NZD/USD Forex Technical Analysis – Trader Reaction to .6791 Sets the Tone

The New Zealand Dollar is trading higher on Friday amid renewed concerns over the strength of the U.S. economy. Traders are also shrugging off yesterday’s data that showed New Zealand suffered its worst economic slump since the Great Depression in the second quarter as a strict nationwide lockdown to combat the coronavirus brought the country to a standstill.

At 06:38 GMT, the NZD/USD is trading .6795, up 0.0040 or +0.59%.

The Kiwi is also being supported by a weaker U.S. Dollar two days after the Federal Reserve pledged to keep interest rates low for a prolonged period to lift the world’s biggest economy out of a pandemic-induced recession.

Concerns around a stalling recovery are being driven by the Labor Department’s report from Thursday that showed the number of Americans filing new claims for unemployment benefits fell last week, but remained perched at extremely high levels.

Traders have also become concerned that the Fed is out of ammunition. Furthermore, some think the Fed’s message this week indicates major concerns about the economy.

Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was confirmed earlier today when buyers took out the September 2 main top at .6789. The new main bottom is .6601. A trade through this bottom will change the main trend to down.

The minor trend is also up. The new minor bottom is .6675. Taking out this level will change the minor trend to down and shift momentum to the downside.

Short-Term Outlook

The NZD/USD is up seven sessions from its last main bottom. This puts the Forex pair inside the window of time for a potentially bearish closing price reversal top. Therefore, our focus will be on yesterday’s close at .6755.

Bullish Scenario

A sustained move over .6755 will indicate the presence of buyers. Taking out the July 19, 2019 main top at .6791 will indicate the buying is getting stronger. This could lead to an extended rally with the March 21, 2019 main top at .6939 the next major upside target.

Bearish Scenario

A sustained move under .6755 will put the NZD/USD in a position to post a closing price reversal top. This won’t change the trend to down, but if confirmed, it could lead to a 2 to 3 day correction.

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

GBP/USD Daily Forecast – Resistance At 1.3000 In Sight

GBP/USD Video 18.09.20.

British Pound Tries To Gain Additional Upside Momentum

GBP/USD continues its attempts to get above the nearest resistance level at the 50 EMA at 1.3000. The British pound is supported by a Financial Times report which stated that European Commision President Ursula Von der Leyen said that the trade deal with Britain was still possible.

A messy Brexit is the main threat for the pound right now so any positive news on this front provide support to the British currency.

Yesterday, the Bank of England announced its Interest Rate Decision. There were no major surprises as the bank kept the rate at 0.1% and also maintained its quantitative easing program at 745 billion pounds.

UK has just reported Retail Sales data for August. On a month-over-month basis, Retail Sales increased by 0.8% compared to analyst consensus which called for growth of 0.7%. On a year-over-year basis, Retail Sales grew by 2.8%.

The Retail Sales data highlighted the continued rebound of UK consumer activity which may provide additional support to GBP/USD.

GBP/USD will continue to be very sensitive to Brexit news over the next weeks but traders should also keep an eye on economic data from both U.S. and UK as markets start to worry that the economic recovery may be slowing down.

Technical Analysis

gbp usd september 18 2020

GBP/USD is currently trying to settle above the nearest resistance level at the 50 EMA at 1.3000.

If this attempt is successful, GBP/USD will head towards the next resistance level at the 20 EMA at 1.3020. A move above the 20 EMA will signal that GBP/USD is ready to return to its previous upside trend so GBP/USD will likely gain significant upside momentum.

In this case, it will head towards the next major resistance level at 1.3110.

On the support side, the nearest support for GBP/USD is located at 1.2925. If GBP/USD manages to settle below this support level, it will decline towards the next support at 1.2880.

A move below the support at 1.2880 will open the way to the test of the next support at 1.2815. I’d note that GBP/USD may quickly move between the support levels since recent trading action indicated that there were no strong levels between 1.2750 and 1.3000.

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

USD/JPY Forex Technical Analysis – 104.189 Potential Trigger Point for Acceleration to Downside

The Dollar/Yen is trading steady in early Asia trading on Friday after falling sharply overnight as downbeat U.S. data cast a shadow over the economic outlook.

