The US dollar is extending its decline from the 20.0000 area against the Mexican peso on Wednesday, as investors are waiting for news from the Federal Reserve later in the day.
On Wednesday, the Federal Reserve is expected to maintain its interest rates at 0.25 percent. However, all eyes are focused on the statement and post-decision press conference hosted by the Fed’s chairman Jerome Powell.
The experts are looking for clues on how the economy in the US is doing, as well as the effects of high inflation rates on interest rates. Additionally, they will be watching tapering plans.
Any lack of tapering talk or actions regarding inflation will push the dollar down.
TD Securities analysts anticipate that Powell will say the recovery is keeping its momentum and even expect more success.
“Powell will likely acknowledge that the Committee has begun discussions about tapering plans, but that reaching the standard of “substantial further progress” remains a ‘ways off’.” The bank added that the “market priced for a cautiously optimistic outlook, but could bear flatten on a hawkish message.”
In the same line, economists at UOB expect “the Fed to keep its current policy stance unchanged in the July FOMC and the Jackson Hole Symposium (26 August) could see the first hint of taper, and we expect the first taper to be done in December 2021.”
USD/MXN remains under bearish pressure
Due to this scenario, the USD/MXN closed Tuesday its fifth consecutive day with a decline, and while the pair is trading sideways on Wednesday, the Fed’s message would push the dollar lower, giving the Mexican peso more room to move.
The USD/MXN currency pair lost 1.30 percent since reaching a peak of 20.1122 on July 21. It has now tested its 200-day moving average, which is now at 19.9770. If the pair manages to break below that level, it will face support at 19.90, where a dynamic uptrend support coming from June 9 lies.
Next supports are identified at 19.80, July 13 low, and the 19.74 level, which is July 2 minimum. Then, the 2021 lows area at 19.55 would be exposed.
A close above the 20.00 area would provide bulls with reasons to believe there is any upside potential. However, fundamental and technical factors continue to point south.
TESLA looks bullish with a potential break to $1,111,50; TSLA ETP to enhance profits
Dear traders, the article below will present my insights on TESLA (NASDAQ: TSLA) and Volkswagen (OTCMKTS: VWAGY) stocks. I will also explain how you can benefit from trading the ETPs.
Tesla Stock Trading Idea Explained
Many traders have been asking me different questions time and time again. Is Tesla a good stock to buy, how to short TSLA stock, what is TSLA? Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto, California. It is listed on NASDAQ under the TSLA symbol. You can also trade TSLA with a factor of 2x or 3x leverage with a listed Tesla ETP instrument.
All other questions can be answered, but before we delve deeper, we need to explain some important things regarding the evaluation of TSLA stock and the forward P/E Ratio.
Price to Earnings Ratio
Price / Earnings ratio (P/E Ratio) is also like saying, how many years of Earnings does it take to pay back the price. A company with a Price/Earnings ratio of 14 says it might take 14 Years of Earnings to repay the price. So, in short, Earnings is the amount a Company Earns for the Year. On March 31, Tesla’s PE Ratio was 1,066.98.
The normal P/E Ratio should be somewhere between 10-25, which means using today’s earnings and valuation, it would take 1066 years of Earnings to pay back the current investment. It means, therefore, the price of the stock is mainly based on Future Earnings.
The conclusion is that investors expect the Future Earnings to rise substantially on TSLA stock.
Tesla belongs to the industry where there will be competition, but the investors think it’s the lead company in this space. Still, in my opinion, it is pretty much wrong to feel this way because there are car manufacturers with over 100 years of trading experience that will also play in the Electric Vehicles space and be competitive against Tesla.
Given the current political mandate on climate change, electric vehicles would be the only ones being sold in the post year 2030, so it has a large market to play in. While Norway is already banning new internal combustion vehicles from 2025, Sweden, Denmark, the U.K., Ireland, and the Netherlands, for example, are planning this step for 2030.
I wouldn’t be surprised if Germany and France follow suit in the next few years.
Significant factors in the electric vehicle industry will be:
The demand for batteries available for the new electric vehicles
The electric car bandwagon is gathering speed. Volkswagen now says 70% of sedan and SUV sales from its namesake VW brand in Europe will be battery-electric by 2030. Investment bank UBS raises its global electric predictions to unprecedented heights. Still, mainstream forecasters don’t share this exuberance.
People think that Tesla will have a monopoly on Electric Vehicles, but in my opinion, they are wrong as major car manufacturers are planning the same thing.
Volkswagen Stock Analysis
Short Term Stock Analysis
Volkswagen (VOWG.DE) is having a strong uptrend. Shares of Volkswagen, a German car giant, have been in an uptrend ever since a Wall Street analyst raised his bank’s price target for the stock on a bullish view of the company’s electric car plans. Obviously, the EV plans for the German giant boosted the price of stocks. 271-281 is the buying zone, and we can see a lot of confluence.
If the market bounces from the zone, we should expect a re-test of M H3 356.25. Loos for a breakout of the A-B-C pattern and the move to 400.87. VOWG.DE stock, in my opinion, has a good swing potential on the H4 timeframe.
Tesla Stock Analysis
Short term stock analysis H3
In the chart above, we can see a strong uptrend. The strong uptrend goes in accordance with supporting fundamentals where investors are very bullish. TSLA stock is a “risky” stock meaning that Tesla does have investments in bitcoin. They might be using bitcoin to deal in sales, so that might be inflating their value.
The value is definitely overpriced, and if you invest in Tesla, it’s similar to investing in Bitcoin. It is a herd mentality, and traders think it will take over the giants IBM and Apple. Due to that factor, the short-term TSLA trading idea is bullish.
We can see a strong buying zone around 616.50. See the zoomed chart below.
We can easily see rising trend lines and an A-B-C bullish pattern exactly at support. Targets are 764, followed by 820 and 887. Short-term rising ABC pattern, camarilla pivot points are supportive for bulls, and buying the dips is a good scenario. At this point, we see that price wants to retest the high of 889 but judging the current momentum and the price action, we could easily see a breakout towards 1111.50. This is the strongest camarilla resistance level Q 5 camarilla. When the price hits the level, short sellers will have the opportunity to sell the stock
Trading Tesla ETPs
In the case of ETP trades on TSLA stock, we can magnify the exposure even without the need for a margin or CFD account.
As you trade it like any other stock, the entry zone 616.50 (308.00 zone in TSL2) is the zone where you might get into a magnified exposure. The advantage of trading TSLA stock with the magnified exposure allows a trader to multiply the returns of any asset, in this case, TSLA.
Let’s see the example of the above trading idea where the 616.50 zone is a buying zone. For example, let’s assume you open a trade, the ETP that trades TESLA stock, and you go with a leverage factor of 2 (TSLA2). When the Tesla share increases by 2% during a trading day, your ETP (TSLA2) will increase by 4% (excluding fees and adjustments).
Conversely, if the value of Tesla drops by 2% on any given day, ETPs offering 2x exposure will lose 4%, respectively.
