USD/CAD Daily Forecast – Strong Oil Limits U.S. Dollar Upside

USD/CAD Video 03.08.20.

Resistance At The 20 EMA Stays Strong

USD/CAD tried to gain more upside momentum but faced resistance at the 20 EMA at 1.3450 as the U.S. dollar rebounded against a broad basket of currencies while WTI oil returned back above the key $40 level.

The U.S. Dollar Index continued its rebound and managed to settle above 93.5. However, it faced resistance at the 94 level and pulled back. In case the U.S. Dollar Index manages to get above 94, USD/CAD will have a good chance to develop more upside momentum.

While the rebound of the U.S. Dollar Index was bullish for USD/CAD, the oil price upside limited the American currency’s gains against the Canadian dollar.

For WTI oil, the key level is the resistance at $42.50. A move above this level will likely lead to increased upside momentum and provide significant support to commodity-related currencies including the Canadian dollar.

Today, the U.S. has reported Manufacturing PMI data for July. Manufacturing PMI increased from 49.8 in June to 50.9 in July while analysts expected that it would grow to 51.3. Numbers above 50 show expansion.

Canada is set to provide its Manufacturing PMI report tomorrow.

Technical Analysis

usd cad august 3 2020

USD to CAD did not manage to get above the nearest resistance at the 20 EMA at 1.3450 and declined closer to 1.3400. The nearest material support level for USD to CAD is located at 1.3330. This level has already been tested several times and proved its strength.

The resistance at the 20 EMA has the potential to become a significant obstacle on the way up. At this point, USD to CAD may find itself stuck in a trading range between the support at 1.3330 and the resistance at the 20 EMA.

In case USD to CAD manages to get above the 20 EMA, it will head towards the major resistance level at 1.3500. A move above this level will likely lead to increased upside momentum, and USD to CAD will head towards the next resistance level at the 50 EMA at 1.3550.

On the support side, a move below 1.3330 could trigger a sell-off, taking USD to CAD to the next support level at 1.3270.

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

S&P 500 Price Forecast – Stock Indices Continue to Climb

The S&P 500 initially pulled back just a bit during the trading session on Monday but then shot higher. We are above the 3300 level early in the session, and it does suggest that we are probably going to go looking towards the gap above, and then eventually the 3400 level. That is the all-time high, and I think it is only a matter of time before we get there due to the fact that the Federal Reserve continues to add liquidity to the markets, and therefore people are buying “things” to get away from the US dollar itself.

S&P 500 Video 04.08.20

Have been in an uptrend anyway, so regardless as to what we are doing in the short term, buying is the one thing that you should be looking at, as selling is very dangerous to do. I think there is significant support at the 3200 level which has been sustained, so that is something to keep in mind going forward. The 3400 level could be a bit difficult to get above, but once we do that should open up a move towards the 3500 level.

Even if we break down below the 3200 level the 50 day EMA is sitting at the 3130 level, and therefore I think it is only a matter of time before the buyers return on any pullback. Remember, stock markets have nothing to do with the economy, and everything to do with liquidity. As long as the Federal Reserve continues to throw money at the market, they will continue to buy things. This is a market that has been one way for a while and I just do not see it changing.

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

Silver Price Forecast – Silver Markets Show Signs of Exhaustion

Silver markets have gotten a bit overextended during the trading session again on Monday, giving back some of the gains. Ultimately, this is a market that I think needs to find either some type of stability, or some type of value in order to continue the uptrend. I do believe that longer-term we are going higher but that huge candlestick from last week I think is defining the range right now. That means that $26 on the top will be the ceiling, while the basement is closer to the $22.55 level. All things being equal though, I do think that at the very least we need to cool off a bit and pull back in order to consolidate, or perhaps even break down a bit from here.

SILVER Video 04.08.20

Either way, I have no interest whatsoever in trying to short this market, as it is far too strong. Furthermore, the Federal Reserve continues to work against the value of the greenback and that of course works for the silver market itself. If that is going to be the case, then I believe that silver is going to go much higher over the longer term, but we may have simply just run out of momentum for the short term. That is okay, the market can go straight up in the air forever so it makes quite a bit of sense that we would have to give back some here. Being patient will be the best way to trade this market, as chasing the trade right now would be very dangerous.

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

What To Expect After Walt Disney Earnings

Walt Disney Co. (DIS) reports fiscal Q3 2020 earnings after Tuesday’s closing bell in the United States, with analysts expecting a loss of $0.64 per-share on $12.48 billion in revenue. The stock tread water after missing Q2 profit estimates by a wide margin in May, with shareholders hanging tough as soon as the company reported outstanding subscription growth in the Disney+ streaming service. It’s now trading 15% higher but still below levels broken in the first quarter.

Walt Disney Reopens Florida Theme Park

The Disney World Resort in Orlando, Florida reopened in July, right at ground zero in the U.S.A.’s COVID-19 summer spike. Anecdotal evidence suggests that out-of-state visitors are avoiding the park like the plague but the entertainment giant has offered few specifics. As a result, Wall Street analysts will be listening closely to Tuesday’s conference call, trying to gauge the success or failure of the questionable initiative.