A stream of U.S. data showed jobless claims remained elevated at 860,000, while both housing starts and the Philadelphia Fed business index fell. The Fed this week said it expected the U.S. economy to shrink by far less than previously forecast in 2020 and promised to keep rates ultra-low for a prolonged period.

At 05:47 GMT, the USD/JPY is trading 104.796, down 0.067 or +0.06%.

Weaker demand for U.S. equities also increased the Japanese Yen’s appeal as a safe-haven asset.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 104.525 will continue the downtrend.

A trade through 107.049 will change the main trend to up. This is highly unlikely, but due to the prolonged move in terms of price and time, the USD/JPY is vulnerable to a potentially bullish closing price reversal bottom.

The short-term range 104.189 to 107.049. Its 50% level at 105.624 is resistance.

Short-Term Outlook

The next major downside target is the July 31 main bottom at 104.189. Although Japanese officials aren’t happy with this week’s rapid rise in the Japanese Yen, they may not be able to stop the rally this time with the threat of intervention because this current move is being driven by uncertainty over the Fed’s ability to find new ways to stimulate the U.S. economy.

Although the Federal Reserve and the Bank of Japan say they are ready to ease more if needed, markets are beginning to doubt whether either of them has much scope left beyond monetizing debt. Meanwhile the Fed’s shift to near-zero rates this year gutted the dollar’s Treasury-JGB yield spread advantage while global uncertainty continues to drive investors into the safe-haven Japanese.

The longer-term charts indicate that a failure to hold 104.189 could lead to an eventual break into the 102.00 to 101.00 area.

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

EOS, Ethereum and Ripple’s XRP – Daily Tech Analysis – September 18th, 2020

EOS

EOS rose by 0.96% on Thursday. Following on from a 0.30% gain on Wednesday, EOS ended the day at $2.7384.

It was a particularly bullish start to the day. EOS rallied to an early morning intraday high $2.7770 before hitting reverse.

Falling short of the first major resistance level at $2.7868, EOS fell to a late morning intraday low $2.6918

Steering clear of the first major support level at $2.6071, EOS recovered to a late high $2.7621 before easing back.

At the time of writing, EOS was up by 0.16% to $2.7428. A mixed start to the day saw EOS fall to an early morning low $2.7368 before rising to a high $2.7466.

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

EOS/USD 18/09/20 Hourly Chart

For the day ahead

EOS would need to avoid a fall through the $2.7357 pivot level to support a run at the first major resistance level at $2.7797.

Support from the broader market would be needed, however, for EOS to break out from Thursday’s high $2.7770.

Barring an extended crypto rally, the first major resistance level and resistance at $2.80 would likely cap any upside.

Failure to avoid a fall through the pivot level at $2.7357 would bring the first major support level at $2.6945 into play.

Barring an extended sell-off, however, EOS should continue to steer clear of sub-$2.60 levels. The second major support level at $2.6505 should limit any downside.

Looking at the Technical Indicators

First Major Support Level: $2.6945

Pivot Level: $2.7357

First Major resistance Level: $2.7797

23.6% FIB Retracement Level: $6.52

38% FIB Retracement Level: $9.68

62% FIB Retracement Level: $14.77

Ethereum

Ethereum rallied by 6.63% on Thursday. Following on from a 0.32% gain on Wednesday, Ethereum ended the day at $389.45.

Bullish for the day, Ethereum rallied from an early morning intraday low $363.40 to a late intraday high $394.55.

Ethereum broke through the first major resistance level at $374.07 and the second major resistance level at $382.90.

On the day, Ethereum also broke through the 38.2% FIB of $367 to visit $390 levels for the 1st time since Sunday.

A late pullback left Ethereum at sub-$390 at the day end, however.

At the time of writing, Ethereum was up by 0.67% to $392.06. A mixed start to the day saw Ethereum fall to an early morning low $389.07 before rising to a high $392.69.

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

ETH/USD 18/09/20 Hourly Chart

For the day ahead

Ethereum would need to avoid a fall through the $382.47 pivot to support a run at the first major resistance level at $401.53.

Support from the broader market would be needed, however, for Ethereum to break out from Thursday’s high $394.55.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

Failure to avoid a fall through the $382.47 pivot would bring the first major support level at $370.38 into play.

Barring an extended sell-off, however, Ethereum should steer well clear of sub-$350 levels. The 38.2% FIB and the second major support level at $351.32 should limit any downside.

