Asia-Pacific Shares Finish Mostly Higher; China Central Bank Comments Ease Inflation Concerns

The major Asia-Pacific stock indexes closed mostly higher on Thursday, as investors positioned themselves ahead of the release of a U.S. consumer inflation report for May.

Japan’s Nikkei ended higher on economic rebound hopes. Hong Kong’s Hang Seng ended slightly lower as investors awaited the U.S. inflation data. South Korean stocks ended higher on foreign buying. Shares in China rose as inflation fears eased, and in Australia, technology and banking stocks were strong.

Cash Market Performance

In Japan, the Nikkei 225 Index settled at 28958.56, up 97.76 or +0.34%. Hong Kong’s Hang Seng finished at 28738.88, down 3.75 or -0.01% and South Korea’s KOSPI Index closed at 3224.64, up 8.46 or +0.26%.

China’s benchmark Shanghai Index settled at 3610.86, up 19.46 or +0.54% and Australia’s S&P/ASX 200 Index finished at 7302.50, up 32.30 or +0.44%.

Japan’s Nikkei Ends Higher on Economic Rebound Hopes

Japan’s Nikkei Index closed higher on Thursday, as shipping firms rose on prospects of more economic reopenings and drugmakers were boosted by reports of government support.

Signs that more economies are reopening amid a steady vaccine rollout underpinned shipping firms, with Nippon Yusen jumping 3.65% to be the biggest gainer on the Nikkei.

Japan plans to finish vaccinating all citizens who have applied for shots by October-November, Prime Minister Yoshihide Suga said during a debate between party leaders on Wednesday.

China Stocks End Higher as Inflation Fears Ease

China stocks ended higher on Thursday, as regulators played down inflation worries and as Sino-U.S. talks helped underpin sentiment.

China’s central bank governor said inflation is “basically under control”, and monetary policy would be kept steady, in comments a day after concerns over inflationary pressures were fanned by data showing the fastest rise in factory-gate prices in 12 years.

In other news, top U.S. and Chinese commerce officials spoke by telephone and agreed to promote healthy trade and cooperate over differences, China’s commerce ministry said on Thursday, the latest high-level exchange as the countries spar over disagreements.

Australia Shares Rise on Tech, Banking Stocks as Focus Shifts to US Inflation

Australian shares rose on Thursday, led by technology and banking stocks, while global markets closely watched for U.S. inflation data for clues on how soon the Federal Reserve will start tapering its massive stimulus.

Technology stocks were the best performers on the benchmark index, jumping 2% to close at a more than one-month high. Banks rose 0.4%, with three of the so-called “Big Four” closing in positive territory.

In commodity-related shares, domestic gold stocks recorded gains, even as bullion prices remained largely subdued, with investors turning cautious ahead of the U.S. inflation data and a European Central Bank meeting.

Energy stocks fell 1.1% and capped gains on the index, as oil prices fell on weaker-than-expected fuel demand.

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

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Strengthens Over 13917.25, Weakens Under 13741.75

June E-mini NASDAQ-100 Index futures are trading nearly flat near the cash market close on Wednesday after giving up all of its earlier gains. The technology index is expected to finish inside yesterday’s trading range, suggesting investor indecision and impending volatility.

The price action so far this week has been muted as stocks traded inside a tight range in the absence of any clear market catalysts. Meanwhile, most of the major institutions and mutual funds have been on the sidelines this week as money managers await the release of a U.S. consumer inflation (CPI) report at 12:30 GMT on Thursday.

At 19:59 GMT, June E-mini NASDAQ-100 Index futures are trading 13819.50, up 8.00 or +0.06%.

Economists are expecting the CPI to rise 4.7% from a year earlier, according to Dow Jones. In April, the CPI increased 4.2% on an annual basis, the fastest rise since 2008.

Investors will be watching the inflation data closely, with concerns that it could prompt the Federal Reserve to taper asset purchases sooner rather than later, despite the central bank having argued that higher price pressures were temporary.

Daily June E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 13917.25 will signal a resumption of the uptrend. A move through 13462.25 will change the main trend to down.

The minor range is 13462.25 to 13917.25. Its 50% level at 13689.75 is the nearest potential support level.

The short-term range is 12915.00 to 13917.25. If the main trend changes to down then look for a test of its retracement zone at 13416.00 to 13297.75.

Short-Term Outlook

Given today’s inside move, the direction of the June E-mini NASDAQ-100 Index on Thursday will be determined by trader reaction to 13917.25 and 13741.75.

Bullish Scenario

A sustained move over 13917.25 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the first main top at 14064.00.

This move would likely take place if the CPI number comes in weaker than expected since it would dampen the chances of tapering by the Federal Reserve.

Bearish Scenario

A sustained move under 13741.75 will signal the presence of sellers. It would likely take place if the CPI number came out higher than expected, increasing the odds the Fed would start seriously considering reducing its asset purchases.

The first downside target is the pivot at 13689.75. We could see a technical bounce on the first test of this level. However, if it fails, we could see an acceleration to the downside with 13462.25 the next likely target, followed by the short-term retracement zone at 13416.00 to 13297.75.

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

Asia-Pacific Shares Mixed; China PPI Higher than Expected, Japan’s Nikkei Weighed Down by US CPI Worries

The major Asia-Pacific stock indexes finished mixed but mostly lower on Wednesday, as investors assessed the impact of Chinese inflation data, while awaiting the release of Thursday’s U.S. consumer inflation report and the European Central Bank’s monetary policy decision.

Hong Kong shares ended lower after the U.S. passed a bill that poses a threat to Chinese technology. South Korean stocks finished nearly 1% lower on a technology slump and Japanese shares were pressured by cautious trading ahead of the U.S. inflation data.

Australian shares were dragged down by bank shares, and Chinese stocks rose as factory-gate data signaled a strong recovery.

Cash Market Performance

In the cash market on Wednesday, Hong Kong’s Hang Seng Index settled at 28742.63, down 38.75 or -0.13%. The South Korean KOSPI finished at 3216.18, down 31.65 or -0.97% and Japan’s Nikkei 225 Index closed at 28860.80, down 102.76 or -0.35%.