Theme parks are just one of many divisions impacted by the pandemic, with the majority of film production still shut down, forcing Walt Disney to delay the filming of new Star Wars, Marvel, and Pixar movies. The ESPN sports division is struggling as well, with MLB games delayed due to team outbreaks that threaten to derail an abbreviated 60-game season. And, of course, no one expects Disney cruise ships to sail again before the second quarter of 2021.

Wall Street And Technical Outlook

Wall Street Consensus remains highly guarded, with a ‘Hold’ rating based upon 7 ‘Buy’ and 12 ‘Hold’ recommendations. Two analysts believe that shareholders should consider moving to the sidelines at this time. Price targets currently range from a low of $85 to a street-high $146 while the stock is trading $4 below the median $120 target. It’s possible another blowout quarter in Disney+ subscriptions could lift sentiment enough to reach the median target.

Walt Disney is holding up relatively well, given multiple headwinds, oscillating just below the 200-day moving average at 120. Buying pressure eased in June after an oversold impulse, with holding patterns pointing to a wait-and-see attitude by shareholders. A destructive second pandemic wave this fall and winter could shake that faith, generating an exodus that brings the first quarter low back into play.

Oil Gets Back Above $40 As Traders Cheer Encouraging Manufacturing PMI Data

Oil Video 03.08.20.

U.S. Oil Rig Count Falls Again

The recent Baker Hughes Rig Count report showed that the number of active rigs in the U.S. remained flat at 251. Meanwhile, the number of rigs drilling for oil declined by 1 to 180.

The previous report showed that the number of U.S. rigs drilling for oil increased by 1 to 181. Some traders have started to worry that such increase signals the beginning of a new upside trend in U.S. production which would be bearish for the oil market.

Fortunately for oil bulls, the new Baker Hughes Rig Count report has indicated that U.S. producers are not ready to meaningfully increase production at current oil prices.

This is especially important at times when OPEC+ countries are increasing their production by two million barrels per day (bpd) as they gradually ease the previous production cuts.

For example, Russia has stated that its oil production was in line with the OPEC+ deal in July while it has reportedly increased its oil production in the first days of August.

In this situation, an increase of production from U.S. shale companies could serve as a material bearish catalyst. However, the recent data indicates that U.S. oil production is set to remain mostly flat in the near term, which is good for the oil market.

Positive Manufacturing PMI Reports Provide Support To Oil Prices

WTI oil’s recent attempt to settle below the key $40 level was not successful, and oil is back above $40.

Oil prices got material support from the release of Manufacturing PMI reports. In Euro Area, Manufacturing PMI increased from 47.4 in June to 51.8 in July. In the U.S., Manufacturing PMI grew from 49.8 to 50.9. Numbers above 50 show expansion.

Traders are betting that recent improvements in the manufacturing segment will boost oil demand and support oil prices.

However, it remains to be seen whether the growth in the manufacturing segment will be sufficient enough to offset worries about new restrictive measures which are implemented to stop the spread of coronavirus.

Most recently, Philippines imposed a new two-week lockdown in its capital Manila to slow down the spread of the disease.

In Europe, the travel sector recovery is once again postponed as countries introduce quarantine measures for travellers and require them to wear masks.

According to a recent Reuters report, most potential tourists from UK, France and Germany will skip a holiday if they need to get tested for COVID-19 and are required to wear face masks. This does not bode well for the recovery of jet fuel demand.

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

Crude Oil Price Forecast – Crude Oil Markets Continue to Get Squashed

WTI Crude Oil

The West Texas Intermediate Crude Oil market has done very little during the trading session again on Monday as we continue to see the market chop back and forth. We are essentially stuck between the 50 day EMA on the bottom and the 200 day EMA on the top. If that is going to be the case, then it is likely that what we are going to see is a market that continues to look for some type of longer-term catalyst. Right now, we simply do not have one. We have a lot of things going on at the same time that they seem to be canceling each other out.

Crude Oil Video 04.08.20

Brent

Brent markets of course are doing the same thing, as we have no real drive to go in one direction or another. As long as the US dollar continues to struggle, it is likely that we will see a bit of upward pressure, but at the same time we have to worry about whether or not there is enough demand, and of course whether or not there is going to be compliance when it comes to OPEC countries. So far, the compliance has been relatively strong so that has been one of the boosts higher and of course with the US dollar certainly that helps to. However, and this is a huge thing, demand is most certainly down as the lack of air travel alone has taken a huge chunk out of it.

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

Natural Gas Price Forecast – Natural Gas Markets Shoot Through 200 EMA

Natural gas markets have shot through the roof during the trading session on Monday to kick off the week, slicing through the 200 day EMA. That being said, we are dealing with the $2.00 level, an area that of course will cause a certain amount of psychological resistance. Over the last several months, we have been building on this range, and I think we are trying to put in some type of bottom for the market longer term, due to the fact that we are seen bankruptcies out there, and that should bring down supply in theory. Furthermore, there has been a pretty significant amount of heat in the United States driving up demand.

NATGAS Video 04.08.20

Add in a tropical storm in the fact that the US dollar is losing value, then you have an opportunity for natural gas to reclaim some real estate to the upside. I think we probably have a pullback ahead of us, but I would be willing to buy that dip, especially somewhere near the $1.80 level if we can get down there.

If you have the ability to trade in small increments, then we could be looking at a potential trend change, at least for the second half of the year, which could provide a nice little opportunity. I do not have any interest in shorting this market because we are so low from a historical standpoint. When you zoom out several years, you can see that clearly the $1.50 level was a major turning point more than once.