Looking at the Technical Indicators

First Major Support Level: $370.38

Pivot Level: $382.47

First Major Resistance Level: $401.53

23.6% FIB Retracement Level: $257

38.2% FIB Retracement Level: $367

62% FIB Retracement Level: $543

Ripple’s XRP

Ripple’s XRP rose by 2.07% on Thursday. Following on from a 1.66% gain on Wednesday, Ripple’s XRP ended the day at $0.25222.

It was a particularly bullish start to the day. Ripple’s XRP rallied to an early morning intraday high $0.25849 before hitting reverse.

Ripple’s XRP broke through the first major resistance level at $0.2538 before sliding back to a late morning intraday low $0.24613.

Steering clear of the first major support level at $0.2372, however, Ripple’s XRP bounced back to a late high $0.25531.

Ripple’s XRP broke back through the first major resistance level at $0.2538 before easing back to sub-$0.2530 levels.

At the time of writing, Ripple’s XRP was up by 0.54% to $0.25359. A bullish start to the day saw Ripple’s XRP rise from an early morning low $0.25205 to a high $0.25367.

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

XRP/USD 18/09/20 Hourly Chart

For the day ahead

Ripple’s XRP will need to avoid a fall through the $0.2523 pivot to support a run at the first major resistance level at $0.2584.

Support from the broader market would be needed, however, for Ripple’s XRP to break back through to $0.2580 levels.

Barring an extended crypto rally, the first major resistance level and resistance at $0.26 would likely limit any upside.

Failure to avoid a fall through the $0.2523 pivot would bring the first major support level at $0.2461 into play.

Barring an extended crypto sell-off, Ripple’s XRP should steer clear of sub $0.24 levels. The second major support level sits at $0.2399.

Looking at the Technical Indicators

First Major Support Level: $0.2461

Pivot Level: $0.2523

First Major Resistance Level: $0.2584

23.6% FIB Retracement Level: $0.3638

38.2% FIB Retracement Level: $0.4800

62% FIB Retracement Level: $0.6678

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

Thanks, Bob

US Stock Market Overview – Stock Drop Led Down by Real Estate; Materials Buck the Trend

US stocks moved lower on Thursday as the Fed’s commentary on Wednesday failed to lift equities higher. Most sectors in the S&P 500 index were lower, led down by real estate shares, materials bucked the trend. The VIX volatility index popped 5.5% climbing back above 27. The dollar whipsawed but eventually moved lower while US yields remained stable. US jobless claims rose less than expected while continuing claims fell below 13-million. US Housing starts rose less than expected but continue to be impressive.

Jobless Claims Rise Less than Expected

US Jobless claims rose by 860,000 for the week ended September 12, according to the Labor Department.  Expectations were for new claims to rise by 875,000, against the previous week’s upwardly revised 893,000. Continuing claims, which fell 916,000 to 12.63 million, compared with the 13 million expected. The four-week moving average for continuing claims dropped by 532,750 to 13.5 million. Continuing claims peaked at 24.9 million in early May.

Housing Start Rise Less than Expected

US Housing starts dropped 5.1% to an annual rate of 1.416 million units last month, according to the Commerce Department. Data for July was revised slightly lower to a 1.492 million-unit pace from the previously reported 1.496 million. Expectations had been for a rate of 1.478 million units. Starts were pulled down by a  22.7% tumble in the multi-family housing segment to a pace of 395,000 units. But construction of single-family housing units, which accounts for the largest share of the housing market, increased 4.1% to a rate of 1.021 million units.

TikTok Deal Continues to Evolve

Oracle Corp. continues to work to create a deal where the company would create a new U.S. company for the video-sharing app alleviating U.S. concerns over Chinese control. Under the latest iteration of a fluid deal, Oracle and Walmart Inc. could together own a significant stake. This comes despite Walmart initially planning to join with Microsoft.Walmart Chief Executive Doug McMillon is expected to get a board seat if the deal goes through.

Natural Gas Price Prediction – Prices Tumbled on a Larger than Expected Build in Stockpiles

Natural gas prices were hammered on Thursday following a larger than expected build in natural gas inventories according to a report released by the US Department of Energy. Prices dropped more than 10% but settled above support. Storm in the Gulf of Mexico continues to be active with a disturbance that has a 90% chance of turning into a tropical cyclone in the next 48-hours. There is an active storm in the Atlantic as well but only one looks like it will make it over to the Gulf of Mexico and potentially generate issues for natural gas infrastructure.