Swing TSLA Trading Idea
Now, moving back to a daily chart, the situation is similar, but there is a twist. The daily, being a swing trading time frame is susceptible to fewer fluctuations than H4 or H1, we can spot a clear breakout in the trend direction. As stated above, our fundamental analysis highlights the herd mentality, and investors follow the bitcoin pattern. Buying the dips as speculation takes place that TESLA will be the global leader in electric vehicles. Let me ask you a simple thing.
At the end of the day, would you rather have a Tesla EV in your garage or a Porsche EV?
I’d have the Porsche, and the VW Group company is worth only a mere fraction compared to Tesla. VW Group is USD1355Bln market cap, PE ratio of 17.61
Tesla is USD682Bln, PE Ratio of 1112.00; that’s just crazy. The price is over-inflated, and sooner or later, this is going to burst like a bubble. Watch it.
What is an ETP
Now, let’s talk about ETPs and how they could improve your potential gains while reducing trading risks with TSLA. The ETP stands for leveraged exchange-traded products. The standard definition of the ETP* is that Exchange-traded products (ETPs) are types of securities that track underlying securities, an index, or other financial instruments.
ETPs trade on exchanges similar to stocks meaning their prices can fluctuate from day-to-day and intraday. However, the prices of ETPs are derived from the underlying investments that they track.
Main Benefits of the ETPs
There are multiple benefits of trading the ETP compared to standard stock trading. You can choose leveraged (3x, 2x) and Inverse (-1x) exposure to stocks and blue-chip companies such as Tesla, Apple, Amazon. You don’t need a margin account (no margin calls). Additionally, you can trade ETPs just like any other stock/ETF on a regulated exchange (unlike CFDs) via most major brokers.
ETPs are listed on the London Stock Exchange and Euronext in EUR, GBP, and USD, and all of the ETPs are physically backed with the underlying shares, so there is no credit risk.
Grains such as soybeans, corn, and wheat are trading with a negative note on Friday as investors are closing positions ahead of the weekend. Agricultural futures are ready to close the week with losses.
Soybean contracts down for the second day
Soybean is trading in consolidation mode after the deep decline performed on Thursday. Investors are trading in profit-taking mode ahead of the weekend.
On Thursday, soy was rejected by the 8.80 area, and it fell 1.60% to close at 8.61. On Friday, the grain attempted a recovery, but the dovish pressure was too intense, and it is now trading 0.12% down.
On the week, soybean is ready to close its third negative week in the last four, this time with a drop of 0.80% in the period. The unit has been trading in a range between 8.62 and 8.80 for a month.
Technical indicators are suggesting more room for the downside. However, the mentioned 8.62, and the 8.45 area are containing the unit.
Corn breaks below 3.56 and trades at near 4-month lows
Corn is trading negative on Friday after a brief period of consolidation on Thursday. However, the picture is really dovish and even more now that the pair broke below the 3.56 support and is trading at 3.55, its lowest level since May 13.
Currently, futures of corn are trading at 3.56, 0.63% negative on the day. Technical conditions remain bearish for the unit with the 3.50 and 3.40 areas as next support zones.
On the week, corn resumed its free-fall from 3.76 after the recovery performed the previous week. This time, corn contracts are falling 3.60% on the period. The technical picture is also very dovish.
Wheat stops two days of gains and falls on Friday
Wheat is trading down on Friday as investors are taking profits ahead of the weekend and after two days of gains. The grain is trading 0.75% down at 4.62, and it is heading to test the 4.60 area.
On the week, futures of wheat are fighting to close the period in positive, but the odds are against it as technical indicators are suggesting more declines before the end of the session. Wheat is trading 0.05% negative on the week.
Coffee on consolidation mode below 100.00
Futures of coffee has been trading in a small range between 95.00 and 98.00 during the whole week. Consequently, the unit is posting a weekly decline, but the drop is not that much. Coffee contracts have declined 1.50% in the week.
Metals such as gold and silver were trading negative on Friday on a mix of improving market sentiment and a profit booking movement ahead of the weekend. However, both metals reacted positively to the weaker than expected nonfarm payrolls data that was published today.
The same story happened with palladium and platinum that are now in recovering positions. Copper is extending its already daily gain.
U.S. job market extends its weak note
The United States created 130K new jobs in August, below the 158K expected by market and the previous data of 159K. The last month was revised 5K down from 164K.
On the other hand, the wages growth rose 3.2% in August, above the 3.1% expected by the market. However, the number is a slowdown from July’s revised 3.3% data.
The unemployment rate remained at 3.7% another month, while the participation rate of the labor force rose to 63.2% in August from 63.0% in the previous month.
Gold recovers almost all it’s daily losses after NFP
Gold reacted positively after the weak nonfarm payrolls data in the U.S. and it is recovering almost all its daily losses.
Early in the day, the metal broke below the 1,520 area and fell to test the 1,500 critical level, but after the employment report, it jumped to be traded at 1,517. Currently, the unit is trading 0.16% negative on the day at 1,516.
On the week, the metal is ready to close its second negative week in a row as the unit has not been able to break above the 1,550 area. XAU/USD needs a run above the 1,527 to close positive on the period. Meanwhile, it is posting a 0.30% weekly decline.
Silver turns positive after NFP
Silver exploded after the nonfarm payrolls data on Friday and recovered all its previous daily losses to turn positive on the day at 18.65.
Previously in the day, silver was trading down amid improved risk sentiment and profit-taking ahead of the weekend. XAG/USD fell from the 18.60 area to trade at 18.00, its lowest level since August 27.
However, the U.S. employment report ignited the pair and sent it back to 18.70, where it is trading right now with a 0.35% daily gain.
On the week, silver is ready to close its fifth positive week in a row, thought the unit is trading well below weekly highs at 19.50.
Copper negative after testing the 2.6400
Copper is trading negative on Friday as investors are closing positions around the 2.6400 area before the weekend. After testing its highest price in over a month at 2.6420, XCU/USD is now 0.25% up on the day at 2.6180.
XCU/USD is ready to close its second positive week. The base metal is posting a 3.10% weekly gain right now. It would be its best week in over six months.
Grains such as soybeans, corn, and wheat are trading down on Thursday as investors are digesting the latest AMIS crop report and optimistic news about new trade talks.
The market sentiment improved considerably on Thursday. Investors welcomed the announcement of a new round of trade talks between the United States and China in October.
However, a new crop report showing that forecast for supply in grains was lifted sharply, “mostly reflecting a massive upward revision for the US,” pushed prices down.
According to the Agricultural Market Information System market monitor for September, “world maize production has been lifted sharply in view of a massive upward revision for the US. Rice production is also seen higher while wheat production is expected to increase to a record. In the case of soybeans, a projected year-on-year decline in output is unlikely to become a concern, as overall supplies remain adequate, especially given the dampening impact of African Swine Fever on feed demand in China.”
AMIS highlighted that money managers liquidated long positions in wheat and corn, “establishing modest short holdings for both.” However, in the case of soybeans, “it added to its net short position m/m.”