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

Gold Price Forecast – Gold Markets Pull Back From Major Figure

Gold markets have broken above the $2000 level initially during trading on Monday but have pulled back from that psychologically important level. Ultimately, I think we go well beyond $2000, but it may take some time to get used to the idea. Furthermore, the market has been overextended for a while, so I am more than comfortable sitting on the sidelines and waiting for the gold markets to come back. That being said, if we get a daily close above the $2000 level then it is probably a signal that we are ready to continue.

Gold Price Predictions Video 04.08.20

To the downside I like the $1900 level for support, but I can also say the same thing about $1950. After all, that is an area that I think will attract a certain amount of attention due to the fact that there was a little bit of a gap there. Ultimately, gold is something that I have no interest in shorting and therefore it is a matter of being patient enough to take advantage of the opportunities when it becomes just a bit “cheap.” With that being said, the $1900 level is massive support, but even below there I think the absolute “floor” in the market is closer to the $1700 level.

The 200 day EMA sits right there, and of course between here and there we also have the 50 day EMA which is trading at roughly $1800. All things being equal, there is absolutely nothing on this chart that remotely suggests that you have any business trying to short gold. At this point the question is not whether to be longer short, but rather to own it or wait for cheaper pricing?

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

Silver Price Daily Forecast – Silver Failed To Get Above Resistance At $24.95

Silver Video 03.08.20.

Silver Finds Itself Under Pressure As U.S. Dollar Continues To Rebound

Silver pulled back closer to $24.00 as the U.S. dollar gained ground against a broad basket of currencies while gold corrected from recent highs.

The U.S. Dollar Index continued its rebound, putting pressure on precious metals and other commodities. The U.S. Dollar Index has managed to settle above the resistance at 93.5 and is trying to get above the 94 level.

If the U.S. dollar continues its upside move, silver may experience more pressure since stronger dollar makes it more expensive for buyers who have other currencies. In case the U.S. Dollar Index will be able to get above the 94 level, it will likely head towards the significant resistance at the 20 EMA at 94.90.

Meanwhile, spot gold made an attempt to test the $2000 level but failed to gain more upside momentum and pulled back closer to $1970. At this point, gold is trying to consolidate just below the $2000 level which is a healthy sign for bulls.

However, a continued rebound of the U.S. dollar may put additional pressure on gold and cause a correction which will be also bearish for silver.

Gold/silver ratio is forming a range between 80 and 85 while volatility decreases. Gold/silver ratio did not manage to immediately rebound after the major downside move that happened in July, which is a bullish development for silver.

Technical Analysis

silver august 3 2020

Silver failed to settle above the nearest resistance level at $24.95 and pulled back. The nearest support level at $24.00 has also been tested during today’s trading session.

Volatility may decrease in the upcoming trading sessions, and silver may find itself in a new trading range between support at $24.00 and resistance at $24.95.

However, this scenario is not guaranteed since silver volatility may increase as a result of rapid moves on the U.S. dollar front or a gold price breakout.

In case silver settles below the support level at $24.00, it will head towards the next support at $23.25.

A move above the nearest resistance at $24.95 will open the way to the test of the next resistance level which is located at recent highs at $26.20.

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

USD/JPY Price Forecast – US Dollar Grind Higher

The US dollar tried to break higher against the Japanese yen early on Monday, clearing the ¥106 level. However, we do have some issues above with resistance and it will be interesting to see whether or not we can continue going higher. The 50 day EMA sits at roughly ¥107, an area that is obviously psychologically important as well.

USD/JPY Video 04.08.20

Because of this, I am looking to fade this rally on signs of exhaustion I do not really believe that this is a market that is suddenly going to change its overall trend this quickly, and it should probably be noted that the Friday candlestick that was so impressive was also end of month trading, meaning that there may have been some profit-taking. Nonetheless, I still believe there is more than enough bearish pressure above to cause some issues, so at this point in time am simply looking to sell.

It is not until we clear the 200 day EMA, which is sitting at roughly ¥108, that I am comfortable buying. Furthermore, we have the jobs number coming out this Friday that will probably move the markets as well. At this point in time I think the market is simply going to run out of steam, and then it becomes a nice selling opportunity. Until then, I will probably check this chart every few hours on a smaller time frame to see when and if we get the exhaustion that I am looking for. I have no interest in buying anytime soon as rallies continue to get sold into.

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

GBP/USD Price Forecast – British Pound Testing Major Figure

The British pound fell a bit during the trading session on Monday to kick off the week, reaching down towards the 1.30 level where buyer step in and pick that up a bit. At this point, it is still an open-ended question as to whether or not we can hold the 1.30 level, but obviously we are still in an uptrend regardless of what happens next. With that in mind I like the idea of buying dips but lied, I wish this dip with a little bit deeper because it gives you more room to run.

GBP/USD Video 04.08.20

Nonetheless, the market is looking very likely to find buyers sooner rather than later, and if we can take out the shooting star from the Friday session that would be a very strong sign. I am not a seller, and if we break down below the 1.30 level then I will simply look to pick up the British pound closer to the 1.2650 level, perhaps even the 1.2750 level.