Technical Analysis

Natural gas prices dropped sharply but held in above support near an upward sloping trend line that comes in near 1.97. Resistance is seen near the 50-day moving average at 2.25. Short term momentum is negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 6, below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum is also negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices.

Inventories Rise More than Expected

The EIA reported that natural gas in storage was 3,614 Bcf as of Friday, September 11, 2020. This represents a net increase of 89 Bcf from the previous week. Expectations were for a 78 BCF increase according to survey provider Estimize. Stocks were 535 Bcf higher than last year at this time and 421 Bcf above the five-year average of 3,193 Bcf. At 3,614 Bcf, total working gas is above the five-year historical range.

Gold Price Prediction – Prices Slip but Hold Support

Gold prices moved lower as the dollar whipsawed as investors shunned the Fed’s decision to keep interest rates unchanged. The Fed said that they planned to keep interested rates near zero for the next 3-years which should help buoy the yellow metal.

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Technical analysis

Gold prices moved lower unable to gain momentum bouncing at support near the 50-day moving average at 1,932. Prices pushed back through short term support is seen near the 10-day moving average near 1,944. Target resistance is seen near the September highs at 1,979. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The relative strength index is moving sideways to higher which is a sign of accelerating positive momentum.

Jobless Claims Rise Less than Expected

US Jobless claims rose by 860,000 for the week ended September 12, according to the Labor Department.  Expectations were for new claims to rise by 875,000, against the previous week’s upwardly revised 893,000. Continuing claims, which fell 916,000 to 12.63 million, compared with the 13 million expected. The four-week moving average for continuing claims dropped by 532,750 to 13.5 million. Continuing claims peaked at 24.9 million in early May.

Gold Price Futures (GC) Technical Analysis – Getting Chopped by Series of Retracement Levels

Gold futures are trading lower on Thursday, but clawing back from its lows as the U.S. Dollar gives back earlier gains. Gold was pressured earlier in the session after yesterday’s Fed announcements disappointed expectations for further stimulus to spur inflation and support the economy, devastated by the COVID-19 pandemic.

At 15:25 GMT, December Comex gold is trading $1955.00, down $15.50 or -0.79%.

Despite the weakness, the Fed said nothing that would alter the bullish long-term picture for gold. Central bank policymakers pledged to keep rates pinned near zero levels until inflation was on track to “moderately exceed” its 2% inflation target “for some time”.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $2001.20 will signal a resumption of the uptrend. The main trend changes to down on a trade through $1911.70.

The choppy trade is being caused by a series of retracement levels.

Support is $1947.80 and $1939.20.

Resistance is $1956.70 and $1966.90.

On the upside, the major resistance zone is $1981.70 to $2007.10. This zone stopped rallies on Wednesday at $1983.80 and on September 1 at $2001.20.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December Comex gold market into the close will be determined by trader reaction to the 50% level at $1956.70.

Bullish Scenario

A sustained move over $1956.70 will indicate the presence of buyers. This could lead to a labored rally with potential upside targets layered at $1966.90 and $1981.70. The latter is a potential trigger point for an acceleration to the upside with the next targets $2001.20 and $2007.10.

Bearish Scenario

A sustained move under $1956.70 will signal the presence of sellers. This could trigger a further break into $1947.80 and $1939.20. The latter is a potential trigger point for an acceleration to the downside.

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

SP 500 Price Forecast – Continue to Find Support at Same Level

The S&P 500 has fallen initially during the trading session on Thursday, reaching down towards the 3300 level, and then bouncing rather significantly. At this point, the 50 day EMA is massive support as well, so I think it is very likely that we will continue to see a lot of back-and-forth trading. If we were to break down below the lows of the trading session on Thursday, then it would be very negative, sending this market down to the 3200 level.

S&P 500 Video 18.09.20

We need to see the US dollar start to soften a bit if the S&P 500 is to take off to the upside because of the massive negative correlation that we have had over the last 30 days, measuring -0.95, which is almost a perfect ratio. At this point, I think that we are simply consolidating in trying to figure out what to do next, and therefore it is probably going to continue to see a lot of volatility, but quite frankly I think that is going to be the case at least until the election.