Soybeans down on Thursday and lost two days of gains
Futures of soybean are trading down on Thursday as investors are digesting the latest AMIS report. Improving supply expectations and long position liquidations are pushing prices lower.
Early in the day, soybeans traded higher to 8.78, intra-day high. But the news and a rejection of that level sent the unit down to 8.65. The contract of soy is now priced at 8.65, which is 1.10% negative on the day.
Technical indicators are suggesting more declines in the short and middle term. The next support is at 8.63, followed by the 8.60 area. Be aware of stop-loss triggering below 8.60.
Corn consolidates losses around 3.59
Corn is trading positive on Thursday for the first time in the last five sessions as investors are digesting the AMIS report.
“In the US, the crop is progressing under mixed conditions across much of the corn belt due to the late sowing this season,” the report says. “Final yields will depend on how the weather performs over the next month.”
In this framework, futures of corn attempted to bounce from 3.56 per bushel, but the 3.61 level contained the unit. Corn is now trading 0.10% positive on the day at 3.58, but it is losing steam.
Wheat posts second day of gains, but it stopped its advance
Wheat is performing its second day of gains on Thursday, but recent crop report news hurt the unit and it pared gains at 4.69.
The unit is now trading at 4.66, 1.03% positive in the day. Oscillators are suggesting a turn in the direction for the unit, but the 4.64 is supporting the contract. Watch out for the 4.60 area, followed by the 4.56 and 4.50 levels for supports.
Gold and silver are trading down on Thursday as market sentiment improved on news that the US and China will talk again on October and the better than expected ADP report in the United States.
Metals are mixed on the day, gold and silver are posting losses, but copper is extending its recovery from 2-year low, while palladium and platinum are consolidating highs.
China-US trade war talks
China’s Ministry of Commerce and US top trade representatives confirmed that both countries would have a new round of negotiations in October.
“Both sides agreed they should work together and take practical actions to create favorable conditions for the negotiations,” China ministry statement said.
ADP employment better than expected
The ADP reported today better private employment conditions in August with the creation of 195K new jobs in the last month, well above the 149K expected by market. On the negative note, July data was revised 14K down to 142K.
Gold down to test 1,535
Gold is retracing from a 6-year peak as investors are digesting reports of a new round of talks between China and the United States in October.
On Thursday, XAU/USD is trading down for the first day in the week with the unit now testing yesterday’s lows around 1,535. The sentiment has changed for gold at least in the short term, and technical indicators are suggesting more room for the downside.
However, as far as the metal remains above 1,535, and the more critical 1,520 area, it remains bullish. Resistance lines remain at 1,560 and the psychological level of 1,600.
Silver trades down amid improved sentiment
Silver is falling from nearly 3-year highs at 19.54 on Thursday as investors are betting on riskier assets following the confirmation of talks between China and the United States on October.
Traders were waiting for the 19.50 as a possible selling area, and now the price hit it. Besides, the change in the sentiment provoked by the talks is suggesting a more conservative approach on metals purchases.
Currently, silver is trading 2.0% down on the day at 19.20. Technical studies suggest more room for the downside, at least in the short term. The 19.00 area is now supporting the pair. If the unit breaks below there, the next level of play will be the 18.65-75 area.
Copper recovers from 2-year lows
Copper is trading positive for the second day as the unit is extending its recovery from September 3 minimum at 2.4756, its lowest level in over two years. A set of ugly manufacturing data around the world this week pushed copper prices down; however, a weaker dollar is lifting the mineral the last days.
Currently, XCU/USD is trading at 2.6250, 1.45% positive on Thursday. Technical studies are suggesting that a bullish extension could happen in the short term. If correct, copper would find resistance at 2.6400, 2.6800, 2.7400, and finally 2.8000, July highs.
Remember that any trade war resolution would be good for copper prices, as well as any improvement in manufacturing data as the base metal is a key player in power and construction.
Palladium extends advance, ready to test double top at 1,600
Palladium is trading positive for the sixth straight day as investors are welcoming trade war talks confirmation. The unit is now testing the 1,570 area, and it has 1,600 on sight.
Technical indicators suggest that a bullish continuation is possible in the short and middle term. As mentioned above, XPD/USD will find resistance at 1,570 and 1,600. To the downside, the unit is well supported by the 1,550 and 1,500 areas.
Platinum rejects the 1,000 area and falls for the first time in three days
Platinum is trading negative on Thursday for the first time in three days as investors are pausing their purchases of the base metal due to the trade talks confirmation between the US and China.
Previously, investors jumped into the XPT/USD as an alternative for gold and silver, but as both metals are falling on Thursday, so does platinum. Technical conditions remain bullish for the metal, but it is right now overbought, so a period of consolidation is expected.
Soybeans, corn, and wheat are trading mixed on Wednesday as grain investors are digesting news from the USDA regarding crop ratings and US grain exports.
Soybeans higher amid robust export inspections
Soybeans are trading positive for the third day in a row, but the movement remains in a small range between 8.60 and 8.80. Investors welcomed news about an increase in export inspections.
The U.S. Department of Agriculture reported they inspected 1.28 million metric tons of soybeans for overseas delivery between August 23 and 29, which was a 33% increase from the previous seven days and also an increase from the 776.277 metric tonnes reported in the same period of 2018.
Soybean investors are taking the news as a signal that the demand from U.S. supplies has started to grow again.
Besides, the weekly crop report was released and showed that soybeans crop remained unchanged with a 55% rated good/excellent, which is considerably lower than the 66% a year ago. Soybean blooming and pods are also below five-year averages.
In that framework, futures of soybeans attempted a decisive run overnight, but the unit was capped at 8.74. Then, it started to fall to current levels around 8.69. Soy is currently flat on the day.
However, the odds have changed for soybeans as technical indicators are signaling a bullish extension is gaining momentum in the daily chart. The positive sentiment is even more prominent in the 1-hour chart with oscillators and moving average pointing to the upside too.
If the pair holds above the 8.68, it will recover until the 8.74 again. Then, 8.78 is waiting for the unit.
To the downside, below the 8.68, soybean contracts will find buying interest at 8.62 and 8.60.
Corn extends decline for the fourth day
Futures of corn are trading lower again on Wednesday as investors crop conditions have improved in the last week. Corn is now heading to test August 14 low at 3.58.
Corn crops were rated 58% good or excellent, above the 57% condition the previous week. According to the USDA, corn was in dough stage at 81%, well below the 93% in the five-year average.
Earlier in the day, corn was trading slightly positive, but after failing at the 3.63 level, it started to fall and it broke Tuesday’s lows at 360 and extended drops to the current 3.59. Corn is now 0.50% negative in the day, trading at lows of the session.
Technical indicators suggest that the unit is oversold so that a brief bounce could be expected. However, both the 1-hour and the daily chart suggests more dovishness.
If corn consolidates levels below 3.60, next support will be at 3.58, followed by 3.55 and 2.50. Any potential upside will need the unit to break above 3.63.