The British pound has been extraordinarily strong, and I think that will continue to be the case as the Federal Reserve continues to weaken the US dollar in general. With this, it is almost as if Brexit is never going to be an issue, but I digress. At this point it is obvious that the FX markets are not paying attention to Brexit, and solely paying attention to the Federal Reserve and its loose monetary policy going forward.

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

GBP/JPY Price Forecast – British Pound Stalls Against Yen

The British pound has shown itself to be a little overextended against the Japanese yen during early trading on Monday, as the ¥139 level offers resistance yet again. That being said, this is a market that I think will eventually go looking towards the ¥140 level, and if we can clear that level continue to go much higher. I like buying dips, and quite frankly I would like to see a little bit bigger of a pullback in order to get involved. Nonetheless, if we break the ¥140 level to the upside it is likely that we go much further.

GBP/JPY Video 04.08.20

The 200 day EMA underneath has been cleared quite handily over the last couple of days, so I think it is only a matter of time before that would offer a longer-term support level, just as the ¥135 level has been previously. In fact, the 50 day EMA is sitting there at the ¥135 level, so I think that also offers a bit of psychological support as well. Ultimately, this pair desperately needs to take a break, and that might be what we are seeing right now.

Ultimately, I think that you will see a lot of volatility but given enough time I expect this market to go much higher. After all, we have seen a lot of bullish pressure in the British pound in general, so it is hard to imagine why that would change suddenly. In the meantime, I am simply observing what is going on and I recognize that we are in a massive move just waiting to happen.

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

EUR/USD Price Forecast – Euro Pulls Back Finally

The Euro has initially tried to rally during the trading session on Monday but found the 1.18 level to be a bit too much, and then pulled back towards the 1.17 level. This is an area that will probably cause some support, but quite frankly it still a bit elevated. I think at this point we need to see the Euro consolidate a bit if nothing else.

EUR/USD Video 04.08.20

That being said, I do not like the idea of shorting this pair regardless. Even if we break down below the 1.17 level, it is very likely that we will find plenty of buyers underneath. In fact, I think there is a lot of support all the way down to the 1.15 level, so I am hoping to see a little bit more of a deeper correction and then take advantage of it.

To the upside I believe that we are going to go looking towards the 1.20 level eventually, but quite frankly I do not think that we get there overnight. This is a market that has been overbought for some time, so I think the healthiest thing we can do is either consolidate or pull back. After all, markets cannot go in one direction forever, despite the fact that they often tried to. I believe that the 1.15 level is now the “floor” in the market, and therefore I have no interest in shorting until we get well below that important figure.

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

AUD/USD Price Forecast – Australian Dollar Pulls Back

The Australian dollar has pulled back a bit during the trading session on Monday, as we have breached the 0.71 level to the downside heading into the New York session. That being said, there is significant support just below and I think that will continue to be the case. With that in mind I am looking to take advantage of any type of supportive action here as we have decidedly changed the overall attitude of the Aussie dollar over the last several months.

AUD/USD Video 04.08.20

Keep in mind that there are a lot of concerns about the coronavirus out their still, but it seems like the FX markets are more or less worried about the Federal Reserve and its loose monetary policy above all else. That has benefited the Aussie dollar over the last couple of weeks, and should continue to do so, despite the fact that Melbourne Australia is currently under a bit of a lockdown due to the virus outbreak.

Federal Reserve liquidity is a main driver of markets around the world, and FX markets are not going to be any different. Quite frankly you need to buy other things to protect your wealth that based in US dollars, so the Australian dollar is probably as good as any other asset that you can think of. This could also be a bit of a play on the Chinese economy getting a bit better, but at this point I think that is just the sideshow and not the main attraction.

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

GBP/USD Daily Forecast – U.S. Dollar Tries To Gain More Ground

GBP/USD Video 03.08.20.

U.S. Democrats And Republicans Fail To Reach Coronavirus Aid Package Deal

GBP/USD trades near 1.3100 as the U.S. dollar is mostly flat against a broad basket of currencies amid continued negotiations about the new U.S. coronavirus aid package.

The U.S. Dollar Index has stabilized near 93.5 after rebounding from recent lows at 92.5. Meanwhile, Republicans and Democrats continued their negotiations during the weekend but failed to reach a deal.

According to White House Chief of Staff Mark Meadows, Republicans wanted to extend some federal unemployment benefits while continuing negotiations on the whole package but Democrats wanted a comprehensive deal.

He also added that he was not optimistic that negotiations would successfully conclude in the near term.

Failure to extend special unemployment benefits poses risks for consumer activity which is the main driver of the U.S. economy. On the other hand, excessive money-printing could put additional pressure on the U.S. dollar and its status as the world’s main reserve currency.

Today, traders will have to digest UK Manufacturing PMI and U.S. Manufacturing PMI reports for July.

UK Manufacturing PMI is projected to increase from 50.1 in June to 53.6 in July.

In the U.S., Manufacturing PMI is expected to grow from 49.8 to 51.3. Numbers above 50 show expansion.

Manufacturing was not hit as hard as services during the current crisis so there’s a good chance that today’s data will be optimistic and provide some additional support to riskier assets.

Technical Analysis

gbp usd august 3 2020

GBP/USD tries to stabilize near 1.3100 following the major upside move.

In case GBP/USD manages to settle above 1.3100, it will have a good chance to test the nearest resistance level at 1.3200.