Buying on dips works in theory, but to be honest with you I would like to see the market lead the rectangle on the chart before putting any serious money to work, because there are a multitude of reasons to think that the market could fall apart, not the least of which is the underlying volatility in various asset classes to suggest that perhaps there are a lot of fears out there, something that is not necessarily conducive to a strong S&P 500. Caution is without a doubt the word of the day.

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

USD/CAD Daily Forecast – Resistance At 1.3250 Proves Its Strength

USD/CAD Video 17.09.20.

U.S. Dollar Failed To Maintain Its Upside Momentum

USD/CAD failed to settle above the 50 EMA at 1.3250 and declined towards 1.3200 as the U.S. dollar found itself under pressure against a broad basket of currencies.

Earlier, U.S. Dollar Index made an attempt to settle above the resistance level at 93.50 as traders started to bet on the American currency after the U.S. Fed did not promise additional asset purchases.

However, the U.S. dollar lost steam, and the U.S. Dollar Index declined towards the 20 EMA at 93.10. A move below the 20 EMA will likely lead to increased downside momentum which will be bearish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims decreased to 860,000 while Continuing Jobless Claims declined to 12.6 million. While Continuing Jobless Claims report was better than expected, the general situation in the U.S. job market remains challenging.

Meanwhile, Canada’s ADP Employment Change report showed that private businesses slashed 205,400 jobs in August. This is the best report since the beginning of the crisis but it is clear that Canada’s job market is far from recovery.

At this point, it looks like markets are not sure about the correct interpretation of Fed Chair Powell’s comments which leads to significant volatility of the U.S. dollar.

Technical Analysis

usd cad september 17 2020

USD to CAD faced significant resistance at the 50 EMA at 1.3250 and fell back towards the nearest support level at 1.3200.

If USD to CAD manages to stay above this support level, it will have a chance to get to another test of the 50 EMA level. A move above the 50 EMA will lead to increased upside momentum, and USD to CAD will head towards the next resistance level at 1.3330. RSI is at moderate levels so there is plenty of room to gain more momentum in case the right catalysts emerge.

On the support side, a move below 1.3200 will lead to a test of the next support level at the 20 EMA at 1.3170.

If USD to CAD manages to settle below the 20 EMA, it will gain downside momentum and head towards the next support level at the recent lows at 1.3135.

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

Nike Flying High Ahead Of Earnings

Dow component Nike Inc. (NKE) posted an all-time high at 120.48 earlier this week, with buying pressure driven by the successful launch of the new National Football League season. The sports and apparel giant is highly-dependent on the high visibility gained through televised sports, as evidenced by a sharp revenue decline in the first quarter, when baseball, basketball, soccer, and planning for the 2020 Tokyo Olympics came to a crashing halt.

Nike Buyers Ignoring Mixed Guidance

Nike missed fiscal Q4 2020 top and bottom line estimates by wide margins in June, posting a loss of $0.51 per-share on a crushing 38.0% year-over-year revenue decline. The stock sold off but bottomed out quickly after the news, even though the company guided the next 12 months to breakeven or just above breakeven, which should not justify a breakout to new highs. As a result, it could be risky to hold the stock when it reports Q1 2021 results next week.

Pivotal Research Group analyst Mitch Kummetz raised their price target from $118 to $137 on Thursday, noting “our estimates are well above consensus. We’re modeling a 9% sales decline, which would represent significant sequential improvement from Q4 2020. This expected improvement mostly reflects that COVID had much less impact on this three-month period than the prior three months. That said, Q1 2021 was not without some COVID pressure, namely a disrupted selling season.”

Wall Street And Technical Outlook

Wall Street consensus is wildly bullish, with a ‘Strong Buy’ rating based upon 22 ‘Buy’ and just 3 ‘Hold’ recommendations. One analyst disagrees, and is advising shareholders to sell their positions and move to the sidelines at this time.  Price targets currently range from a low of $95 to a street-high $150 while the stock opened Thursday’s session about $4 below the median $121 target. Higher prices into earnings are possible, given this mid-range placement.

Nike completed a 56-point round trip into the January 2020 high in June and spent the next two months carving the handle of a well-formed cup and handle pattern that broke to the upside in August. The stock has added about 15 points since that time, reaching the 1.272 Fibonacci rally extension. Accumulation readings have matched bullish price action, step-for-step, confirming a healthy breakout that may just need a short breather to shake off overbought technical readings.