Wheat pared gains at 4.60, back to test 4.55
Futures of wheat are showing some signal of being alive with its first positive session in the last five trading days. On Wednesday, wheat is consolidating losses after the declined performed since August 28 high around 4.78.
The USDA reported that U.S. spring wheat harvest is 55% completed, well above the 78% average by this time in the previous five years.
Early in the day, wheat tested the 4.60 in an attempt to recover more ground from Tuesday minimums at 4.50. However, the unit was rejected by the 4.60 area, and contracts were sent to be traded at 4.55.
The unit is still 0.45% positive in the day, but technical indicators are signaling that the upside recovery is not too active. A retest of the 4.50 area is expected unless the unit breaks above the 4.60 resistance.
Hi FX Emperors, Canadian Billionaire and chairman of Leagold, Frank Giustra, affirmed in a recent interview that gold would explode in the future as the world is facing dark economic times ahead.
“I think we’re in the third and final phase of the gold market that’s started in 2001, and this will be the most explosive phase for gold,” Giustra told Kitco News this week.
Asked about an XAU/USD forecast, Giustra said that gold would reach 1,900 in the next months and a lot higher, but it depends on a lot of things. “It will be reckless not to have gold in your portfolio.”
According to Giustra, “the world is in uncharted waters right now. We’re living in a world with a global debt bubble, and any time you get debt bubbles of this magnitude that are global that are fueled by speculation, something’s going to happen” he said.
When is all this going to happen? Giustra said that the signal for the beginning of the bull rally in gold was the Fed’s reversal policy from hiking to lowering rates this year.
Will it explode? Certainly not today
Gold is trading negative on Wednesday as investors are cheering news from Hong Kong as leader Carrie Lam said that she will withdraw the extradition bill that sparked mass protests months ago.
On the other hand, the UK Parliament voted against the British Prime Minister Boris Johnson plan, and it opened the door for another Brexit delay. It helped the Pound and global risk interest.
Gold pared gains at 1,550
Gold is trading negative on Wednesday after two days of gains; however, the unit remains moving inside the range it has been in the last eight sessions.
The metal tested the 1,550 level overnight, but the unit was unable to break above the resistance. Then, it started to fall until it found support at 1,530 in the American morning.
XAU/USD is currently trading at 1,540, 0.53% negative on the day. The hourly chart looks bearish in the short term, but some signals of recovery are appreciated in the technical indicators.
To the upside, the unit needs to consolidate levels above the 1,540 price and then launch a new attack for the 1,550 area. Above, August 25 high at 1,555 is waiting for bulls.
To the downside, supports are at 1,530. Below there, check for more buying interest at 1,520 and the psychologic 1,500.
Silver extends rally and test prices above 19.50
Silver is trading positive for the fourth straight day on Wednesday as investors are buying the metal on a speculative movement and an alternative to gold.
Earlier in the day, XAG/USD jumped to trade as high as 19.60, near two-year highs. However, the unit couldn’t sustain gains, and silver started to consolidation to the downside.
XAG/USD found support at 19.20 and it is now testing the 19.40 area again. Currently, silver is 0.45% positive on the day at 19.35.
TD Securities head of global strategy Bart Melek believes that can be at $25 by Thanksgiving.
“Silver is catching up here. It is getting a bid from gold. The U.S. dollar fell a bit. Rates again dropped significantly, and equity markets went into flux. Essentially what it meant to us is that we will get our $19-$20 silver target quicker,” Melek told Kitco.
Melek considers that above 1,560, gold will jump until 1,600 quickly. Then, silver will be able to reach levels not seen in years. “The gold-silver ratio has taken a dramatic turn lower. A more normalized level for the gold-silver ratio is in the 60s. Silver can easily achieve $25 by Thanksgiving.”
Corn, soybeans and other soft futures such as wheat are trading down on Monday as investors are digesting the last set of tariffs on Chinese products, improved weather and supply conditions.
Soybeans start trading with a negative gap
Futures of soybeans are trading negative on Tuesday as investors are digesting improved weather forecast and concerns amid the trade war and the new set of tariffs that the United States put on play Sunday.
Soybeans are currently trading 0.60% negative in the session after opening the day with a negative gap at 8.66. Then, the unit fell to be bought as cheap as 8.59, where it found support. It is now at 8.64.
Technical indicators suggest more room for the downside with Momentum, Awesome Oscillator and MACD signaling bearish conditions in the 1-hour chart.
However, in the bigger picture, soybeans are trading in a range between 8.55 and 8.80.
Soybean investors were slightly less dovish last week as the CoT showed that net short positions were declined to 75,551 in the August 27 week from 76,820.
Corn falls for the third session and tests the 3.64 area
Corn is trading negative for the third session as the unit is testing the 3.64 area as investors are digesting improved weather conditions in the last days.
According to the CoT report, investors increased their net-short positions in corn to 96,370 in the week of August 27, the highest level in three months. Up from 82,266 the previous week.
So, with investors betting on lower prices, Corn futures look ready to break below the 3.64 area. Besides, technical indicators in the 1-hour chart are also signaling for more drops in the next few hours.
Below 3.64, corn will find support at 3.63 and then 3.60. Finally, the grain would open the door for a retest of the 3.58 area, August’s lows.
Wheat extends decline to lowest since May 16
Futures of wheat are trading down for the fourth negative day as investors are digesting reports of abundant global supplies. However, the CoT report showed that net short contracts declined to 37,330 for hard-red winter futures contracts in the week of August 27, down from 40,404 the previous week.
The trend in futures of wheat is clearly bearish with the unit extending declines steadily from the 4.77 area traded on August 29. Earlier in the day, the unit broke below the 4.62 area and after a small pullback, it extended loses to test the 4.56 level.
Currently, Wheat futures are trading at 4.57’6, which is 1.05% negative on the day. In the one-hour chart, technical indicators are mixed with oscillators going north but Momentum and moving averages signaling for more drops. So, a brief period of consolidation is expected around 4,58, but the big picture remains bearish.
Wheat will see next support at 4.53, then, 4.50 and the 4.30 area. To the upside, ZW1! is contained by the 4.60 area and then, 4.62 will act as resistance.
Gold is being underpinned by the news as another set of tariffs for Chinese products took into effect with the new month, and political problems in the United Kingdom are heading to a hard Brexit outcome; however, the USD is containing gains in the gold as it is also joining its safe-haven status.
Hey FX Emperors, as Hurricane Dorian is approaching my desk, the market is trading under pressure by different news that are hurting the sentiment.
Risk aversion is the theme of the day as investors are battling against multiple levels of uncertainty. Besides the mentioned trade war and Brexit topics, the economic uncertainty in the European Union with its German engine losing steam is fueling fears of a possible recession.
In that framework, gold and silver are trading higher, but so does the dollar index, which is trading positive for the fifth straight day. DXY is at fresh highs since May 2017 at 99.40.
Dollar is positive as the British sterling and the euro are trading down on the day. Too many uncertainties around those two currencies due to recession and fears of a no-deal Brexit. Both the Euro and Pound are trading at multi-year lows against the greenback.