On the support side, the nearest support level is located at 1.3070. GBP/USD has already made an attempt to settle below this level but this attempt was unsuccessful.

If GBP/USD settles below 1.3070, it will head towards the next support level at 1.3020.

Currently, GBP/USD continues to move in a rather tight upside channel, and the upside trend remains intact.

However, RSI is still in the overbought territory, suggesting that risks of correction remain elevated.

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

Bitcoin and Ripple’s XRP Weekly Technical Analysis – August 3rd, 2020

Bitcoin

Bitcoin rallied by 11.11% in the week ending 2nd August. Following on from a 7.77% gain from the previous week, Bitcoin ended the week at $11,053.8.

It was a bullish week for Bitcoin and the broader market. Bitcoin slipped to a Monday intraweek low $9,944.9 before making a move.

Steering clear of the first major support level at $9,339, Bitcoin rallied to a Sunday intraweek high $12,097.0.

Bitcoin broke through the week’s major resistance levels before sliding back to sub-$11,000 levels.

Bitcoin fell back through the third major resistance level at $11,835 and the second major resistance level at $10,800.

Steering well clear of the first major support level at $9,339, however, Bitcoin broke back through the first major resistance level.

5 days in the green that included an 11.01% rally on Monday and 4.01% gain on Saturday delivered the upside for the week. A 6.36% slide on Sunday reversed some of the gains, however.

For the week ahead

Bitcoin would need to avoid a fall through $11,032 pivot to bring the first major resistance level at $12,119 into play.

Support from the broader market would be needed for Bitcoin to break out from last week’s high $12,097.

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

In the event of a breakout, Bitcoin could take a run at the second major resistance level at $13,184.

Failure to avoid a fall through the $11,032 pivot would bring support levels into play.

Barring a broad-based sell-off, Bitcoin should avoid sub-$10,500 levels and the first major support level at $9,967.

At the time of writing, Bitcoin was up by 0.87% to $11,150.0. A mixed start to the week saw Bitcoin fall to an early morning low $10,943 before rising to a high $11,200 on Monday.

Bitcoin left the major support and resistance levels untested at the start of the week.

BTC/USD 03/08/20 Weekly Chart

Ripple’s XRP

Ripple’s XRP surged by 33.50% in the week ending 2nd August. Following on from a 7.8% gain from the previous week, Ripple’s XRP ended the week at $0.28764.

A mixed start to the week saw Ripple’s XRP fall to a Monday intraweek low $0.20949 before making a move.

Steering clear of the first major support level at $0.19669, Ripple’s XRP rallied to a Sunday intraweek high $0.32620.

Ripple’s XRP broke through the major resistance levels sliding back to sub-$0.25 levels.

The pullback saw Ripple’s XRP fall through the third major resistance level at $0.27739 and the second major resistance level at $0.24422.

Finding late support, however, Ripple’s XRP broke back through the second major resistance level to end the week at $0.28 levels.

6-days in the green that included a 12.01% rally on Saturday delivered the upside for the week.

For the week ahead

Ripple’s XRP would need to avoid a fall through the $0.27434 pivot to support a run at the first major resistance level at $0.33950.

Support from the broader market would be needed, however, for Ripple’s XRP to break out from last week’s high $0.32620.

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

In the event of another breakout, the second major resistance level at $0.39135 and $0.40 levels could come into play.

Failure to avoid a fall through the $0.27434 pivot would bring the first major support level at $0.22249 into play.

Barring an extended broader-market sell-off, however, Ripple’s XRP should steer of sub-$0.24 levels in the week.

At the time of writing, Ripple’s XRP was up by 2.59% to $0.29510. A mixed start to the week saw Ripple’s XRP fall to an early Monday low $0.28383 before rising to a high $0.29958.

Ripple’s XRP left the major support and resistance levels untested at the start of the week.

XRP/USD 03/08/20 Daily Chart

The Crypto Daily – Movers and Shakers – August 3rd, 2020

Bitcoin, BTC to USD, slid by 6.36% on Sunday. Reversing a 4.01% rally from Saturday, Bitcoin ended the week up by 11.11% to $11,053.8.

A bullish start to the day saw Bitcoin rise to an early morning intraday high $12,097 before hitting reverse.

Bitcoin broke through the first major resistance level at $12,022.8 before sliding to an early morning intraday low $10,548.0.

Bitcoin fell through the first major support level at $11,406.8 and the second major support level at $11,008.9.

Steering clear of the third major support level at $10,392.9, Bitcoin briefly revisited $11,300 levels before easing back.

Bitcoin broke back through the second major support level to limit the loss on the day.

The near-term bullish trend remained intact, supported by the latest move through to $11,000 levels. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to form a near-term bearish trend.

The Rest of the Pack

Across the rest of the majors, it was a bearish day on Sunday.

Bitcoin Cash ABC (-11.53%), Bitcoin Cash SV (-11.14%), EOS (-10.93%) led the way down.

Cardano’s ADA (-7.16%), Litecoin (-8.02%), and Tron’s TRX (-7.24%) also saw heavy losses

Binance Coin (-3.10%), Ethereum (-3.92%), Monero’s XMR (-5.16%), Ripple’s XRP (-1.25%), Stellar’s Lumen (-4.85%), and Tezos (-4.89%) saw relatively modest losses on the day.