Australia’s S&P/ASX 200 Index settled at 7270.20, down 22.40 or -0.31% and in China, the benchmark Shanghai Index finished at 3591.40, up 11.29 or +0.32%.

China Shares End Higher as Factory-Gate Data Signals Recovery

China stocks ended higher on Wednesday, driven by coal and resources firms, as investors lapped up data that showed factory-gate prices in May saw their fastest annual pace in more than 12 years, implying signs of steady global economic recovery.

China’s producer price index for May jumped 9% from a year earlier, against expectations in a Reuters poll for a 8.5% increase. The country’s consumer price index in May rose 1.3% from a year earlier, lower than an expected 1.6% rise in a Reuters poll.

Hong Kong Shares End Lower as U.S. Bill on China Tech Threat Weighs

Hong Kong shares closed lower on Wednesday, dragged by tech firms after U.S. Senator passed a package of laws aimed at boosting its ability to take on Chinese technology.

The U.S. Senate voted 68-32 on Tuesday to approve a sweeping package of legislation intended to boost the country’s ability to compete with Chinese technology.

The Chinese foreign ministry on Wednesday urged the United States to stop promoting such laws and to stop depicting China as a threat.

Japan Shares End Lower on Caution Ahead of US Inflation Data

Japanese equities closed lower on Wednesday, on profit-taking in shippers and semiconductor stocks, with investors awaiting U.S. inflation data as it could influence how soon the Federal Reserve pares its stimulus program.

Financial firms and insurers declined after a retreat in long-term U.S. Treasury yields dampened the outlook for returns on their portfolios.

Eisai Co, however, surged 16.26%, rising by the daily limit for a second straight session after its Alzheimer’s drug received a nod from U.S. regulators on Monday.

“Japanese investors want to see the U.S. CPI number tomorrow, and if it’s not faster than expected, that should come as a relief to markets and could very well result in a rally,” said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui DS Asset Management.

Right now though, “there’s a strong wait-and-see attitude overall in markets,” he said, adding that investors booked profits and squared positions ahead of the data.

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

E-mini S&P 500 Index (ES) Futures Technical Analysis – Trader Reaction to 4221.25 Sets the Tone

June E-mini S&P 500 Index futures are inching higher early Wednesday on low volume, but remained within striking distance of its all-time high. The benchmark index continues to trade in a tight range as investors await the next reading on inflation to gauge if higher price pressures are just temporary as the economy continues to rebound from the pandemic-induced recession.

At 14:06 GMT, June E-mini S&P 500 Index futures are trading 4229.50, up 4.25 or +0.10%.

Health care, communications and technology stocks led positive stocks shortly into the session, with drugmaker Merck up 1.8%, Twitter up 1.7% and Adobe up 1.5%. Fox Corp. was the best performer in the S&P 500 with an advance of 2.3%.

Daily June E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 4236.75 will signal a resumption of the uptrend. A move through 4165.25 will change the main trend to down.

The minor range is 4165.25 to 4236.75. Its 50% level at 4201.00 is potential support.

The second minor range is 4142.50 to 4236.75. Its 50% level at 4189.50 is additional support.

The short-term range is 4055.50 to 4236.75. If the main trend changes to down then look for the selling to extend into its retracement zone at 4146.00 to 4124.75.

Daily Swing Chart Technical Forecast

The early inside move suggests the direction of the June E-mini S&P 500 Index is likely to be determined by trader reaction to 4221.25.

Bullish Scenario

A sustained move over 4221.25 will indicate the presence of buyers. The first upside target is 4236.75. Under normal trading conditions, this would be the trigger point for an acceleration into the record high at 4238.25.

Bearish Scenario

A sustained move under 4221.25 will signal the presence of sellers. This could trigger a break into a pair of 50% levels at 4201.00 and 4189.50. If the trading volume was average or better, taking out 4189.50 could trigger a further break into the main bottom at 4165.25.

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

EUR/USD Mid-Session Technical Analysis for June 9, 2021

The Euro is edging higher on Wednesday, bumped up by lower U.S. Treasury yields and a weaker dollar as investors looked ahead to Thursday’s U.S. inflation data and a European Central Bank (ECB) meeting.

The latest inflation data could lead the Federal Reserve to taper asset purchases sooner rather than later. The Fed has previously contended that higher price pressures are just temporary as the economy continues to rebound from the pandemic-induced recession.

Euro traders will also be monitoring Thursday’s ECB meeting to gauge the pace of the global recovery and policymakers’ thinking about paring back stimulus.

At 13:38 GMT, the EUR/USD is trading 1.2200, up 0.0027 or +0.22%.

The consumer price index (CPI) for May is set to be released at 12:30 GMT on Thursday. Economists are expecting the CPI to rise 4.7% from a year earlier, according to Dow Jones. In April, the CPI increased 4.2% on an annual basis, the fastest rise since 2008.

The ECB is expected to keep policy settings steady, but the Euro is likely to be sensitive to changes in the bank’s economic forecasts or any signal that the pace of bond buying could be reduced in months ahead.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.2254 will change the main trend to up. A move through 1.2104 will signal a resumption of the downtrend.

The minor range is 1.2266 to 1.2104. The EUR/USD is currently straddling its 50% level at 1.2185.

On the downside, the nearest support is a pair of 50% levels at 1.2159 and 1.2125.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD is likely to be determined by trader reaction to the 50% level at 1.2185.

Bullish Scenario

A sustained move over 1.2185 will indicate the presence of buyers. If buying volume increases then look for a potential surge into the nearest main bottom at 1.2254.

Bearish Scenario

A sustained move under 1.2185 will signal the presence of sellers. This could lead to a labored break with potential targets coming in at 1.2159 and 1.2125. The latter is the last potential support before the 1.2104 minor bottom.

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

Natural Gas Price Fundamental Daily Forecast – Early Trade Mixed; Midday Weather Forecasts Could Set the Tone

Natural gas futures are trading flat on Wednesday after an attempt to breakout to the upside the previous session fizzled into the close. Nonetheless, the market remains striking distance of its May 17 high at $3.204 and a longer-term top at $3.245.