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

Silver Price Forecast – Silver Markets Continue to Be Very Volatile

Silver markets fell significantly during the trading session on Thursday but bounced a bit as the US dollar fell from an initial surge higher. That being said, there is a lot of concern out there, and if you are looking to purchase silver as a safety asset, you probably do better with gold as it is much more of a pure play with that. After all, silver has an industrial component built into it as well, so it is likely that if industrial demand slumps, silver may lag a bit behind its cousin. That being said, I have no interest in shorting this market, as the $26 level underneath offers a significant amount of support.

SILVER Video 18.09.20

The 50 day EMA sits just above the $25 level, so that offers quite a bit of interest as well. Ultimately, this is a market that has been in an uptrend for some time, and at the very least we need to chew through a lot of the noise to go higher. At this point, the $28 level is the top of the range that we are trading in, and if we can break above there it is likely we go looking towards the $29 level. If we can break above there, then the $30 level could be a target as well. If and when we break above there, the market is likely to start another leg higher, and therefore would become more “buy-and-hold.” In the meantime, I think that you buy on dips, but you do so very cautiously as the volatility continues to be strong.

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

Crude Oil Price Forecast – Crude Oil Markets Continue Recovering

WTI Crude Oil

The West Texas Intermediate Crude Oil market has rallied a bit during the trading session after initially dropping. The market looks as if it is trying to test the 200 day EMA, so that of course is a very interesting technical indicator to see where we may be going next. I think at this point, you should be on guard for signs of exhaustion, as the recent move lower clearly pointed out that there were cracks in the ice when it came to crude oil markets. That being said, you may see that show itself up on short-term charts more than anything else. I am not willing to start buying yet, so at this point I am still looking for signs of weakness, especially if the US dollar starts to pick up strength.

Crude Oil Video 18.09.20

Brent

Brent markets have also rallied in the same way that the WTI market has. Ultimately, we are testing the 50 day EMA for resistance, but could break above there to go looking towards the 200 day EMA. Recently, we have seen a significant break down here as well, so I think it is very likely that there still are sellers above looking to get involved. Ultimately, it looks as if the $40 level has offered significant support, so if we were to turn around a break down below there, the market is likely to go dropping another $2.50, possibly even $5.00 after that. The US dollar has a major influence on commodities as well, so pay attention to whether or not it starts to strengthen, as it has a negative influence on this market.

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

Natural Gas Price Forecast – Natural Gas Collapsed Into 200 Day EMA

Natural gas markets got hit for over 7% in losses during the trading session on Thursday, as the concern about the hurricane season has drifted away. Quite frankly, there is still plenty of natural gas out there, but demand will start to pick up again. The 200 day EMA of course is an area that technical traders will pay attention to, not to mention the fact that we are right around the $2.10 level, an area that I thought could cause a bit of support. However, it looks like we may dip a little further, perhaps reaching down to the big figure of $2.00 after that. Do not get me wrong, I do think that eventually the market will find its footing again, but the problem with natural gas is that it is so heavily supplied that it is going to be difficult to see this market going straight up in the air, but as we head into the seasonality of bullish pressure, it is likely that we do recover.

NATGAS Video 18.09.20

That being said, the market is one that you should be watching, not necessarily trading at. I have stated a couple of times that I am waiting for some type of daily candlestick to suggest buying. We have not gotten it yet, so at this point we are going to have to be cautious and very patient in order to take advantage of value. We do not have a quite yet, although the next couple of days could present that possibility. I will keep you up-to-date here at FX Empire as to what I am doing and thinking.

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

Gold Price Forecast – Gold Markets Pullback Towards Trendline

Gold markets pulled back a bit during the trading session on Thursday, reaching towards the uptrend line that defines the triangle that I have marked on the chart. Furthermore, the 50 day EMA underneath continues offer support. At this point in time, the market looks as if the market offers value when it dips, but overall, it is more than likely only a matter of time before we go looking towards the $2000 level. The $2000 level is an area that has offered resistance before, so it is not a huge surprise that the market continues to struggle to get above there. If the US dollar continues to weaken longer-term, that could be a good for gold. Furthermore, gold could rally based upon a “risk off rally” as well.