Gold ready to take the 1,550 area, but there is the dollar
Gold is trading positive for the second day on Tuesday as investors are trading on risk aversion mode due to political and economic concerns. The positive side is, however, contained by a strong dollar.
The metal recovered from early losses on the day as the unit found support at 1,520 and it started to regain ground with the opening of the European session. Then, gold rallied to test the 1,535 area, where the price is now.
Gold is currently trading 0.25% positive on the day at 1,535. The unit is consolidating levels above the now critical 1,520 support. Technical conditions in the short term suggest a consolidation phase in the next hours. But the overall picture suggests additional gains.
FX Empire analyst James Hyerczyk highlights the role of US bond yields in gold’s forecast. “Gold is likely to remain underpinned on Tuesday as long as Treasury yields remain under pressure and stocks weaken. However, gains are likely to remain limited by the stronger U.S. Dollar, which tends to reduce foreign demand for dollar-denominated gold.”
If you are a bull, 1,535 is the level you need to watch, above it, 1,545 would be the next selling area. Then, August 29 high at 1,555.
To the downside, the unit is well supported by the 1,520. However, if the level is broken, 1,510 is the next frontier.
Silver extends gains to 18.70
Silver is trading positive for the third session in a row as investors are buying the metal as an alternative of gold.
Early in the day, XAG/USD traded in consolidation mode around 18.50, but with the beginning of the American morning, it broke above the 18.60 critical resistance. The unit is now moving above August 29 highs at 18.65, which is the maximum since April 2017.
Currently, silver is trading 1.20% positive on the day around 18.70.
FX Empire analyst Christopher Lewis expects more buys for the metal, “with that, I think that the market will continue to look at dips as potential buying opportunities, but I would be a bit cautious about buying up here considering that we are so overbought.”
Grains are trading mixed on Friday but with a negative note on August as investors are still waiting for trade war developments. As for now, conciliatory words between US and China are giving some hopes.
“The most important thing is to create the necessary conditions for continuing negotiations, said Gao Feng, a spokesman for China’s Commerce Ministry. However, he said that China has an arsenal of measures for retaliation. However, they don’t want to use it.
Despite the conciliatory tone, the market is reluctant to believe in everything China and the United States said, as it seems they want to have a prolonged trade war. Farmers, then, are suffering the consequences.
Soybean ready to close August with gains
Soybeans are trading positive for the third day in a row as investors welcomed conciliatory feeling between the two parts involved in the trade war. On Friday, futures of soybeans jumped to trade as high as 8.78 per bushel, but the level resisted and it sent the unit back to previous levels.
Profit-taking ahead of the end of the week and month is keeping the grain out of higher prices. Currently, soybean is trading 0.60% positive on the day at 8.73.
On the technical analysis front, odds are for a bullish extension in the short and middle terms as studies on both, the 1-hour and daily charts, are pointing to the upside.
On the week, soybean is closing the first positive period in the last three weeks. The oilseed is posting a 2.10% weekly gain, recovering almost all losses experienced in the previous two weeks.
In the monthly chart, soybean is closing August with a 0.63% gain as the unit was on time to reverse losses in the first half of the month, but the benefit is not that big. August would be the third month of gains in the last four. The monthly chart also suggests that the grain is moving in a long term range between 8.44 and 9.30.
Corn down amid profit-taking
Corn is trading down for the second day as investors are closing positions ahead of the end of the month. Early in the day, the contract attempted to break above the 3.74 level, but it wasn’t successful.
Currently, corn is trading 0.40% negative at 3.69. The unit is now testing the 3.69 area, which is the support that is containing the downside. Below there, the next frontier would be 3.66.
On the week, corn is giving signals of life as the unit is performing its first period of gains after the sell of experienced in the last three weeks. Thought the move is on a consolidation phase rather than a recovery.
The month is also an ugly picture for corn as it is closing its third negative period. The unit has now entered on full steam into the long term range traded between July 2014 and May 2019 between 3.40 and 4.00.
Wheat breaks below 4.62 and trades at lows since May
Futures of wheat are trading negative on Friday with the unit breaking below the 4.62 area and extending drops to 4.59, its lowest level since May 16.
Previously in the day, wheat traded around 4.66, but a break below the 4.64 triggered stop losses that fueled declines to 4.62, where another batch of stop losses was activated. Then, the unit found support just below the 4.60 area.
Currently, the unit is trading at 4.60, 2.50% negative on the day.
On the week, the unit is falling 3.50%, extending losses after the previous week small recovery.
On the month, wheat is falling for the second period, with August performing 5.28% down in the period. Overall, wheat is inside a downtrend with the 4.20 area as the most likely destiny.
Grains roundup for August 30
Coffee is down in the day, week, and month as futures of coffee weren’t able to break above the 98.00 area. The contract is now traded at 95.25, 2.15% down. On the week, coffee is 0.11% down after attempting a recovery that was capped at 98.50. In the bigger picture, coffee is closing August with a 3.25% decline, extending the already sell-off of 10.30% of value performed in July. Technical analysis suggests more declines in all frame times.
Sugar is having the same story of coffee with declines in the day, week, and month. The trend in the sugar futures is even more visible to the downside with prices at 11-month lows around 11.10. The unit is closing its fifth negative week in a row, and its second month with red numbers in a row. August is 8.20% negative for sugar.
Hey FX Emperors, the United States released a personal income and spending report that showed Americans are saving less. In Europe, the CPI rate declined, putting the ECB in a more complicated position.
Gold, silver, and other metals are trading sideways on Friday as investors are watching developments about the willingness that the United States and China are showing to solve their trade war.
The power of the American consumer
Economic data in the United States showed a weaker than expected personal income increase but an American consumer spending more money than previously anticipated.
Personal spending rose 0.6% in July, above the 0.5% expected by the market and the double of the 0.3% growth performed in June. However, while Americans are spending more money, they are not getting as much as expected.
Personal income rose a weak 0.1% in July, well below the 0.3% anticipated, and the 0.5% posted in the previous month.
In Europe, the Consumer Price Index rose 1.0% between August 2018 and 2019, in line with expectations, but core annual inflation was 0.9% in August, below the 1.0% expected by experts and well below the ECB target of 2.0%.
Gold is trading in consolidation mode just above the 1,520 level as the unit logged two days of declines. XAU/USD is right now at 1,527, flat on the day.
In the day, XAU/USD has been trading sideways between 1,520 and 1,530. It seems that investors did the end-month rebalancing and profit-taking on Thursday, as the unit declined from highs at 1,550 and tested the 1,520.
On the week, gold is ready to close its fifth consecutive period of wins; however, this time the weekly candlestick looks different as it is performing a Doji candle. Let’s see how it closes. As for now, gold is 0.15% positive on the week.
In the monthly chart, XAU/USD is finishing its fourth month of gains with August as its best period since February 2016. The metal is closing the period with 8.30% gains and a technical break above the 1,450 that could be key in the next few months. Now, the unit is consolidating above the 1,500 area.