Traders said that yesterday’s price spike to the upside was driven by a number of events including more supportive weather data, strong cash prices and a large dip in production.

At 12:18 GMT, July natural gas is trading $3.125, down $0.003 or -0.10%. This is a notable drop from yesterday’s intraday high at $3.198.

Today’s mixed results may be the result of a change in the weather forecasts, weaker cash prices or a recovery in production. The news is scarce early in the session. Volatility and volume are also below average, but conditions could change with the release of the afternoon weather forecasts.

Short-Term Weather Forecast

According to NatGasWeather for June 8 -14, “The central and southern U.S. will be hot with highs of 90s and 100s as high pressure rules. A slow moving weather system over the Great Lakes, Ohio Valley, and Northeast will continue to bring showers, thunderstorms, and warm highs 80s. California and the Northwest will be mild as Pacific weather systems bring showers and highs of 60s and 70s. Hot high pressure will become anchored over the West early next week as weather systems with showers sweep across the Great Lakes and East and cools highs of 60s to lower 80s. Overall, high national demand this week.”

Early Look at Energy Information Administration Storage Report

NGI’s model is calling for a 100 Bcf injection for the week-ended June 4. That would compare with a 95 Bcf build recorded a year earlier and a 92 Bcf five-year average injection.

NGI is also reporting that Energy Aspects issued a preliminary estimate for a 111 Bcf injection for the upcoming EIA report.

EIA Raises 2021 Henry Hub Natural Gas Price

The Energy Information Administration (EIA) has raised its expected average 2021 Henry Hub natural gas spot price to $3.07/MMBtu, which would come in more than $1 above the $2.03 average recorded in 2020, Natural Gas Intelligence (NGI) reported.

Daily Outlook

The fundamentals at this time are supportive, but the price action seems to be indicating that a key piece of the bullish puzzle is missing, and that’s likely to be the 10 – 15 day weather forecast. If the midday weather reports show heat during that time period then look for a late session rally.

Bespoke Weather Services said on Tuesday that the warmer trend in the most recent weather data essentially erased the cooler changes seen over the weekend. It also put June in the running for the Top Five hottest Junes on record, in terms of the national gas-weighted degree day count.

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

Oil Price Fundamental Daily Forecast – Traders Estimate EIA to Report 3.3 Million Barrel Draw

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging higher on Wednesday shortly before the release of the government’s weekly inventories report. The market surged on Tuesday after reversing an earlier loss on dampened concerns over Iranian crude oil flooding the market, a bigger than expected crude oil draw in an industry report and expectations of increased demand.

At 11:23 GMT, July WTI crude oil is trading $70.27, up $0.22 or +0.31% and August Brent crude oil is at $72.46, up $0.24 or +0.33%.

Prospect of Iranian Supplies Returning Fades

U.S. Secretary of State Antony Blinken said on Tuesday that even if Iran and the United States returned to compliance with a nuclear deal, hundreds of U.S. sanctions on Tehran would remain in place.

The trade has been cautious in recent weeks as oil investors had been assuming that sanctions against Iranian exports would be lifted and oil supply would increase this year as Iran’s talks with western powers on a nuclear deal progressed.

API’s Reported Draw Adds to Bullish Sentiment

The American Petroleum Institute (API) on Tuesday reported a draw in crude oil inventories of 2.108-million barrels for the week ending June 4. Analysts had predicted a draw of 2.036 million barrels for the week.

The API also reported a build in gasoline inventories of 2.405 million barrels for the week ending June 4 – on top of the previous week’s 2.51-million-barrel build. Analysts had expected a much smaller build f 698,000-barrel for the week.

Distillate stocks saw an increase in inventories this week of 3.752 million barrels for the week, on top of last week’s 1.585-million-barrel increase.

Cushing inventories fell this week by 420,000 barrels.

Energy Information Administration Sees Increased Fuel Consumption

On Tuesday, the EIA forecast fuel consumption growth this year in the United States, the world’s biggest oil user, would be 1.49 million barrels per day (bpd), up from a previous forecast of 1.39 million bpd.

Recent traffic data suggests travelers are hitting the roads as restrictions ease, ANZ Research analysts said in a note, pointing to TomTom data which showed traffic congestion in 15 European cities had hit its highest since the coronavirus pandemic began.

“The widespread faith that oil demand growth will trend significantly higher in the second half of the year is paving the way forward for the price rally,” PVM analysts said.

Daily Outlook

At 14:30 GMT, the U.S. Energy Information Administration (EIA) will release its inventories report. Traders are looking for a 3.3 million barrel draw in crude oil inventory. This may be enough to support the market, but bearish gasoline numbers could limit gains.

Not all of the news is bullish. Potentially dampening prices, the latest crackdown by Chinese authorities to curtail the country’s bloated refining sector could see Chinese crude imports fall by around 3% or around 280,000 barrels per day, sources told Reuters.

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

Price of Gold Fundamental Daily Forecast – Quiet Trade Ahead of US CPI Data, ECB Monetary Policy Decisions

Gold futures are edging lower on Wednesday despite the weaker U.S. Dollar and lower interest rates. The move suggests investor indecision and uncertainty ahead of Thursday’s U.S. consumer inflation report. The intraday fundamentals may not be driving prices higher, but they could be preventing an even bigger decline.

At 09:28 GMT, August Comex gold futures are trading $1890.10, down $4.30 or -0.23%.

In addition to tomorrow’s U.S. consumer price index report, traders are also awaiting key monetary policy decisions from the European Central Bank (ECB) on Thursday and from the Federal Reserve on June 16.

Traders are also showing a muted reaction to inflation data out of China and comments about interest rates from U.S. Treasury Secretary Janet Yellen on Sunday.

US Consumer Inflation Outlook

This week’s trade has been a reflection of cautious sentiment ahead of the latest inflation data from the U.S, which could lead the Federal Reserve to taper asset purchases sooner rather than later.

