the latest inflation data from Canada which will be published on Wednesday. Inflation Rate is expected to grow by 0.4% year-over-year in September while Core Inflation Rate is projected to increase by 0.7%.

On Thursday, the Bank of Canada will announce its Interest Rate Decision and present its Monetary Policy Report. The rate is expected to stay unchanged at 0.25% so traders will focus on the Bank’s commentary about its plans to support the economy.

Technical Analysis

usd cad october 19 2020

USD to CAD managed to settle below the support at 1.3200 and developed material downside momentum. The nearest support level for USD to CAD is located at 1.3135.

In case USD to CAD moves below this level, it will head towards the next support level at October lows at 1.3100. A move below 1.3100 will open the way to the test of the support at 1.3050.

On the upside, the previous support at 1.3200 will likely serve as the first resistance level for USD to CAD. The 20 EMA is located in the nearby so this resistance level is set to be strong.

If USD to CAD settles above the resistance at 1.3200, it will gain upside momentum and move towards the next resistance at the 50 EMA at 1.3240.

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

S&P 500 Price Forecast – Continue to Face Headwinds at 3500

The S&P 500 did rally a bit during the trading session on Monday, reaching towards the 3500 level. That is a large, round, psychologically significant figure that will attract a certain amount of attention, and it has caused a bit of a reaction every time we approach it. Furthermore, it is worth noting that the Thursday candlestick was a hammer, the Friday candlestick was a shooting star, and now the Monday candlestick is looking very much like one that is showing resistance as well. Because of this, the technical analysis looks like we are certainly looking at a range as well.

S&P 500 Video 20.10.20

This setup a nice trade for those of you looking towards short-term charts, as we can go back and forth and show opportunities in both directions. Although one could make an argument that we have just formed a “double top”, I think that is probably jumping the gun. I would anticipate that there is a lot of support below at the 3400 level, and it is likely that we would find the 50 day EMA reaching towards that area by the time we get there. All things being equal, we are still very much in an uptrend, so that is something worth paying attention to.

At this point, the market is focusing on the idea of whether or not we get some type of stimulus, and of course the value of the US dollar. If the US dollar continues to strengthen, then it is very likely that will continue to weigh upon the stock market.

Silver Price Forecast – Silver Open Up the Week With Bullish Pressure

Silver markets have rallied a bit during the trading session on Monday, breaking above the 50 day EMA. Ultimately, this is a market that is trying to figure out where to go next, so having said that it is a scenario where we are probably going to continue to see buyers on dips. However, keep in mind that silver is highly sensitive to the trajectory of the US dollar, and therefore it is worth paying attention to the US Dollar Index if you are going to trade silver. As a general, and certainly over the last 90 days, we have seen a bit of a negative correlation. Having said that, if the US dollar is starting to strengthen, that probably works against silver insensate to lower levels.

SILVER Video 20.10.20

The $24 level should offer minor support, and most clearly the $22 level well. The 200 day EMA is sitting just above the $21 level, and of course the $20 level is psychologically and structurally important from previous trading. Because of this, I am not necessarily looking to short silver, but I do recognize that there is still a significant amount of headwinds out there that could come into play.

Given enough time, you also have to question whether or not we are going to see industrial demand as well, because the market also have to pay attention to whether or not there is going to be industrial usage, which is a major influence on what happens next with silver. While it is a precious metal, it play second fiddle to the gold market in that aspect.

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

Crude Oil Price Forecast – Crude Oil Continue to Put Traders to Sleep

WTI Crude Oil

The West Texas Intermediate Crude Oil market has done almost nothing during the trading session as we continue to dance around the same area that we have been in previously. The 200 day EMA sits just above, just as the 50 day EMA sits just below. Ultimately, this is a market that cannot seem to get its direction together, and therefore we simply go back and forth. There are concerns about demand, which of course is going to be an issue if we are going to have multiple economies around the world starting to slow down or even locked down. On the other hand, we also have an oversupply issue. The one thing that may send this market higher is the idea of stimulus.