Metals roundup for August 30
Silver is trading positive again after posting a daily decline on Thursday. The unit looks supported by the 18.05 area, and it is now testing the 18.50 level. Above there, the high of 18.65 is waiting for the cross.
Copper is trading negative on the last day of the week as the unit is taking a breath after four positive straight days. The unit was recovering from lows since May 2017 at 2.490 reached on August 26, and it rose until yesterday’s high at 2.5900. However, the metal was unable to break above it, and it is now 0.25% negative in the day at 1.5625.
Futures of Palladium are trading positive on the day as the unit is testing the 1,490 level, which has been acting as a short-term resistance in the last ten days. Palladium is trading inside a triangle, now testing the upper side, above there, resistances are at 1,560 and 1,600.
Platinum is extending its rally for the fourth straight day, and it is now testing the 940.00 area, its highest level since April 20, 2018. Technical indicators show an overbought metal, but it signals more room for the upside. Above it, 948.00 and 960.00 are the levels to watch.
Corn, Soybeans, and other softs futures are trading mixed as investors are booking profits ahead of the end of the month. Besides, grain traders are watching weather conditions in the Midwest of the United States.
Soybeans positive for the second day
Futures of soybeans are trading positive for the second day as investors are trading in a mix of profit-taking ahead of the end of the month, good news in the trade war and improving crop reports.
Soybeans accelerated in the last few hours to break above the 8.68 short term resistance, and it is now trading at 8.70, its highest level since August 26. Improvements in the trade war and new commercial options for US grains lifted the unit.
Currently, the oilseed is trading 0.40% positive on the day at 8.69, and the 8.70 area is working as a strong resistance. Technical indicators are still slightly bearish, but RSI and MACD are suggesting a short term bullish continuation. So, traders could expect an 8.72 test in the case the unit breaks above the 8.70 level.
Above 8.70, check for the 8.80 and 8.90 as possible buying zones.
Wheat down for the second day after performing a brief bullish recovery
Wheat is trading negative on Thursday as the unit was unable to break above the upper side of the range it has been trading in the last two weeks.
With a range between 4.66 and 4.77 acting as frontiers, wheat remains to trade in consolidation mode ahead of the end of the month, possible profit-taking and more developments on the trade war.
As reported yesterday, wheat was turning positive in the short term from sub 4.70 levels; however, it respected the range earlier on Thursday and it capped the grain’s recovery. After testing the 4.77 area, wheat was sent down to check the 4.72 area.
Now, the 1-hour chart is showing technical indicators suggesting more room for the downside, where the 4.70 area would be waiting for the pair for a new test.
In any case, remember that range’s bottom side is at 4.66, which will act as support in the case the grain flies to that part of the chart.
Corn extends recovery
Corn is trading positive for the second day as investors are closing positions ahead of the end of the month.
On Thursday, corn rallied from 3.64 intra-day low to trade as high as 3.74, its highest level since August 22. Then, the unit felt vertigo, and it started to fall to more moderate prices. It is now trading 0.40% positive at 3.72.
The 1-hour chart is now showing an increasing bearish sentiment backed by the MACD and RSI technical studies. Immediate support is at the 3.71 area, then, 3.69 and 3.66 are the levels to watch.
Hello FX Emperors! It is the latest trendy topic as China’s Ministry of Commerce spokesman Gao Feng said China wants to solve trade war with a “calm attitude.” It activated risk appetite, which sent gold down.
On the other hand, silver continues with its rally as investors are betting on the metal as an alternative of high gold prices.
China and the US maintain ‘effective’ communication
“We firmly reject an escalation of the trade war, and are willing to negotiate and collaborate in order to solve this problem with calm attitude,” Feng said Thursday, and for once, it seems to be true that both countries are willing to calm down the situation.
USD/CNY is performing its first negative day in the last eleven sessions as the pair is falling 0.20% on Thursday to its current 7.1493. However, the 7.1400 level looks like the new line in the sand for the China government.
If you believe in technical analysis, studies are now suggesting a possible correction, but technicals don’t matter here.
Feng also confirmed that the United States and China have effective communication. Coincidentally, US President Donald Trump used the “calm attitude” notion on his remarks about the Trade War earlier this week.
Gold lost all previous gains and trades down on Thursday
Gold is trading negative for the second day after investors welcomed Gao Feng commentaries on a “calm attitude” as a catalyst for risk appetite. Besides, the dollar index is trading positive for the second day.
Previously in the day, XAU/USD advanced to break a short term resistance at 1,545 and to trade at highs since August 25 at 1,550. However, Feng remarks sent the metal down. The unit is now trading 0.24% negative in the day at 1,536.
Feng words certainly motivated the movement, but it is also due to possible profit-taking ahead of the end of the month as Friday will be the last trading day of August.
Also, as FX Empire Analyst James Hyerczyk highlighted in a recent article, “with the market pricing in a 25-basis point by the Fed in September, and really only the yield curve inversion indicating a possible future recession, gold traders have no incentive to chase the market higher at current price levels, which leads me to believe the hedge funds may be taking a little off the top and booking profits.”
In the 1-hour chart, gold looks oversold with the MACD making a negative crossing. The unit is now testing the 1,533 support and consequently, the 1,530 area. Below there, the move could lead the cross to check the 1,525 level, which is the most significant support in the short term.
In the 1-day chart, technical studies are suggesting a possible correction in the XAU/USD with a test of the 1,500 area on the cards. The dynamic uptrend coming from November is acting as support at 1,504.
Below the 1,525 level, if you go short, then the XAU/USD would face support, or profit-taking, at the 1,510 area. Next, 1,500 and 1,490.
Silver extends gains to fresh highs since April 2017
Silver is trading positive for the fifth straight day as investors are betting on the XAG/USD as an alternative of high gold prices.
On the day, silver jumped to trade at highs since April 2017 at 18.65, but sentiment improvement sent the unit back down. It is currently trading 0.74% positive in the day at 18.50.
Technical studies are suggesting a short term correction that would drive the pair to the 18.40 area and then the 18.20 level.
Corn, Soybeans and other softs futures are trading down on the day as investors are trading quietly and with low volume, as they are waiting for more developments in the trade war between the United States and China.
On the other side, wheat is trading negative, but it is now giving signals of a potential u-turn in the prices. Technical indicators are suggesting that a possible bullish movement is in the making.
Soybeans break below 8.55 and accelerate losses
Futures of soybeans are trading down on Wednesday as investors are digesting improving crop conditions and trade war developments. The grain is extending is rejection from the 8.63 level touched on Tuesday and today, it broke the dynamic uptrend line at 8.60, which comes from August 27 low.
Soybeans broke below the August 23 lows at 8.55, and it is now trading at intra-day minimums at 8.53, the grains cheapest price since August 8.
With the contract now posting 0.76% daily decline, technical conditions in the 1-hour chart are suggesting more room for the downside with Oscillator and MACD pointing to the south.
The unit is now heading to the 8.50 critical support. Below there, a break of the 8.45 level will expose multi-year low of 7.90.