The consumer price index (CPI) for May is set to be released. Economists are expecting the CPI to rise 4.7% from a year earlier, according to Dow Jones. In April, the CPI increased 4.2% on an annual basis, the fastest rise since 2008.

The Fed has previously contended that higher price pressures are just temporary as the economy continues to rebound from the pandemic-induced recession.

Gold Traders Eyeing Thursday’s ECB Meeting

Besides the U.S. inflation report, gold traders will also be monitoring Thursday’s ECB meeting to gauge the pace of global recovery and policymakers’ thinking about paring back stimulus.

The ECB is expected to keep policy settings steady, but the Euro is likely to be sensitive to changes in the bank’s economic forecasts or any signal that the pace of bond buying could be reduced in months ahead.

China Producer Inflation Hits Multi-Year High

China’s May factory gate prices rose at their fastest annual pace in over 12 years due to surging commodity prices, highlighting global inflation pressures at a time when policymakers are trying to revitalize COVID-hit growth.

China’s producer price index (PPI) increased 9.0%, the National Bureau of Statistics (NBS) said on Wednesday, as prices bounced back from last year’s pandemic lows.

The PPI rise in May – the fastest on-year gain for any month since September 2008 – was driven by significant price increases in crude oil, iron ore and non-ferrous metals, the NBS said.

Analysts in a Reuters poll had expected the PPI to rise 8.5% after a 6.8% increase in April.

Yellen Speaks on Interest Rates

U.S. Treasury Secretary Janet Yellen on Sunday noted that a slightly higher interest-rate environment “would be a plus for society’s point of view and the Fed’s point of view.”

Daily Outlook

The low volume suggests a few of the major players are sitting on the sidelines ahead of Thursday’s U.S. CPI report and the ECB monetary policy decision.

We’re looking at a sideways trade with bullish investors increasingly worried pandemic-driven stimulus measures could supercharge global inflation, while bearish traders believe sharply higher inflation could force central banks to tighten policy, potentially curbing the recovery.

Until they work out that dilemma, the market is likely to remain rangebound with higher rates capping gains and high inflation putting in the floor.

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

AUD/USD Forex Technical Analysis – Struggling for Direction Inside 50% Pair at .7770 and .7711

The Australian Dollar is struggling for direction early Wednesday, as investors awaited updated U.S. consumer price data. Meanwhile, dovish comments from the Reserve Bank of Australia (RBA) helped nudge 10-year yields to their lowest since February at 1.525%. In other news, Wespac analysts continued to express surprise in the lack of upside movement by the Aussie given the rise in commodity prices.

At 05:23 GMT, the AUD/USD is trading .7740, up 0.0003 or +0.03%.

Volume remains below average with most of the major institutions on the sidelines ahead of Thursday’s U.S. inflation report with most expecting the Federal Reserve, which meets on June 15-16, to consider the rise in inflation as transitory when it comes to policy tapering.

RBA Assistant Governor Chris Kent on Wednesday downplayed the risks of inflation domestically and globally noting inflation expectations had only returned to where they were a few years ago.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7774 will change the main trend to up. A move through .7646 will signal a resumption of the downtrend.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is resistance. This zone has stopped several rallies the past few months.

The short-term range is .7532 to .7891. Its retracement zone at .7711 to .7669 is potential support. This area has stopped several breakdown attempts over the past few months.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to the main 50% level at .7770.

Bullish Scenario

A sustained move over .7770 will signal the presence of buyers. If it creates enough upside momentum then look for buyers to take out the main top at .7774. This will change the main trend to up. Extending the rally through this level could lead to eventual tests of main tops at .7796 and .7814 as well as the main Fibonacci level at .7826. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under .7769 will indicate the presence of sellers. This could trigger a break into the short-term 50% level at .7711. If this potential support fails to hold then look for the selling to possibly extend into the short-term Fibonacci level at .7769 over the short-run.

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

E-mini S&P 500 Index (ES) Futures Technical Analysis – Minor Reversal Top Signals Lack of Buyers

June E-mini S&P 500 Index futures are inching lower shortly after the cash market close on Tuesday, giving up earlier gains in the process. The price action suggests traders are looking for a catalyst, but with the major institutional investors sitting on the sidelines ahead of Thursday’s U.S. consumer inflation report, we’re likely to see similar lethargic activity on Wednesday.

At 20:46 GMT, June E-mini S&P 500 Index futures are trading 4223.75, down 1.75 or -0.04%.

Volume was below average for a second day, while the CBOE volatility index, a measure of investor anxiety, touched its lowest level in over a year.

Daily June E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, the late session price action suggests momentum may be getting ready to shift to the downside.

A trade through 4236.75 will signal a resumption of the uptrend. A move through 4165.25 will change the main trend to down.

A lower close will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a two to three-day correction.

The minor range is 4165.25 to 4236.75. Its 50% level at 4201.00 is the first downside target.

The second minor range is 4142.50 to 4236.75. Its 50% level at 4189.50 is another potential downside target.

The short-term range is 4055.50 to 4236.75. If the main trend changes to down then look for a break into its retracement zone at 4146.00 to 4124.75.

Daily Swing Chart Technical Forecast

The direction of the June E-mini S&P 500 Index into the close will likely be determined by trader reaction to 4225.50.

Bullish Scenario

A sustained move over 4225.50 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible retest of 4236.75.

Bearish Scenario

A sustained move under 4225.50 will signal the presence of sellers. This could trigger a labored break into a pair of 50% levels at 4201.00 and 4189.50.

Side Notes

A close under 4225.50 will form a daily closing price reversal top. If confirmed on Wednesday, this could trigger a 2 to 3 day correction that could lead to a change in trend if the selling volume is strong enough.

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

Crude Oil Price Update – Testing More than Two-Year High after Reversing Earlier Losses

U.S. West Texas Intermediate crude oil futures are trading higher late in the session on Tuesday after reversing earlier losses. The market is also testing its highest level in more than two years after the top U.S. diplomat said that even if the United States were to reach a nuclear deal with Iran, hundreds of U.S. sanctions on Tehran would remain in place.