While it was a bearish Sunday, it was a mixed week.

Ripple’s XRP rallied by 33.5% to lead the way.

Bitcoin Cash ABC (+13.82%), Bitcoin Cash SV (+15.09%), Ethereum (+19.52%), and Litecoin (+17.95%) also found strong support.

Binance Coin (+7.10%), EOS (+8.23%), Monero’s XMR (+8.71%), Stellar’s Lumen (+3.29%), and Tron’s TRX (+2.29%) trailed the front runners.

Cardano’s ADA (-9.99%) and Tezos (-3.19%) bucked the trend in the week, however.

In the week, the crypto total market cap rose from a Monday low $284.79bn to a Sunday high $362.06bn. At the time of writing, the total market cap stood at $331.14bn.

Bitcoin’s dominance rose to a Tuesday high 64.58% before sliding to a Sunday low 61.66%. At the time of writing, Bitcoin’s dominance stood at 62.07.

This Morning

At the time of writing, Bitcoin was up by 0.69% to $11,130.5. A mixed start to the day saw Bitcoin fall to an early morning low $10,943.0 before rising to a high $11,169.0.

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

Elsewhere, it was a bullish start to the day. Stellar’s Lumen was up by 2.46%, at the time of writing, to lead the way.

BTC/USD 03/08/20 Hourly Chart

For the Bitcoin Day Ahead

Bitcoin would need to move through the $11,233 pivot to support a run at the first major resistance level at $11,918.

Support from the broader market would be needed, however, for Bitcoin to break out from $11,500 levels.

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

In the event of a crypto breakout, Bitcoin could eye the second major resistance level at $12,782.

Failure to move through the $11,233 pivot level would bring the first major support level at $10,369 into play.

Barring an extended crypto sell-off, however, Bitcoin should steer clear of sub-$10,500 levels on the day.

 

EOS, Ethereum and Ripple’s XRP – Daily Tech Analysis – August 3rd, 2020

EOS

EOS slid by 10.93% on Sunday. Reversing a 6.71% gain from Saturday, EOS ended the week up by 8.23% to $2.9409.

It was a choppy start to the day. EOS rose to an early morning intraday high $3.4852 before hitting reverse.

EOS broke through the first major resistance level at $3.4029 before tumbling to an early morning intraday low $2.4884.

The sell-off saw EOS slide through the day’s major support levels before briefly revisiting $3.0 levels.

EOS moved back through the third major support level at $2.7121 and the second major support level at $2.9748.

It was a bearish 2nd half of the day, however. EOS fell back through the second major support level to end the day in the deep red.

At the time of writing, EOS was up by 0.75% to $2.9631. A mixed start to the day saw EOS fall to an early morning low $2.9022 before rising to a high $2.9631.

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

EOS/USD 03/08/20 Hourly Chart

For the day ahead

EOS would need to move through the $2.9715 pivot level to support a run at the first major resistance level at $3.4546.

Support from the broader market would be needed, however, for EOS to break back through to $3.40 levels.

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

Failure to move through the $2.9715 pivot would bring the first major support level at $2.4578 into play.

Barring an extended sell-off, EOS should steer well clear of the second major support level at $1.9747.

Looking at the Technical Indicators

First Major Support Level: $2.4578

Pivot Level: $2.9715

First Major Resistance Level: $3.4546

23.6% FIB Retracement Level: $6.62

38% FIB Retracement Level: $9.76

62% FIB Retracement Level: $14.82

Ethereum

Ethereum fell by 3.92% on Sunday. Partially reversing an 11.69% rally from Saturday, Ethereum ended the week up by 19.52% to $371.21.

Tracking the broader market, Ethereum rallied to an early morning intraday high $415.00 before hitting reverse.

Ethereum broke through the first major resistance level at $406.35 before tumbling to an early morning intraday low $325.75.

The selloff saw Ethereum fall through the first major support level at $356.1 before finding support.

More significantly, Ethereum also fell through the 38.2% FIB of $367 before the partial recovery.

Ethereum moved back through to $389 levels before falling back to end the day at sub-$380.

At the time of writing, Ethereum was up by 1.00% to $375.93. A mixed start to the day saw Ethereum fall to an early morning low $366.34 before rising to a high $376.63.

While leaving the major support and resistance levels untested, Ethereum found support at the 38.2% FIB of $367 early on.

ETH/USD 03/08/20 Hourly Chart

For the day ahead

Ethereum would need to avoid a fall through the $371 pivot to support a run at the first major resistance level at $416.22.

Support from the broader market would be needed, however, for Ethereum to break out form Saturday’s high $415.00.

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

A fall through the $371 pivot would bring the first major support level at $326.97 into play.

Barring another extended sell-off, however, Ethereum should steer well clear of the second major support level at $281.74.

Looking at the Technical Indicators

First Major Support Level: $326.97

Pivot Level: $371

First Major Resistance Level: $416.22

23.6% FIB Retracement Level: $257

38.2% FIB Retracement Level: $367

62% FIB Retracement Level: $543

Ripple’s XRP

Ripple’s XRP fell by 1.25% on Sunday. Following a 12.06% rally on Saturday, Ripple’s XRP ended the week up by 33.50% to $0.28764.