Crude Oil Video 20.10.20

Brent

The Brent market also is going back and forth around a very tight range, as the 50 day EMA is currently sitting right at the $43 area. Ultimately, this is a market that also need to see some type of stimulus coming out of the United States in order for the rest of the world to suddenly jump in the idea of more demand for crude oil. If we do break higher, the 200 day EMA sitting just below the $45 level is going to be a major issue. Signs of exhaustion will be sold into, and that is from what I see the best trade available right now. To the downside, the $42 level is somewhat supportive, and most certainly the $40 level will be. We are essentially stuck in some type of tight range.

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

Oil Gains Ground Despite Worries About Second Wave In Europe

Oil Video 19.10.20.

Oil Ignores New Restrictions In Europe

While many European countries have introduced various virus-related restrictions, most of them have avoided serious lockdowns. Wales, which is part of the UK, was the first one to announce a new lockdown in order to contain the second wave of the virus.

The lockdown will begin on Friday and last for two weeks. During this period, most citizens will work from home while all-non essential businesses will have to close.

Such lockdowns deal significant damage to oil demand but oil traders have managed to shrug off demand worries and continued to provide support to oil near the $40 level.

Perhaps, traders are betting that OPEC+ will keep current production cuts for some more months instead of increasing production levels by 2 million barrels per day (bpd) from January 2021.

Recent reports indicate that OPEC+ countries are worried about the current pace of oil demand recovery. OPEC+ cannot afford another collapse of oil prices because it will signal that it has lost control of the oil market.

In this light, OPEC+ members may be eager to suffer from lower production levels for a few additional months in order to show that OPEC+ is still the leading player in the market.

Libya’s Oil Production Increases To 500,000 Bpd

According to a recent Bloomberg report, Libya managed to restart its biggest oil field, Sharara, and increased its total production to 500,000 bpd. The increase of Libya’s production is another headache for OPEC+ since Libya is exempt from the production cut deal due to the civil war.

Sharara’s production capacity is about 300,000 bpd but current production is near 110,000 bpd. Thus, the field has plenty of room to increase production even if we take into account the potential damage done by the civil war. The continued increase in Libya’s oil production is certainly a negative catalyst for the oil market.

In addition to Libya, oil traders will pay attention to U.S. oil production as the recent Baker Hughes Rig Count report indicated that the number of U.S. rigs drilling for oil increased by 12 to 205.

Most likely, the upcoming EIA Weekly Petroleum Status report will indicate an increase in U.S. domestic oil production. If this increase is not met with higher demand, crude inventories will increase and put pressure on oil prices. Tomorrow, traders will have a chance to take a look at the latest inventory data since API Crude Oil Stock Change report will be released.

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

Natural Gas Price Forecast – Natural Gas Markets Continue Choppiness

Natural gas markets have rallied a bit during the trading session after initially gapping lower on Monday, showing signs of confusion in choppiness yet again. The $2.65 level has offered a short-term support level, while the $2.80 level above is significant resistance. I think that given enough time we are probably going to see a lot of noisy behavior in this general vicinity, with the $3.00 level above offering a massive amount of resistance. Because of this, it is very likely that we continue to see a lot of back and forth, but it does appear that the upward trend continues. With that being the case, I do not have any interest in trying to get too cute with this trade, I simply want to buy it on short-term dips.

NATGAS Video 20.10.20

The 50 day EMA underneath will of course attract a certain amount of attention, especially as the indicator has been relatively reliable in the recent uptrend. If we can break above the 3.00$ level, then it is likely that the market can continue to go much higher. I do think that it does, as we are heading into a colder time of year for the northern hemisphere.

Furthermore, we have had a significant amount of bankruptcies in the United States, so that has taken some of the supply out of the market. Nonetheless, this is a cyclical time of year for natural gas the typically go higher, so that is something to keep in the back of your mind.

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

Gold Price Forecast – Gold Markets Give Back Early Gains

Gold markets rallied a bit during the trading session on Monday, breaking above the 50 day EMA quite decisively, but gave back those early gains to form a less than impressive candlestick. This suggests that gold still has further to go to the downside and quite frankly if the US dollar strengthens, that will be the main reason. While we have seen this market drift lower over time, I do not necessarily think that gold is something that you should be selling, because quite frankly there is a lot of risk out there and that is of the way gold works.