That could mean additional Iranian oil supply would not be re-introduced into the market soon, which lifts one of the worries that may have been weighing on prices earlier in the session.

At 20:03 GMT, July WTI crude oil is trading $70.23, up $1.00 or +1.44%. This is up from an intraday low of $68.47.

Daily July WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out Monday’s closing price reversal top at $70.00. A trade through $61.56 will change the main trend to down.

The minor trend is also up. The new minor bottom is $68.47. A trade through this level will change the minor trend to down and shift momentum to the downside.

The minor range is $65.25 to $70.27. Its retracement zone at $67.76 to $67.17 is the nearest support.

The main range is $61.56 to $70.27. Its retracement zone at $65.92 to $64.89 is controlling the near-term direction of the market.

Both retracement zones will move up as the market moves higher.

Daily Swing Chart Technical Forecast

The direction of the July WTI crude oil market into the close on Tuesday will be determined by trader reaction to $69.23.

Bullish Scenario

A sustained move over $69.23 will indicate the presence of buyers. Taking out the intraday high at $70.27 will indicate the buying is getting stronger. This could create enough upside momentum to drive the market into $72.00.

Bearish Scenario

A sustained move under $69.23 will signal the presence of sellers. This could trigger a break into the minor bottom at $68.47. If this price level fails as support then look for the selling to possibly extend into the minor support zone at $67.76 to $67.17.

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

Gold Price Futures (GC) Technical Analysis – Strengthens Over $1899.20, Weakens Under $1886.80

Gold futures are inching lower late in the session on Tuesday as a firmer U.S. Dollar countered a drop in U.S. Treasury yields as investors looked ahead to U.S. inflation data that could influence the Federal Reserve’s timeline to taper monetary support.

At 19:02 GMT, August Comex gold futures are trading $1896.10, down $2.70 or -0.14%.

The two-sided trade the past several sessions indicates that gold traders may have mixed feelings about the direction of the Fed ahead of next week’s U.S. Federal Reserve monetary policy meeting on June 15-16.

Stronger-than-expected consumer inflation data on Thursday could drive fears that central bank policymakers will begin a move to scale back its accommodative monetary policy, driving gold prices lower.

Daily August Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since Friday’s closing price reversal bottom.

A trade through $1919.20 will change the main trend to up. A move through $1855.60 will negate the closing price reversal bottom and signal a resumption of the downtrend.

On the upside, the near-term resistance is $1899.20. The longer-term resistance is $1899.20 to $1951.30.

The minor range is $1919.20 to $1855.60. Its 50% level at $1886.80 is support.

Short-term 50% support comes in at $1865.00 and $1838.00.

Daily Swing Chart Technical Forecast

The direction of the August Comex gold market into the close on Tuesday is likely to be determined by trader reaction to $1899.20

Bullish Scenario

A sustained move over $1899.20 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into $1919.20. This is a potential trigger point for an acceleration to the upside with $1951.30 the next likely upside target.

Bearish Scenario

A sustained move under $1899.20 will signal the presence of sellers. The first downside target is $1886.80. Taking out this level could trigger an acceleration to the downside with the next targets coming in at $1865.00 and $1855.60.

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

Natural Gas Price Fundamental Daily Forecast – Prices Surge after European Model Shows Rising Cooling Demand

Natural gas futures are up sharply at the mid-session on Tuesday following the release of the European Weather model report that showed rising cooling demand expectations.

After posting a weak performance on Monday, prices began to stabilize and move higher during Tuesday’s pre-market session before soaring shortly after the regular session opening at 12:00 GMT. The catalyst behind the price surge was the European weather model that showed a large increase in projected cooling degree days (CDD), analysts at EBW Analytics Group said.

At 15:34 GMT, July natural gas is trading $3.190, up $0.120 or +3.91%.

EBW Reports Potentially Bullish Weather Development

“Overnight, the European model kept its late-day gains, and the American, while still cooler, posted its own large gain,” the EBW analysts said. “With both models now warmer than during the regular trading session yesterday, the July contract is poised to rise further this morning.”

NatGasWeather Adds 7 CDDs

According to NatGasWeather, the American weather model added 7 CDD in its overnight run. However, the model showed a pattern that “still wasn’t quite hot enough June 15-20 due to a barrage of weather systems tracking across the Great Lakes and East,” the firm said. “…It’s this rather comfortable pattern over the Great Lakes and eastern third of the U.S. June 15-20 that makes the pattern not as impressive as needed to be considered solidly bullish. But it’s apparently hot enough to satisfy, with prices at multi-week highs.”

Early Look at Energy Information Administration Storage Report

NGI’s model is calling for a 100 Bcf injection for the week-ended June 4. That would compare with a 95 Bcf build recorded a year earlier and a 92 Bcf five-year average injection.

NGI is also reporting that Energy Aspects issued a preliminary estimate for a 111 Bcf injection for the upcoming EIA report.

Issues that Could Cap Gains

Production and liquefied natural gas feed gas demand levels are “the most bearish they’ve been in more than a month,” NatGasWeather said. After this week’s heat it’s “debatable” whether the temperature outlook is “hot enough” given the cooler projections from the American model starting around mid-June.

Daily Outlook

The market is trading on the strong side of a retracement zone at $3.089 to $3.054, making this area new support. It has also put the market in a position to challenge its most recent main top at $3.204. Taking out this level will change the main trend to up with $3.245 the next likely upside target.

The longer-term chart indicates that $3.245 is a potential trigger point for an acceleration to the upside with $3.417 the next major target.

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

Oil Price Fundamental Daily Forecast – Short-Term Setback May Be Sign Price is Ahead of Fundamentals

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower on Tuesday, but well off its lows. The move represents continuation selling pressure following yesterday’s technically bearish closing price reversal chart pattern. The fundamentals haven’t changed, which suggests the price action is probably related to profit-taking.

At 13:38 GMT, July WTI crude oil is at $69.08, down $0.15 or -0.22% and August Brent crude oil is at $71.24, down $0.25 or -0.35%.