Corn slides a bit more, but it attempts to recover
Futures of corn are trading slightly negative on Wednesday as investors are waiting for trade war developments. On the day, corn prices found support at the 3.64 area and it started to recover ground to price at 3.65’4, which is 0.20% positive so far in the day.
The unit is now facing the short term resistance of 3.66. Technical indicators, however, are mixed but they are also suggesting that the potential downside is stronger than the upside. Also, moving averages are pointing to the south.
Corn needs a break above the 3.66 to recover some upside potential. Above there, it will face resistance at 3.69 and the 3.70 area.
On the other hand, in the case of futures of corn are not able to break above the 3.66, it will return all the way down to a retest of the 3.64 level. Then, supports are at 3.61 and 3.58.
Wheat remains inside the range, down on the day
Wheat returned to the range between 4.60 and 4.80 early in the day after a brief adventure above it. Then, the unit has been falling until it found support at 4.71 just moments ago.
Futures of wheat are now trading on recovery mode, but it is facing the 4.74 short term resistance at this moment. Currently, the unit is still 0.70% negative on the day. However, a potential bullish movement is now on the cards.
Technical conditions in the 1-hour chart are showing a possible recovery extension as Momentum and MACD are signaling a turn in the short term trend. In that case, a price consolidation above 4.70 will open the door for a new test of the upper side of the range at 4.77. Above there, 4.80 and 4.82 will be the resistances.
However, in the case the pair resumes its decline, 4.68 will be the first support, followed by the bottom of the range at 4.66 and finally the 4.62 area.
Hello FX Emperors, Wednesday started fiercely as the market is watching how yield curves are inverting further, signaling an “impending recession,” as a CNBC article said today.
Also, Goldman Sachs is forecasting that Germany will publish another negative period in the third quarter, and UK’s Prime Minister asked Queen Elizabeth II to suspend UK Parliament in an attempt to avoid a no-deal Brexit.
Would you stop our politicians, your highness? Oh wait! I am one of them…
Gold and silver are extending, even more, their rallies and now the market is asking itself where the top for metals is? According to George Milling-Stanley, Chief Gold Strategist at State Street Global Advisors, he is watching a 2011-style gold market.
Gold extends advances and tests the 1,550 area
Gold prices are trading positive on Wednesday as investors are digesting fears about recessions in both the United States and Germany. XAU/USD jumped to test the 1,550 area, but it was rejected.
Then, the metal was sent down to current levels around 1,545, which is near to the opening price. Technical conditions suggest a short term period of consolidation, but the bigger picture remains pretty bullish.
To the upside, first resistance is at 1,550, above there, please check for 1,555 area, August 25 high. Tp the downside, 1,530 is currently supporting the metal, below there, 1,525 is critical support before the 1,510 level.
Where is gold’s top?
Gold is heading to close its fifth straight week with gains. Just in August, XAU/USD advanced over 9% in a month that is heading to become the biggest monthly increase since February, and it seems the rally won’t stop anytime soon.
Chief Gold Strategist at State Street Global Advisors George Milling-Stanley affirmed in an interview with Kitco News and TheStreet, that “gold could experience 2011 all over again.”
Milling-Stanley highlights the inflows coming to the metal. “If you remember the last time we had significant speculative money coming into the market was as long ago as 2011, and speculative money flows drove the price up $500 in just 9 months. I could easily see something like that happening again.”
The analyst remarked that gold-backed ETFs have seen inflows of more than $5 billion, “with three and a half of that going into GLD alone, that I find very encouraging.”
Between February and August 2011, XAU/USD rallied an astonishing 45% from 1,330 to 1,910, near its all-time high.
Silver extends gains
Silver is trading positive for the fourth day in a row. Investors are taking the metal as an alternative from an already high gold. On Wednesday, XAG/USD jumped to test the 18.50 area, its highest level since April 17, 2017.
Now, the pair is trading in consolidation mode around 18.40, which is 1.05% positive in the day. Technical studies suggest more room for the upside, but the bears seem to be defending the 18.50 actively.
To the upside, the next resistance is at 18.70, then, the psychological 19.00, and 19.75. As for the downside, 18.30 is currently supporting the upside, so a break below that number would open the door for a test of the 18.10 area.
Corn, soybeans, and other softs futures in review as investors are digesting news about the trade war and improving crop conditions in the United States.
Early in the day, soybeans, wheat and corn traded sideways or negative but grains recovered ground in an improved sentiment. However, rising USD/CNY is adding more risks to farmers’ sales to China due to an expensive dollar.
Crops are improving. USDA says
According to the latest USDA Crop Progress Report, corn condition improved to 57% of crops rated good to excellent, better than the 56% reported a week ago. 71% of corn entered the dough stage, significantly lower than 87% on average at this time in the last five years.
Soybeans’ crop is rated 55% good or excellent, an improvement from the 53% published the previous week. 94% of soybean crops are blooming, lower than the 99% five-year average.
Spring wheat was rated 38% complete, well below the five year average of 65% at this time of the year.
Soybeans recover ground but remain negative on Tuesday
Soybeans are trading negative on Tuesday, but it is giving some signs of recovery in the American morning.
As expected yesterday, futures of soybeans bounced back at the 8.61 area to take almost 1.0% in profits around the 8.70 resistance area. After that, the unit resumed its downtrend until it found support at 8.58 per bushel on Tuesday.
Currently, the unit is trading 0.55% negative in the day at 8.62. Technical conditions in the one-hour chart suggest more recoveries with the 8.67 as the first resistance, then, 8.70 and 8.72 are the levels to watch.
The 8.58 was an excellent level to enter a long position as RSI was giving a bullish signal. However, right now we may want to wait for more developments. That being said, the unit needs to maintain the 8.60 area before extending its recovery.
Pay attention to the RSI plus a possible MACD bullish cross in the next hours.
To the downside, a break below the 8.60 level would open the doors for a retest of the intra-day low at 8.58, then, 8.55 would be the profit-taking level.
Corn trades sideways, but it accelerates in the last hour
Corn was trading sideways on Tuesday; however, significant bullish interest was arisen in the American morning with the unit jumping to 3.69, where the unit got a rejection.
The unit is now trading 0.14% on the day at 3.67 per bushel. Technical conditions are mixed in the 1-hour chart with oscillators pointing to the upside but moving average moving down.
To the downside, supports are at the 3.66-3.65 area. Below there, please check for 3.63 as the next buying zone.
Hi FX Emperors, it is the question everybody is asking as GDP numbers in Germany confirmed a contraction in the Q2. Also, Gold and Silver buyers are taking advantage of a risk aversion environment and a cheap dollar.
Metals such as gold and silver are trading positive on Tuesday as investors are digesting economic data in Germany and the news about the trade war between the US and China. Besides, a cheaper dollar is making holding in gold more attractive.
Meanwhile, the Yuan has declined again, and after its ninth consecutive day of losses against the US Dollar, it is now at its lowest level since February 2008.
Germany confirms recession fears
The Gross Domestic Product in Germany declined 0.1% in the second quarter, according to the Statistisches Bundesamt Deutschland Office. Year over year, German GDP was unchanged, while the GDP WDA figure rose 0.4% in the last twelve months.