Gold Price Predictions Video 20.10.20

To the downside, the $1850 level is an area where we could be seen a certain amount of support in the future, and it does make a decent target if you were in fact to short the gold market. However, I do not think that shorting is the best way to go as the longer-term fundamental certainly do look like they are going to be good for gold. Below the $1850 level, we have the massively important $1800 level which has previously been the scene of a major breakout, and it is more than likely going to be an area where we see a bit of “market memory” come back into play.

Beyond that as well, we have the 200 day EMA which is approaching that level. It is because of this that I think somewhere between $1800 and $1850 we will find the buyers return into this market to continue the longer-term uptrend. I do not like trading against the overall trend, so I am perfectly content to simply look for value in gold and take advantage of it slowly, building up a bigger position as the market extends gains.

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

Dollar Comes Back to the Bearish Territory

Nasdaq is still below dynamic and horizontal resistance

SP500 is on a good way to break crucial levels and go higher

DAX sharply bounces from the 12960 points

Dollar Index ignores the inverse head and shoulders and creates a flag. Situation here is bearish

EURUSD are flirting with important dynamic resistance

GBPUSD are one step from breaking 1,3 – the most important level in the past few weeks

AUDUSD with a small bullish correction but the main sentiment is very negative

EURAUD makes another attempt to escape from the long-term rectangle

EURCHF breaks crucial support and later tests it as a resistance. Pretty standard price action move

Gold tries to go higher but the upper line of the pennant looks well defended

Silver Price Daily Forecast – Silver Starts The Week On A Strong Note

Silver Video 19.10.20.

Silver Attempts To Gain More Momentum Above The 50 EMA

Silver has managed to get above the resistance at the 50 EMA at $24.55 and is trying to gain additional upside momentum as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index declined below 93.50 and is heading towards the nearest support level at 93.00 on hopes for a new coronavirus aid package deal. If the U.S. Dollar Index gets to the test of the 93 level, silver will get more support. Weaker dollar is bullish for silver as it makes it cheaper for buyers who have other currencies.

Meanwhile, gold is trying to settle above its 50 EMA at $1905. At this point, gold failed to develop material upside momentum but maintains solid chances to continue its upside move. If gold gets to the test of the next resistance at $1930, silver and other precious metals will get additional support.

Gold/silver ratio declined below the support at the 20 EMA at 77.95 which is bullish for silver. The next support level for gold/silver ratio is located at the recent lows near 75.50. A move towards this level will be a bullish development for silver.

Technical Analysis

silver october 19 2020

Silver is currently trying to get more momentum above the support at the 50 EMA at $24.55. If this attempt is successful, silver will head towards the next resistance level at the recent highs at $25.55.

Along the way, silver may face some resistance near the highs of today’s trading session at $25.00. If silver moves above the resistance at $25.55, it will quickly get to the test of the next resistance level at $25.85.

On the support side, the nearest support level for silver is located at $23.90. A move below this level will open the way to the test of the next support at $23.30.

From a big picture point of view, silver managed to get sufficient support near $24.00 and continues its upside move. If the U.S. dollar remains weak, silver will have good chances to get above the recent highs at $25.55.

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

USD/JPY Price Forecast – US Dollar Continues to Show Exhaustion

The US dollar initially tried to rally during the trading session on Monday but gave back the gains as we continue to see a pressing lower. In fact, it is very likely that the market is trying to build up enough pressure to finally break down below the ¥105 level. That being said, the market is likely to see noisy trading more than anything else, but we are in a downtrend, and therefore I have no interest in trying to buy this pair.

USD/JPY Video 20.10.20

When you look at the pair, the Japanese yen has been strengthening over time, but it is a very choppy and slow move. This is because both of these are considered to be safety currencies, but ultimately the market is likely to go looking towards the ¥104 level underneath, which has been the recent bounce. Ultimately, I do think that we go through there and go looking towards the ¥102 level. The market may take some time to make that move, but ultimately, we are clearly forcing ourselves lower.

The Japanese bond markets are paying more of a return than the US bond markets, and what looks to be like an alternate reality for anybody who has been in the Forex game for more than about 20 minutes. With this, we continue to see downward pressure on the US dollar due to the massive amount of stimulus that people are expecting in America as well.