A bullish start to the day saw Ripple’s XRP rise to an early morning intraday high $0.3262 before hitting reverse.

Ripple’s XRP broke through the first major resistance level at $0.3071 and the second major resistance level at $0.3233.

The reversal saw Ripple’s XRP slide through the first major support level at $0.2653 to an intraday low $0.24158.

Steering clear of sub-$0.24 support levels, Ripple’s XRP revisited $0.30 levels before falling back into the red.

In spite of the bearish day, Ripple’s XRP moved back through the first major support level to limit the loss.

At the time of writing, Ripple’s XRP was up by 2.95% to $0.29612. A mixed start to the day saw Ripple’s XRP fall to an early morning low $0.28383 before rising to a high $0.29661.

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

XRP/USD 03/08/20 Hourly Chart

For the day ahead

Ripple’s XRP will need to avoid a fall through the $0.2851 pivot to support a run at the first major resistance level at $0.3287.

Support from the broader market would be needed, however, for Ripple’s XRP to break out from Saturday’s high $0.3262.

Barring another broad-based crypto rally, the first major resistance level should cap any upside.

In the event of a breakout, Ripple’s XRP could make a run at the second major resistance level at $0.0.3698.

Failure to avoid a fall through the $0.2851 pivot would bring the first major support level at $0.2441 into play.

Barring an extended crypto sell-off, Ripple’s XRP should avoid sub-$0.24 levels, however.

Looking at the Technical Indicators

First Major Support Level: $0.24441

Pivot Level: $0.2851

First Major Resistance Level: $0.3287

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

Starbucks Could Test March Low

Starbucks Corp. (SBUX) rallied 3.7% on Wednesday after beating fiscal Q3 2020 consensus estimates but still lost $0.46 per-share on $4.22 billion in revenue, a staggering 38.1% decline compared to the same quarter in 2019. The company reported weakness all across the world, with revenue at the Global and Americas divisions dropping around 40%. Higher individual sales eased the bearish results but it wasn’t enough to lift earnings into the green.

Starbucks Vulnerable To Second Wave

The coffee giant now expects a fiscal year revenue decline of 10% to 15%, which forecasts a major sales uptick between now and year’s end. The positive guidance seems unrealistic, given the current path of the COVID-19 pandemic and likelihood of a second wave in the Northern Hemisphere this winter. Valuation could take a major hit in 2021 if sales continue to fall, sending the stock price to much lower levels.

Telsey Advisory Group analyst Bob Derrington recently lowered his target and discussed the long-term outlook, noting management was attempting to “restore and build confidence” by accelerating roll-outs of mobile order pay systems. He also outlined realignment initiatives for the new environment, indicating the retailer will “optimize its global store portfolio, including accelerated development of its smaller, more efficient pick-up stores and suburban drive-thru locations, and the closure of up to 400 urban cafes in the U.S. and 200 in Canada.”

Wall Street And Technical Outlook

Wall Street currently rates Starbucks as a ‘Moderate Buy’, based upon 10 ‘Buy’ and 14 ‘Hold’ recommendations. No analysts are recommending that shareholders sell their positions at this time. Price targets currently range from a low of $73 to a street-high $95 while the stock closed Friday’s U.S. session about $7 below the median $83 target. This placement suggests that higher sales will be needed to generate upside but that doesn’t seem likely in the third quarter.

Starbucks posted an all-time high near 100 in August 2019 and completed a double top breakdown in February 2020, establishing strong resistance in the low-80s. The stock sold off to a 19-month low in March and reversed at new resistance in June, easing into a holding pattern below that critical level. While a breakout will improve the technical outlook, the stock is trading perilously close to support at 71, with a breakdown raising odds for a decline into the March low.

 

 

 

The Week Ahead – COVID-19, Economic Data and US Politics in Focus

On the Macro

It’s a busier week ahead on the economic calendar, with 59 stats in focus in the week ending 7th August. In the week prior, just 57 stats had been in focus.

For the Dollar:

It’s another busy week ahead on the economic data front.

In the 1st half, the ISM’s July private sector PMIs, ADP nonfarm employment change figures, and June factory orders are in focus.

We would expect Wednesday’s ISM Non-Manufacturing PMI and ADP Nonfarm Employment Change to have the greatest impact.

The focus will then to Thursday’s initial jobless claims and Friday’s nonfarm payroll numbers and unemployment rate.

Following some disappointing weekly jobless claims figures and the rise in COVID-19 cases, the labor market figures will be key.

For the service sector, any contraction in July, following a jump in productivity in June, would also weigh on riskier assets.

The Dollar Spot Index ended the week down by 1.15% to 93.349.

For the EUR:

It’s also another busy week ahead on the economic data front.

On Monday and Wednesday, July’s manufacturing and services PMIs are due out of Italy and Spain.

Finalized PMIs are also due out of France, Germany, and the Eurozone.

With Spain seeing a spike in new COVID-19 cases, expect some attention to the PMIs. Ultimately, however, the Eurozone’s services and composite will likely have the greatest impact.

The focus will then shift German factory orders for June, due out on Thursday.

At the end of the week, Germany remains in focus, with June’s industrial production and trade figures due out.

Barring disappointing numbers, June retail sales figures for the Eurozone should have a muted impact on Thursday.

The EUR/USD ended the week up by 1.05% to $1.1778.