German numbers were in line with expectations, but it is a confirmation that Germany could be facing a recession in the next few months.
The news fueled metals amid their conditions of safe havens. Also, it pushed down the euro, but the dollar is not that strong lately, so the decline wasn’t significant. The picture remains gold supporting.
Trade war: Yuan continues its depreciation
Recent commentaries about possible talks between Washington and Beijing are lifting market sentiment; however, investors don’t want to believe it at all and they prefer to be ready in case of another escalation or Tweet from the US President Trump.
However, the good news doesn’t look like that as the Yuan continues with is decline against the US Dollar.
It could be a mix of a weak dollar and the intervention of the PBOC to push Yuan prices down, but the truth is that USD/CNY rose to new highs at 7.1690 on Tuesday, maximum since February 2008.
Only in August, the dollar-yuan rallied 4.0%. It would be its biggest monthly increase in over 25 years.
Gold trades in consolidation mode after Monday’s rollercoaster
After peaking at its highest level since April 2013 at 1,555 on Monday, gold is now trading in consolidation mode around 1,530 on Tuesday. The unit seems to be supported by the 1,525 area but also contained by the 1,535.
Technical conditions remain mixed for the XAU/USD, but fundamentals are leading the metal with a bullish sentiment ready to explode.
Saxo Bank commodity strategist Ole Hansen said that “it’s clear that the main focus is on the U.S.-China developments. Reports from China on the trade front indicate we are nowhere near any change in the current standoff on trade.”
Also, “with the growth numbers in Germany pointing to a recession, there’s not much of an excuse to sell gold if you are holding any, keeping the market more or less unchanged even though we had a toning down of the confrontational tone on trade.”
To the upside, watch resistances at 1,535, 1,540, 1,535 and the 1,550 area. Above that, obviously the multi-year highs at 1,555.
Silver jumps to 18.00
Silver is extending its rally on Tuesday after breaking above the 17.75 area on Monday. Today, XAG/USD jumped to trade as high as 18.00 early in the day, its highest level since September 2017.
Currently, silver is trading 1.55% positive on the day at 17.93, clearly in a consolidation phase before the next bullish leg.
Technical indicators suggest more room for the upside with the 18.00 level being as the next resistance. Above, check 18.25, 18.50, and 18.70 as the following selling zones.
Corn, soybeans, and other softs futures are trading mixed on Monday as investors are digesting China imports of US agricultural goods in July and a new US-Japan trade deal.
China imports of soybean rose significantly in July as ships that were booked during the bilateral truce in December arrived.
Besides, US President Trump and Japan Prime Minister Abe agreed in a trade deal between the two countries. “It’s a very big transaction, and we’ve agreed in principle. It’s billions and billions of dollars. Tremendous for the farmers,” Trump said to reporters in Biarritz, in the French Basque Country.
So, on Monday, agricultural futures traded in a kind of rollercoaster led by soybeans as grains posted gains amid forecast lower revision and tensions between the United States and China. But then, a conciliatory tone of Donald Trump regarding China, and the deal with Japan pushed prices down.
Soybeans rally, but rejects 8.70, trading idea above 8.60
Soybeans rallied at the opening of the Monday session as investors welcomed news from China purchases in July and a new trade deal between Japan and the United States. Futures of Soybeans jumped from 8.55 to trade as high as 8.70.
However, the unit was unable to sustain levels, and it started to retrace towards the 8.60 area in the American morning. Currently, soybean is trading at 8.63, 0.85% positive on the day.
Technical conditions suggest a potential bullish outbreak with the 8.60 area as a buying zone. MACD seems to be ready to go above the zero line with the faster line going above the slower one. Also, the 8.60 level looks like strong short term support.
Price target would be at 8.70 for the first revision, but 8.72 is also possible as it is a good resistance that traders have used as selling area in the past.
That being said, other technical studies, including Momentum, highlights the bearish condition of the oilseed with the 8.57 and 8.55 as immediate supports.
Corn left behind the 3.71 finally
Futures of corn are trading down on Monday despite forecasts for lower US yield and production. However, WASDE report is altering all perceptions, so experts are awaiting for September forecasts.
The grain started the day with gains that drove the unit to the testing of the 3.71 level. However, the contract was rejected and corn fell to 3.66.
Currently, corn is trading at 3.67, 0.07% negative in the day. Technical conditions are mix with MACD and Awesome Oscillator pointing to the downside, but Momentum highlighting an upside opportunity.
If you are a trader, a break below the 3.65 level will open the door for a retest of the 3.58 area.
To the upside, a break above the 3.71 will be a bullish signal for a test of the 3.74 resistance first, and then the 3.80 area.
Happy Monday FX Emperor, are you sure do you want to get back to markets after Friday meltdown? Well, you are a survivor if you are here. Let’s talk about gold, metals, and its catalysts.
Today, the sentiment rollercoaster remains alive. Gold and silver opened the week with substantial gains amid risk aversion after Friday trade war escalation and a Dollar-Yuan which jumped to 7.1535, its highest level since February 2018.
Then, US President Trump affirmed that China and the United States are ready to get back to the table and to negotiate for a trade war resolution. Trump said that both countries would start talking very seriously following a phone call on Sunday.
“China called last night our top trade people and said ‘let’s get back to the table’ so we will be getting back to the table, and I think they want to do something,” Trump said. “They have been hurt very badly but they understand this is the right thing to do and I have great respect for it. This is a very positive development for the world.”
Trump even tweeted on Monday about China and his great leader Xi. “Great respect for the fact that President Xi & his Representatives want ‘calm resolution.’ So impressed that they are willing to come out & state the facts so accurately. This is why he is a great leader & representing a great country. Talks are continuing!”
Gold jumps to fresh highs since April, but it retraces on improved risk sentiment
Gold is opening the week with a positive note; however, the unit has lost almost all its opening gains performed in a weekly bullish gap, and it is now trading virtually flat on the day.
Previously in the day, XAU/USD jumped as investors were worried about the trade war and risk aversion was ruling the market. However, positive news coming from the G7 in the mouth of US President Donald Trump saying that China and the United States are ready to get back to the table to talk about the trade war brings the risk appetite to the market.
The news helped to improve sentiment after the Friday trade war escalation.
Then, gold started to move back from 1,555, a new high since April 2013, to trade at 1,525 in the early American morning. Currently, XAU/USD is trading at 1,530, which is 0.25% positive on the day.
Gold is trading backed on fundamental news, technical studies are limited due to the current global situation, and all the moves are clearly risk aversion/appetite, and US bond yields influenced.
That being said, technical conditions still shows more bearish extension possible; however, a bullish u-turn is on the cards in the short term. As for now, 1,525 is the new support on the house.
Below there, 1,510 and 1,490 are the levels to watch. Then, 1,480 is the middle term support.
To the upside, 1,445 is the immediate resistance; then, the unit will face the 1,555 high again. All that gold needs is to maintain prices above the 1,500 area.