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

GBP/USD Price Forecast -British Pound Testing Major Figure

British pound traders started buying again at the beginning of the week on Monday, reaching towards the 1.30 level. Ultimately, the market continues to pay attention to this round figure in order to get some type of guidance. Quite frankly, with Brexit out there still causing headaches for a lot of traders, I believe that this is a market that will remain very volatile. The 1.31 level above is going to be the top of the overall range, but clearly the 1.30 level has been an area that has attracted a lot of attention.

GBP/USD Video 20.10.20

To the downside I see the 1.29 level offering a little bit of support, as well as even more support down at the 1.2750 level. That being said, the 200 day EMA is near there as well so that could cause a bit of support as well. Ultimately, I think that the market is going to continue to chop back and forth as we see a lot of noise. I do believe that the British pound has very serious risk out there when it comes to the idea of Brexit going right or wrong, and of course the US dollar looks to be making an argument to stabilize.

At this point, I do think that we are more likely to pull back then go higher, but quite frankly the real move will come later once we finally get some type of resolution to whether or not there is going to be a deal when it comes to Brexit. In the meantime, expect the latest headline or rumor to move the market back and forth as we continue to see volatility pick up.

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

GBP/JPY Price Forecast – British Pound Rallies Towards Familiar Level

The British pound rallied significantly during the trading session on Monday to kick off the week, as we continue to see a lot of noise in this general vicinity. The 50 day EMA and the 200 day EMA both have come into the picture to show significant resistance in of course a bit of hesitation as the moving averages are both very flat. The size of the candlestick is of course relatively bullish as well, but ultimately, we are in an area of congestion and that should be paid close attention to.

GBP/JPY Video 20.10.20

The pair is of course very risk sensitive so that is something worth paying attention to as the risk appetite of traders around the world will continue to see things a bit different. Looking at this chart, it is easy to see that we have been in a bit of a range for a while so having said that this is likely to be a scenario where we have a lot of back and forth going forward, because quite frankly there are far too many things out there that could cause major issues in the short term. With this, expect “The Dragon” to be very noisy.

Unfortunately, we have to worry about Brexit and the occasional headline that is going to be coming out, which of course will throw a bit of a wrench into the works at times, but in the end this is a pair that I think is going to continue to bounce around between ¥138 above and ¥135 below until something more substantial happens.

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

EUR/USD Price Forecast – Euro Kicks Off the Week to the Upside

The Euro rallied significantly during the trading session on Monday, reaching towards the 1.18 level. This of course is a large, round, psychologically significant figure, and should be paid attention to for that reason. Furthermore, the uptrend line above should offer resistance, while the 1.17 level underneath offers plenty of support. At this point, the market looks very likely to continue chopping around and going sideways in general.

EUR/USD Video 20.10.20

The 50 day EMA is sitting underneath, sitting just above the 1.17 handle, so that of course is something that people will pay attention to. If we can break above the uptrend line that we had broken through, then we could go looking towards the 1.1850 level, and then the 1.19 level. There is a ton of resistance above, so I think that any rally at this point is probably going to be sold into. Having said that, we have recently made what could be thought of as a “higher low”, but I think it is up bit premature to call it that yet. After all, there are a lot of concerns out there that could drive money into the US dollar, so it is most certainly worth keeping that in the back of their mind. If we do break down below the 1.17 handle, then we could go down to the 1.16 level, and then possibly down to the 1.15 handle after that.

This pair is somewhat sensitive to risk appetite, so if something ugly happens, it will certainly sell this market. Furthermore, the European Union has to worry about the possibility of lockdowns and a continuation of plenty of new coronavirus infections that are rapidly increasing.

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

AUD/USD Price Forecast – Australian Dollar Continues Sideways Chop

The Australian dollar has rallied a bit during the trading session on Monday to break above the 0.71 handle. That being said, there is still a lot of resistance above, and it could continue to cause some issues. Furthermore, the 50 day EMA is sitting above as well, and a certain amount of attention will be paid to that indicator as per usual. Ultimately, this is a market that has recently broken an uptrend line, and now we are going to pay attention to the Aussie going forward as far as any potential weakness.

AUD/USD Video 20.10.20

Further exacerbating the situation has been the fact that the Reserve Bank of Australia has recently hinted very strongly that there were interest rate cuts coming down the road. If that is going to be the case, then it should work against the value of the Aussie in general. Underneath, there is significant interest and support right around the 0.70 level, as well as the 200 day EMA racing towards that figure. Ultimately, if we were to break through all of that then it would almost certainly bring in a significant break down in this pair, perhaps sending it down to the 0.68 level and beyond.