Gold Price Predictions Video 18.09.20

The 50 day EMA being broken to the downside could open up the move down towards the $1900 level, which of course is a large, round, psychologically significant figure that people will pay attention to. If we break down below there, then the market is likely to go looking towards the $1800 level next, which is significant structural support based upon the previous action there.

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Furthermore, the 200 day EMA would more than likely come into play at that general vicinity as well, so it is likely that we would see quite a bit of technical support and value hunting. I am bullish gold for longer-term trading, but right now we have a bit of work to do.

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

Oil Gets Back Above The $40 Level

Oil Video 17.09.20.

OPEC + Is Set To Discuss The Impact Of Coronavirus

Today, OPEC+ meets to discuss the current state of the market. According to a recent Reuters report, the negative impact of the recent surge in the number of new coronavirus cases in the world will be an important part of this discussion.

Israel will enter a three-week lockdown this Friday while many European countries have started to re-introduce certain virus containment measures.

The main longer-term problem for the oil market is the complete lack of visibility on the jet fuel demand front. Now that many countries are trying to contain the second wave of the virus, it is impossible to tell when air travel will return to normal.

OPEC+ sees this problem but there is nothing it can do about it. In my opinion, additional production cuts are off the table for the foreseable future as OPEC+ members need to restore their budgets that suffered a double blow from the virus and low oil prices.

In this light, OPEC+ will likely stick to a wait-and-see approach until the beginning of 2021. When the world is past the flu season in the Northern Hemisphere, the visibility for oil demand patterns should improve.

OPEC+ Laggards Are In Spotlight Again

During the current crisis, OPEC+ emphasized the importance of full compliance with production cuts. As usual, there were laggards, but compliance was much better compared to OPEC’s previous attempts to support the market with production cuts.

This time, OPEC+ will have to discuss the situation around an unusual laggard. According to IEA, United Arab Emirates (UAE) produced 3.11 million barrels per day (bpd) in August compared to its quota of 2.59 million bpd.

UAE explained that it had to increase production during the summer peak of electricity demand. OPEC+ will now try to force UAE back into compliance.

Also, OPEC+ is set to give other laggards like Iraq and Nigeria more time to make additional cuts in order to compensate for the previous overproduction.

The recent inventory report was bullish for the market, and promises of additional production cuts may provide more support to oil prices. However, it remains to be seen whether WTI oil will manage to stay above the $40 level after U.S. Gulf of Mexico producers bring their barrels back to the market after the passage of Hurricane Sally.

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

Crude Oil Price Update – Testing Key Fibonacci Level at $41.57

U.S. West Texas Intermediate crude oil futures are surprisingly strong at the mid-session on Thursday despite the news that production has restarted in the Gulf of Mexico after Hurricane Sally made landfall on Wednesday.

Prices continue to find support after the U.S. Energy Information Administration (EIA) announced on Wednesday that U.S. crude stocks fell 4.4 million barrels last week to their lowest level since April. Traders had priced in a 1.3 million-barrel rise.

At 14:49 GMT, December WTI crude oil is trading $41.42, up $0.70 or +1.72%.

Prices were expected to be capped as the restarting of production was expected to drop about 500,000 barrels per day on the market. Meanwhile, an OPEC+ technical panel warned that a rise in coronavirus cases in some countries may curb oil demand despite signs of economic recovery and indications of a decline in oil stocks, according to an internal document seen by Reuters.

Daily December WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through $44.33 will change the main trend to up. A move through $37.11 will signal a resumption of the downtrend.

The short-term range is $44.33 to $37.11. Its retracement zone at $40.72 to $41.57 is the primary upside target. This zone is currently being tested.

The longer-term resistance is the 50% level at $42.41.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December WTI crude oil market into the close on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at $41.57.

Bearish Scenario

A sustained move under $41.57 will indicate that sellers came in to stop the rally. If this creates enough downside momentum then look for the selling to possibly extend into the 50% level at $40.72. This is a potential trigger point for an acceleration to the downside.

Bullish Scenario

Overtaking $41.57 will signal the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into the major 50% level at $42.41.

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

EUR/USD Mid-Session Technical Analysis for September 17, 2020

The Euro is trading nearly unchanged against the U.S. Dollar on Thursday after clawing back nearly all of its earlier losses. The single-currency had been under pressure since the Federal Reserve left interest rates on hold late Wednesday. The greenback rebounded against the Euro as dealers unwound short positions taken ahead of the Fed decision.