We’re not too surprised by today’s pullback. After all, WTI prices reached $70 a barrel last week, which some analysts believe will be a fair price later in the year, once the economy is running on nearly all cylinders, so let’s just say the market may have gotten a little ahead of itself and a correction was necessary.

Several other factors may also be encouraging bullish traders to lighten up on the long side. They include the renewed talks between the United States and Iran, a drop in China’s crude imports and a stronger U.S. Dollar.

Negotiations between the U.S. and Iran opens up the possibility of the lifting of sanctions on the rogue nation and the release of about 500,000 to 1 million barrels of oil per day.

Data showing China’s crude imports were down 14.6% in May on a year basis also weighed on prices. Heavy Chinese refinery maintenance in May also contributed to the decline.

“China was taking advantage of low oil prices a year ago, so the base is uncharacteristically high,” oil brokerage PVM noted.

A stronger U.S. Dollar is a possible threat to foreign demand because oil is a dollar-denominated commodity. The dollar could strengthen over the near-term if next week the Federal Reserve announces that it will be considering tapering of bond-buying stimulus program.

Short-Term Outlook

Later today at 20:30 GMT, the American Petroleum Institute (API) will release its latest crude oil and fuel inventories report. Traders are looking for a drawdown. Of major importance, in my opinion, will be the gasoline inventories number. Since the U.S. summer driving season started on May 31, traders are expecting to see a drawdown in gasoline inventories because of stronger demand.

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

Price of Gold Fundamental Daily Forecast – Edging Higher Despite Uncertainty Over CPI, Fed Tapering Decision

Gold futures are trading higher for a third session on Tuesday as buyers continue to claw back last Thursday’s steep decline. The price action suggests investors may be betting on higher-than-forecast inflation in Thursday’s U.S. consumer inflation report and perhaps a dovish Federal Reserve in next week’s central bank monetary policy decision.

At 12:37 GMT, August gold is trading $1905.50, up $6.70 or +0.35%.

Despite our bullish assessment, we are concerned about the low trading volume. Some of the major players may be sitting on the sidelines ahead of Thursday’s CPI report, thereby allowing a few aggressive traders to push prices around. We respect the move, but are being cautious about buying strength because of the possibility of whipsaw price action.

Earlier in the session, gold was pressured as a stronger U.S. Dollar dimmed appetite for bullion. These investors were likely betting on the Fed offering clues in next week’s monetary policy statement about when the central bank would begin tapering its monetary stimulus.

Gold is likely to be influenced by several factors this week, but ultimately, next week’s Fed decision should set the near-term tone.

One factor steering the price action is the U.S. Dollar. I think it’s important to note that speculators decreased their net short dollar positions in the latest week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday. Gold could be pressured if this trend continues.

Gold traders are also monitoring the consumer price estimates ahead of this week’s report to see if there are any drastic changes. On Thursday, June 10, investors will get the opportunity to react to the latest CPI and Core CPI reports. Consumer inflation for May is expected to have risen by 0.4%, down from 0.8% in April. Core CPI is expected to have risen by 0.4%, down from 0.9% in April.

Market participants also took stock of U.S. Treasury Secretary Janet Yellen’s comments that President Joe Biden’s $4 trillion spending plan would be good for the U.S., even if it contributes to rising inflation and results in higher interest rates.

Finally, in addition to Thursday’s U.S. consumer inflation report, on investors’ radar is the European Central Bank’s (ECB) policy meeting, scheduled for the same day. This is important because it could influence the direction of the U.S. Dollar.

Short-Term Outlook

We’re still of the opinion that if the CPI numbers come out higher than expected once again, the debate about an earlier Federal Reserve exit from its accommodative monetary policy could flare up again. This would drive up Treasury yields, and pressure gold prices, at least in the short-run. Additionally, the U.S. Dollar would likely appreciate.

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

EUR/USD Mid-Session Technical Analysis for June 8, 2021

The Euro is edging lower on Tuesday as investors moved into the U.S. Dollar ahead of U.S. inflation data due later in the week. The price action suggests investors are still sitting on the fence ahead of next week’s Federal Reserve monetary policy meeting even after last Friday’s softer-than-expected U.S. jobs report somewhat dampened concerns over early tapering of the central bank’s bond-buying stimulus.

At 11:54 GMT, the EUR/USD is trading 1.2178, down 0.0012 or -0.10%.

Daily EUR/USD

Euro Zone Economic Dip Milder than Expected in First Quarter

The Euro Zone economy contracted by much less than expected in the first quarter of the year, revised data from the EU’s statistics office showed, with a buildup of inventories and investment offset by reduced consumer spending, Reuters reported.

Eurostat said gross domestic product in the 19 countries sharing the Euro contracted 0.3% quarter-on-quarter for a 1.3% year-on-year decline. These compared with estimates three weeks ago of respectively -0.6% and -1.8%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the closing price reversal bottom on June 4.

A trade through 1.2254 will change the main trend to up. A move through 1.2104 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor range is 1.2266 to 1.2104. The EUR/USD is currently straddling its 50% level at 1.2185.

The first short-term range is 1.2052 to 1.2266. Its 50% level at 1.2159 is potential support.

The second short-term range is 1.1986 to 1.2266. Its 50% level at 1.2125 is another potential support level.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Tuesday is likely to be determined by trader reaction to 1.2185.

Bullish Scenario

A sustained move over 1.2185 will indicate the presence of buyers. If this move can create enough upside momentum, we could see a test of 1.2254 over the short-term.

Bearish Scenario

A sustained move under 1.2185 will signal the presence of sellers. The first downside target is 1.2159. Taking out this level could trigger a dip into 1.2125. If this level fails then look for a retest of the minor bottom at 1.2104. This price 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.

USD/JPY Fundamental Daily Forecast – Japan Upgrades First Quarter GDP, but Economy Still in Contraction

The Dollar/Yen is trading higher early Tuesday after a minor setback the previous session. There was domestic news overnight, but most of the price action the past two sessions has been primarily position-squaring ahead of Thursday’s U.S. consumer inflation report.