Looking at this chart, I believe that we are probably going to see a lot of back and forth type of trading, at least in the short term as we try to figure out where to go next. Keep in mind that this is also a very risk sensitive currency pair, so depending on what is going on in the world, there may or may not be a drive towards the US dollar.

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

Anticipation Builds Ahead Of Microsoft Earnings

Dow component Microsoft Corp. (MSFT) reports fiscal Q1 2021 earnings on Oct. 27, with analysts expecting a profit of $1.36 per-share on $35.8 billion in revenue. The stock sold off more than 6% after the Q4 release in July, despite beating top and bottom line estimates. Market watchers blamed the sell-the-news reaction on overly-high expectations for the cloud and commercial products divisions. The stock recovered those losses into August and posted an all-time high in early September.

Microsoft And TikTok

Buying pressure resumed after Mr. Softee threw its hat into the ring in the TikTok drama, seeking to acquire the company while jumping through political hoops in China and the United States. Oracle Inc. (ORCL) eventually won the coveted prize but continued conflict between nations suggests that Microsoft was lucky to walk away empty-handed and redirect attention to core services and the Nov. 10 release of the next-generation Xbox console.

Morgan Stanley analyst Keith Weiss discussed the revenue boost expected from the Xbox release earlier this month, stating, “The fiscal year 2021 console cycle and the addition of Bethesda highlight incremental growth opportunities for Microsoft’s gaming franchise, w/ a potential ~$80 billion value for the gaming subscription biz alone. Our bottom up work suggests the console cycle should not derail a broader margin expansion story. Overweight.”

Wall Street And Technical Outlook

Wall Street has been bullish on the big tech powerhouse for years, with a current ‘Moderate Buy’ consensus based upon 23 ‘Buy’ and 3 ‘Hold’ recommendations. No analysts are recommending that shareholders close positions and move to the sidelines at this time. Price targets currently range from a low of $208 to a Street-high $260 while the stock is set to open Monday’s U.S. session about $16 below the median target. There’s plenty of potential upside after a strong strong quarterly report, given this humble placement.

Microsoft broke out above the first quarter high at 190.65 in June and added more than 40 points into the September peak. It then sold off with broad benchmarks, testing the 50-day moving average for more than 5 weeks before surging off a small base earlier this month. Accumulation readings are hovering near new highs, supporting continued upside, but monthly cycles are flashing overbought technical readings. This conflict suggests two-sided action through most or all of the fourth quarter.

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

EUR/USD Mid-Session Technical Analysis for October 19, 2020

The Euro is trading sharply higher after posting a rapid turnaround following a flat overnight session. Traders are keying off of a weaker dollar, which is losing ground on renewed stimulus talks. Investors are also focusing on the looming U.S. election and worries over rising coronavirus cases.

Continued talks over the weekend between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi have yet to see any concrete details, but Pelosi has set Tuesday as a deadline for progress and any deal would likely be around $2 trillion figure, so the greenback is under pressure from the debt and spending dynamic.

At 12:33 GMT, the EUR/USD is trading 1.1782, up 0.0066 or +0.56%.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1831 will change the main trend to up. A move through 1.1612 will reaffirm the downtrend.

The minor trend is also down. A move through 1.1688 will signal a resumption of the minor downtrend.

The short-term range is 1.2011 to 1.1612. Its retracement zone at 1.1811 to 1.1859 is the primary upside target.

The main support is the retracement zone at 1.1691 to 1.1616. The upper level essentially stopped the selling last Thursday at 1.1688.

Daily Swing Chart Technical Forecast

The current upside momentum looks strong enough to lead to a test of the short-term 50% level at 1.1811. Overtaking this level could trigger a change in trend over 1.1831, followed by the Fibonacci level at 1.1859.

On the downside, the strongest support is 1.1691 to 1.1688.

The new minor range is 1.1831 to 1.1688. Its pivot at 1.1760 is controlling the price action. We’re looking for the current upside bias to continue as long as the EUR/USD remains over the pivot.

The early price action suggests we’re in a headline driven market on Monday. This could lead to heightened volatility.

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