AUD/USD Price Forecast – Australian Dollar Continues Recovery

The Australian dollar has rallied a bit during the course of the trading session on Wednesday to show signs of life yet again. Ultimately, the 0.76 level is an area that I think will be crucial due to the fact that it was previous support, so if we can recapture that, this makes this a bit of a “throw over” as the buyers will have saved the market. The 200 day EMA will also have offered a bit of support, so I think at this point in time it is likely that we will continue to see a lot of questions asked.

AUD/USD Video 24.06.21

Quite frankly, I think this has more to do with the US dollar than the Aussie dollar itself, so pay close attention to the US Dollar Index. If it continues to fall, that could help quite a bit in order to push this market higher, driving the Aussie towards the 50 day EMA and then perhaps even higher than that. I have no interest whatsoever in shorting this pair right now, at least not until we break down below the recent lows. If we do, that could send this market much lower, as it would wipe out the rest of support.

At that juncture, I would anticipate that we would probably go down to the 0.71 handle. You should also keep in mind that the Australian dollar is highly correlated to commodities and the global growth picture in and of itself, so it does make quite a bit of sense that we should watch commodity markets as well to give us an idea as to where we go next.

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

Walgreens Could Offer Profitable Short Sales

Walgreens Boots Alliance Inc. (WBA) forced market speculators to take notice in the second half of 2019, rallying on reports the $45-billion drug chain was holding preliminary talks with private equity firms to ‘go private’. Unfortunately, the worst long-term performer in the Dow Jones Industrial Average couldn’t finalize a deal and turned sharply lower, ending 2020 with a negative 38% return. However, things are looking better so far in 2021, with the stock up near 30%.

Losing Market Share to Amazon

The pharmacy chain reports fiscal Q3 2021 results next week, with Wall Street analysts looking for a profit of $1.18 per-share on $33.8 billion in revenue. If met, earnings-per-share (EPS) will mark a 42% profit increase compared to the same quarter last year, which included the pandemic lockdown. The stock topped out a week after raising fiscal 2021 guidance in March and has drifted lower during the second quarter.

Amazon.com Inc. (AMZN) has hurt pharmacy chain income in recent years, with formerly loyal customers loading up on all sorts of front-of-store items online. Unfortunately, the e-commerce juggernaut is now getting into the pharmacy business, with a new division that makes “at-home delivery pharmacy easier and more convenient for customers.” Recent reports also indicate the company is looking at opening brick-and-mortar pharmacies in direct physical competition.

Wall Street and Technical Outlook

Wall Street consensus is locked in glacial ice at a ‘Hold’ rating, based upon 1 ‘Buy’, 1 ‘Overweight’, 17 ‘Hold’, 1 ‘Underweight’, and 1 ‘Sell’ recommendation. Price targets currently range from a low of $37 to a Street-high $72 while the stock is set to open Tuesday’s session about $5 below the median $56 target. Gravity could easily take control in this configuration, especially if Walgreens fails to meet or exceed Q3 expectations.

The stock topped out in 2015 and entered a persistent decline that’s carved an endless series of lower highs and lower lows. The current advance stalled at 50-month moving average resistance at the start of the second quarter while price is now sandwiched between that level and support at the 200-month moving average. A breakdown through that trading floor will set off a major sell signal that could generate profitable short sales, given the stock’s southern trajectory in recent years.

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

Disclosure: the author held Amazon in a family account at the time of publication.

BIS Goes for Jugular on Bitcoin, Touts CBDCs

The hits keep coming for bitcoin. Most recently, the Bank for International Settlements (BIS) is piling it on, finding more faults with the biggest cryptocurrency than any redeeming qualities. The BIS stated in its latest Annual Economic Report:

“By now, it is clear that cryptocurrencies are speculative assets rather than money…Bitcoin, in particular, has few redeeming public interest attributes when also considering its wasteful energy footprint.”