At 14:18 GMT, the EUR/USD is trading 1.1804, down 0.0012 or -0.10%.

But with the new guidance from the Fed focused on keeping U.S. interest rates at current record lows until employment and inflation reach its targets, the dollar’s strength was likely to be temporary.

In other news, European Central Bank Vice-President Luis de Guindos said on Thursday the Euro’s exchange rate is a “fundamental” determinant of Euro Zone inflation. With his comments, he joined a number of ECB policymakers warning about the strength of the single currency.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed early Thursday when sellers took out the previous main bottom at 1.1753. A trade through 1.1917 changes the main trend to up.

On the downside, the key target is the 50% level at 1.1668.

The new minor range is 1.1917 to 1.1737. Its 50% level at 1.1827 is the next upside target. Since the main trend is down, sellers could re-emerge on the first test of this level.

The new short-term range is 1.2011 to 1.1737. Its retracement zone at 1.1874 to 1.1906 is another potential resistance zone.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the EUR/USD the rest of the session on Thursday is likely to be determined by trader reaction to the first pivot at 1.1827.

Bearish Scenario

A sustained move under 1.1827 will indicate the presence of sellers. The first downside target would be 1.1778, followed by 1.1737.

Bullish Scenario

A sustained move over 1.1827 will signal the presence of buyers. If this creates enough upside momentum then look for a potential surge into the 50% level at 1.1874.

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

Gold Forecast – The September Breakdown in Gold is Beginning

Futures hit $1983.80 on Wednesday and turned immediately lower. Next, we expect a collapse below $1900 to trigger the next 6-month low and subsequent buying opportunity.

Below is the triangle chart from Monday. As you can see, the trend adhered to the pattern boundaries, and prices peaked at the area labeled “e” a few days later. Gold should continue its way lower and break support surrounding $1900 by late September or early October.

A close up of a map Description automatically generated

The gold bulls have defended $1910 – $1920 aggressively throughout August and September. When that area finally gives, it could produce a sharp collapse below $1900. Our ideal target for the 6-month low surrounds $1750.

Longer-term, we are very bullish on precious metals and believe gold will enter a bubble. Please see our article: Are You Ready for The Bubble in Gold?

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information visit here.

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

Silver Price Daily Forecast – Silver Dives Back Below The 20 EMA

Silver Video 17.09.20.

Lack Of Additional Stimulus From The Fed Puts Pressure On Silver

Silver returned back below the 20 EMA as the U.S. dollar gained ground against a broad basket of currencies. The U.S. Fed left the interest rate unchanged and did not promise to expand its asset purchases, providing support to the American currency.

The U.S. Dollar Index managed to settle above the 20 EMA at 93.10 but failed to get above the resistance at 93.50 and declined closer to 93.30. If the U.S. Dollar Index manages to settle above 93.50, it will gain more upside momentum and head towards the 50 EMA at 93.90. This scenario will be bearish for silver.

Not surprisingly, gold is also under pressure. Currently, gold is trying to settle below the 20 EMA at $1945. In recent trading sessions, gold swinged back and forth around the 20 EMA but failed to make a decisive move in any direction. If gold moves towards the 50 EMA at $1915, silver will find itself under increased pressure.

There is a worrisome development for silver bulls on the gold/silver ratio front. After a number of calm trading sessions, gold/silver ratio is trying to settle above the resistance at 73. If gold/silver ratio gets more upside momentum, silver will head towards the nearest support level at $25.85.

Technical Analysis

silver september 17 2020

Silver found itself under significant pressure after traders learned that the Fed would not expand its existing asset purchases. As a result, it declined below the 20 EMA at $26.80.

The nearest support level for silver is located at the recent lows at $25.85. Previously, silver managed to quickly rebound from this level but it should have more chances to settle below $25.85 on its second attempt.

In this scenario, silver will gain additional downside momentum and head towards the next support level at the 50 EMA at $25.10.

On the upside, the previous support at the 20 EMA at $26.80 will likely serve as the first material resistance level for silver. If silver manages to settle back above the 20 EMA, it will head towards the major resistance at $27.75. Most likely, silver will need additional strong catalysts to get above this level.

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