At 07:58 GMT, the USD/JPY is trading 109.523, up 0.267 or +0.24%.

Currently the Forex pair is trading inside a technical retracement zone at 109.223 to 109.634. This suggests it has found the “sweet spot” on the chart, where it’s not “too hot, or not too cold”.

Since late May the Dollar/Yen has found strength on the notion that the Federal Reserve would begin discussing tapering its bond purchase stimulus. However, since last Friday’s steep drop, it has settled into a range.

Friday’s U.S. non-farm payrolls miss seems to have cooled the idea that the economy was heating up enough for policymakers to make some sooner-than-anticipated changes.

By becoming rangebound, Dollar/Yen traders are saying they are not too sure about the Fed’s next move ahead of the central bank’s two-day meeting on June 15-16. Thursday’s U.S. consumer price index report is expected to shed some light on the Fed’s next move.

On Thursday, June 10, investors will get the opportunity to react to the latest CPI and Core CPI reports. Consumer inflation for May is expected to have risen by 0.4%, down from 0.8% in April. Core CPI is expected to have risen by 0.4%, down from 0.9% in April.

Japan Economic News

Japan’s economy shrank less than initially reported in the first quarter on smaller cuts to plant and equipment spending, but the coronavirus pandemic still dealt a huge blow to overall demand.

The economy shrank by an annualized 3.9% in January-March, not as bad as the preliminary reading of a 5.1% contraction, but still posting the first fall in three quarters, Cabinet Office data showed Tuesday.

The reading, which beat economists’ forecast for a 4.8% decline, equals a real quarter-on-quarter contraction of 1.0% from the prior quarter, versus a preliminary 1.3% drop.

Other data showed growth in bank lending slowed sharply in May, while real wages posted the biggest monthly jump in more than a decade in April, in signs that the world’s third-largest economy was gradually overcoming last year’s pandemic hit.

Additionally, capital spending shrank 1.2% from the prior quarter, better than a preliminary 1.4% decrease, and matching the median forecast for a 1.2% loss. Government consumption fell 1.1%, a smaller drop than a preliminary 1.8% decline.

Finally, private consumption, which makes up more than half of gross domestic product, dropped 1.5% from the previous three months, worse than the initial estimate of a 1.4% drop.

Daily Outlook

With Treasury yields expected to remain rangebound throughout Tuesday’s session, we’re expecting more sideways trading in the USD/JPY. If there is going to be intraday volatility, the source is likely to be the U.S. JOLTS Job Openings report.

It is expected to come in at 8.18 million versus the previously reported 8.12 million. The 0.6 million increase in job openings is actually good for the U.S. Dollar because it suggests a growing economy.

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

Technical Analysis in the Forex Markets

Traders apply technical analysis to the Forex markets because they believe that exchange rates are not always determined by economic fundamentals like central bank activity, prices and interest rates. Although long-term trends in the Forex markets are likely caused by these fundamental events, it seems that Forex traders are driven to use technical analysis because of the volatility and leverage offered by the various Forex markets.

Despite being a separate asset class, technical analysis when applied to Forex markets is no different than technical analysis used to analyze equities or futures markets. How Forex markets trade, how orders are executed, leverage and the hours the markets are open has a lot to do with how to apply technical analysis to Forex markets, but basically the same oscillators and indicators relevant to equities and futures markets apply to Forex markets.

Forex Technical Analysis – The Basics

It is generally accepted that there are three branches of technical analysis. These three areas are: sentiment indicators, flow-of-funds, and market structure indicators.

Sentiment indicators deal with the action of different market participants such as central and commercial banks. The idea behind using this information as an indicator is that their actions may represent major turning points.

Flow-of-Fund indicators analyze the financial positions of various investor groups. Basically they keep track of who is buying and who is selling. This may include tracking cash positions of the major foreign currency players.

The last branch of technical analysis and the one that we are mainly concerned about in this article deals with market structure or the character of the market indicators. These indicators include moving averages, price patterns, trendlines and oscillators.

Why Study the Trend?

The basic principle of technical analysis is the trend. In order to understand the trend, the technical trader must first define trend, know why the trend is important, and distinguish between major and minor trends.

There is no question that markets trend. Traders and investors hope to buy a Forex pair at the beginning of an uptrend at a low price, ride the trend, and sell the currency pair when the trend ends at a high price.

Trends exist in all lengths, from long-term trends that occur over decades to short-term trends that occur or 1-minute or tick charts. Trends of different lengths tend to have the same characteristics. In other words, a trend on the monthly chart will behave the same as a trend on a five-minute chart. One key to understanding trends is for the investor to choose the trend which is most important for them based on their investment objectives, their personal preferences, and the amount of time they can devote to watching the market action.

Trend traders tend to have 20/20 hindsight since past trends are easy to spot. Trading trends would be easy if the investor could spot a new trend at a bottom, buy and then exit at the top. This does not happen of course in practice since investors may be too early or too late in spotting optimal entries and exits. This is the reason for studying charts, moving averages, oscillators, support and resistance as well as other important technical tools.

Investors need to determine when a trend is beginning and ending as early as possible. This sounds simple but remember that technical analysis is not fortune telling so trend trading ideas may not perfectly predict the future. The idea is to use the indicators in the investor’s toolbox to find opportunities that under the right conditions could generate a successful trade. Investors should also be aware that under certain market conditions, these technical tools may not work. Trends can change suddenly and without warning. This is why investors should be aware of the risks and protect themselves against such occurrences.

The basic trend trading strategy involves two things:  first the investor must decide where to enter a position and second, where to exit. The entry is often easier than the exit. When exiting a position, the investor must choose when to exit to capture a profit, and when to exit to protect against a loss. The key is to make the right decisions at the right price levels in order to avoid giving back profits and to protect against large losses.

One of the great advantages in studying the trends of markets is that technical analysis involves analyzing prices. Knowing prices can help an investor know when something is either right or wrong with an investment. At the same time, risk of loss can be determined ahead of time. This ability is unique to technical analysis. Because actual risk can be determined, investors can practice money management principles to further lessen the risk of financial “ruin”.