For the Pound:

It’s a relatively busy week ahead on the economic calendar. July’s finalized private sector PMIs are due out and will garner plenty of interest.

Expect any downward revision to the Services PMI on Wednesday to have the greatest impact.

On Thursday, the focus will then shift to the BoE. More action is expected and the Bank may consider an extension to the suspension of banks paying dividends and buybacks.

While the BoE is in action, we can also expect any further updates on Brexit to also influence in the week.

The GBP/USD ended the week up by 2.27% to $1.3085.

For the Loonie:

It’s a relatively busy week ahead on the economic calendar.

On Wednesday, June’s trade figures are due out ahead of July employment numbers on Friday.

Expect the employment figures to have the greatest impact, however.

Barring dire numbers, the Ivey PMI for July should have a muted impact on the Loonie on Friday.

Away from the stats, COVID-19 and geopolitics will continue to influence crude oil prices and risk sentiment.

The Loonie ended the week up by 0.02% to C$1.3412 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively busy week ahead for the Aussie Dollar.

At the start of the week, the Manufacturing Index figures are due out ahead of a busy Tuesday.

We would expect manufacturing PMIs from China, the EU, and the U.S to have a greater impact, however, on Monday.

The focus will then shift June trade and retail sales figures due out on Tuesday. Expect the retail sales figures to have the greatest impact. The RBA continues to rely on consumer spending to support the economy. Weak numbers will be a test for the Aussie Dollar.

For the week, however, the main event is the RBA monetary policy decision on Tuesday.

Following the spike in new COVID-19 cases, will the RBA remain optimistic about the economic recovery?\

Any dovish chatter and the Aussie Dollar could eye sub-$0.70 levels. At the end of the week, the RBA’s statement on monetary policy will also draw interest.

The Aussie Dollar ended the week up by 0.53% to $0.7143.

For the Kiwi Dollar:

It’s another quiet week ahead on the economic calendar.

2nd quarter employment figures are due out on Wednesday. The markets will likely be forgiving to an extent, with COVID-19 expected to have an impact on employment.

With economic data on the lighter side, private sector PMIs from China, the EU, and the U.S will influence.

Expect geopolitics and COVID-19 news to also have an impact in the week. Any signs of a slowdown in new cases globally and expect support to kick in.

The Kiwi Dollar ended the week down by 0.18% to $0.6629.

For the Japanese Yen:

It is a busy week ahead on the economic calendar.

Finalized 2nd quarter GDP and July’s manufacturing PMI numbers are due out on Monday.

The focus will then shift to July’s service PMI on Wednesday and June household spending figures on Friday.

While the stats will influence sentiment towards BoJ monetary policy, the Yen will remain at the mercy of COVID-19 and geopolitics.

The Japanese Yen ended the week up by 0.29% to ¥105.83 against the U.S Dollar.

Out of China

It’s a relatively busy week ahead on the economic data front.

July’s private sector PMIs are due out on Monday and Wednesday. Expect the figures to influence risk appetite in the week.

On Friday, July trade figures will also garner plenty of attention. While exports remain the main area of focus, any sizeable fall in imports would test risk appetite on the day.

Away from the economic calendar, any chatter from Beijing will also need monitoring.

The Chinese Yuan ended the week up 0.62% to CNY6.9752 against the U.S Dollar.

Geo-Politics

UK Politics:

Brexit will remain in focus. Talks are set to continue through August and September ahead of an EU Summit in October.

60 days may sound like a lot but when considering the lack of progress over 4-years…

A light economic calendar and Brexit chatter have provided the Pound with support. We may even see the markets brush off the chances of a hard Brexit.

Getting on with it seems to be the key desire now rather than dragging it out any longer. Either way, we’re not expecting Johnson and the team to give too much away…

U.S Politics:

Last week, the Republicans showed signs of fragmentation. As Presidential Election stress builds, we could see more fractures as Trump attempts to distract voters.

The immediate issue at hand, however, is the COVID-19 stimulus package. Any failure to deliver will weigh on the Dollar. Labor market conditions have not improved and the 2nd wave has shown little sign of slowing. A lack of benefits for the unemployed will raise more issues than a fall in household spending. We have already seen social unrest…

The Coronavirus:

It was yet another bad week, with the number of new COVID-19 cases continuing to rise at a marked pace.

From the market’s perspective, the 3 key considerations have been:

  1. Progress is made with COVID-19 treatment drugs and vaccines.
  2. No spikes in new cases as a result of the easing of lockdown measures.
  3. Governments continue to progress towards fully opening economies and borders.

Last week, we saw a number of countries including Hong Kong and the UK reintroduce containment measures. Hopes of progress towards a vaccine had limited the damage last week. In the week ahead, however, the numbers will need to ease off to avoid spooking the markets.

At the time of writing, the total number of coronavirus cases stood at 17,981,937. Monday to Saturday, the total number of new cases increased by 1,782,490. Over the same period in the previous week, the total number had risen by 1,531,149.

Monday through Saturday, the U.S reported 447,236 new cases to take the total to 4,762,945. This was up marginally from the previous week’s 417,070

For Germany, Italy, and Spain, there were 22,814 new cases Monday through Saturday. This took the total to 793,804. In the previous week, there had been 17,083 cases over the same period. Spain accounted for 16,101 of the total new cases in the week.