In summary, technical analysis can be used by the investor to determine the trend, when it is changing, when it has changed, when to enter or exit a position. When trend trading, the basic premise is: when analysis of the trend is wrong, exit the position.

What is a Trend?

Simply stated, a trend is a series of higher-tops and higher bottoms or lower-tops and lower-bottoms. Of course, higher-tops and higher-bottoms indicate an uptrend and lower-tops and lower-bottoms indicate a downtrend. Recognizing when a trend is beginning or ending is most important to the trader.

If one cannot make sense of the chart, then the best thing to do is stay out of the market until an easily identifiable trend can be determined. Trends vary in terms of length and magnitude so it is important to the investor that the trend be recognized early and long enough for the investor to take advantage of it.

Basic Trends

In order to be a successful trend trader, the investor must know why identifying trends is important. In addition, they must be able to recognize an uptrend, downtrend and a trading range. The concept of support and resistance is also important to the trend trader. Finally, the trend trader must be aware of the major methods for determining trends as well as the major signals that a trend is reversing.

As an investor, you must know why identifying trends is important. Firstly, it allows one with a minimum amount of risk of error to determine at its earliest time when a trend has begun. Secondly, trend trading allows the trader to select and enter a position in the direction of the current trend either up or down. Finally, trend trading allows the investor to exit when the trend is changing.

Trend Indicators

Trend Indicators are used to follow the trend of the market. Following is a list of the main trend indicators used by most technical analysts and explanations on how to use them. These trend indicators are also found in most market analysis software packages like the MT4, eSignal and TradeStation platforms.

Trend Indicators:

Average Directional Movement Index
Accumulation Swing Index
Bollinger Bands
Commodity Channel Index
Exponential Moving Average
Mass Index
Parabolic SAR
Simple Moving Average
Weighted Moving Average
Williams Accumulation/Distribution

In summary, Forex markets like all trading instruments follow trends. Because of leverage and volatility, however, traders must make adjustments to their trading style based on their use of leverage and volatility. This means finding the right time period to trade that fits their trading goals and objectives.

Once a trader is satisfied that he is using the correct time frame, then the first thing he must do is study and experiment with the various trending tools available.

The first step in becoming a successful Forex trader is to learn to trade the trend. The trend to follow will be determined by a trader’s personal preference for a particular time period.

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Needs to Hold 13625.00 to Sustain Upside Momentum

June E-mini NASDAQ-100 Index futures are testing the high of the session shortly after the cash market closed slightly better on Monday. Volume was well below average as investors searched for a catalyst to drive the price action after Friday’s U.S. Non-Farm Payrolls report and ahead of Thursday’s U.S. consumer inflation reports. Both of which could influence the Fed’s monetary policy decision on June 16.

At 20:37 GMT, June E-mini NASDAQ-100 Index futures are trading 13813.00, up 46.25 or +0.34%.

In other news, prices may have been capped by concerns over corporate taxes. The Group of Seven (G7) advanced economies agreed on Saturday to back a minimum global corporate tax rate of at least 15%, a move Treasury Secretary Janet Yellen called a “significant, unprecedented commitment” to bring what she called a race to the bottom on global taxation.

Daily June E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. Monday’s higher-high reaffirmed the uptrend. A trade through 13462.25 will change the main trend to down.

The minor trend is also up. A move through 13818.00 will reaffirm the minor trend.

The short-term range is 14064.00 to 12915.00. The index is currently trading on the strong side of its retracement zone at 13625.00 to 13489.50, making it a support area.

The minor range is 12915.00 to 13773.00. If the main trend changes to down then its retracement zone at 13344.00 to 13242.75 will become the primary downside target.

Short-Term Outlook

We expect to see more of the same trade on Tuesday with volume below average and a slight bias to the upside. Investors appear to be neutral on inflation and don’t seem to be worried about the possibility of Fed tapering since if approved, it won’t begin until about January 2022. Furthermore, the Fed isn’t expected to begin raising rates until January 2024.

Look for the upward tone to continue on a sustained move over 13625.00, and for a downside bias to begin on a sustained move under 13489.50.

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

Gold Price Futures (GC) Technical Analysis – Trading Just Under $1899.20 – $1951.30 Major Retracement Zone

Gold futures are inching lower on Monday, pressured by firming U.S. Treasury yields, but supported by a weaker U.S. Dollar. Volume is extremely low, which is helping to minimize volatility after whipsaw action last Thursday and Friday.

The below average volume could be a sign that some of the bigger players have already moved to the sidelines ahead of key inflation readings on Thursday that could offer clues on the Federal Reserve’s monetary policy going forward. The Fed holds its next two day meeting on June 15 – 16.

At 14:49 GMT, August Comex gold is trading $1895.20, up $3.20 or +0.17%.

On Thursday, June 10, investors will get the opportunity to react to the latest CPI and Core CPI reports. Consumer inflation for May is expected to have risen by 0.4%, down from 0.8% in April. Core CPI is expected to have risen by 0.4%, down from 0.9% in April.

Daily August Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $1855.60 will signal a resumption of the downtrend. Taking out $1919.20 will change the main trend to up.

The major resistance is the long-term retracement zone at $1899.20 to $1951.30.

The minor range is $1854.40 to $1919.20. The market is currently straddling its 50% level at $1886.80.

The short-term range is $1810.70 to $1919.20. Its 50% level at $1865.00 is potential support. Additional support levels come in at $1838.00, $1822.40 and $1799.30.

Daily Swing Chart Technical Forecast

The direction of the August Comex gold futures contract into the close on Monday is likely to be determined by trader reaction to $1886.80.

Bullish Scenario

A sustained move over $1886.80 will indicate the presence of buyers. The first upside target is the major 50% level at $1899.20. Sense the main trend is down, sellers could come in on the first test of this level. Taking out this level could trigger an acceleration to the upside with $1919.20 the next major target.

Bearish Scenario

A sustained move under $1886.80 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into $1865.00 then $1855.60.

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