Perhaps they have been listening to Elon Musk, who also has taken aim at bitcoin mining’s energy consumption. Bitcoin is no stranger to criticism or threats. The BIS’ assessment also comes on the heels of China’s cryptocurrency crackdown targeting bitcoin mining. The bitcoin price mostly shrugged off the BIS report, with the price up by a double-digit percentage in the last 24-hour stretch.

CBDCs Are A-OK

While the BIS is not a fan of bitcoin, it does not have any problem with central bank digital currencies (CBDCs,) which are catching on globally. CBDCs are digital versions of fiat money, such as the U.S. dollar, that are issued by central banks, potentially using blockchain technology, and can be used as a form of payment by individuals and businesses.

China has been an early-mover on the CBDC front and is already integrating the digital yuan into its economy. Governments that feel threatened by bitcoin, including Nigeria and Ghana, have shown their support for CBDCs. According to the BIS, there are nearly six dozen central banks currently exploring the use of CBDCs.

The BIS has placed a target on the backs of cryptocurrencies, stablecoins, and big techs, saying that they  “all tend to work against the public good element that underpins the payment system.” Meanwhile, on CBDCs, the BIS’ Benoit Coeure is quoted by Reuters as saying, “The train has left the station.”

Doubling Down, Buying the Dip

Despite the regulatory spotlight, bitcoin bulls have been flexing their muscles of late, doubling down and buying the dip. Among them, Cathie Wood, who is at the helm of Ark Invest, has reportedly scooped up 1 million shares of the Grayscale Bitcoin Trust and more than 214,000 shares of cryptocurrency exchange Coinbase. Using the ARK Next Generation Internet ETF, Wood seemingly allocated USD 12 million to the Grayscale Bitcoin Trust.

Wood is not the only one buying. Chun Wang, co-founder of F2Pool, a bitcoin mining pool, is also using the market downdraft to buy more bitcoin. While the bitcoin price may be off its peak, the cryptocurrency community is used to its volatility.

Are The US Major Indexes Rolling Over In An Excess Phase Peak Setup?

Recently, I published a research article on Bitcoin suggesting there may be a bigger downside price move setting up – breaking support near $30k and extending the Excess Phase Peak pattern that we warned about back in November 2020.  Today, my team and I wanted to alert you that the recent price rotation in the Dow Jones Industrial Average and the Transportation Index COULD setup in an early stage (Phase #2) peaking formation similar to what started the recent down trend in Bitcoin.

The setup of the Excess Phase peak pattern consists of an exuberant rally to a peak (Phase #1), followed by a moderate price correction that sets up into a sideways flagging pattern (Phase #2).  If the INDU and TRAN continue to move in a sideways flagging formation after recently move moderately lower, we may start to see a new Excess Phase Peak setup in these two major indexes. This could be a warning of a much bigger breakdown in trend in the near future.

Please take a minute to review our earlier research posts related to the Excess Phase Peak setup (below) and how it related to the current market trend:

INDU MUST RALLY ABOVE $35,300 TO BREAK AWAY FROM EXCESS PHASE PEAK

The Weekly INDU chart, below, highlights the five phases of the Excess Phase Peak formation and also highlights a GREEN “break-away” rally trend that could setup to end any potential Excess Phase Peak formation.  If the markets resume the rally trend and the INDU rallies above $35,300 soon, we would consider this a new “break-away” rally trend – potentially ending the Excess Phase Peak pattern setup.  If the INDU fails to rally above $35,300 and trades within the Phase #2 sideways flag range, then breaks downward, this type of price action would confirm the Phase #3 breakdown price trend that sets up intermediate support and the eventual Phase #4 sideways consolidation.

Remember, the phases of the Excess Phase Peak pattern are fairly easy to identify.

  • Phase #1:  The rally to the ultimate peak level.
  • Phase #2:  The breakdown of that peak level, setting up the initial support level and prompting a sideways price Flag/Pennant price channel.
  • Phase #3:  The breakdown of the #2 sideways price channel leading to a steep decline to intermediate support – which acts as a temporary sideways bottom.
  • Phase #4: The breakdown of the intermediate support level which ultimately leads to the strongest price decline targeting the ultimate bottom in price.
  • Phase #5: Identifying the ultimate bottom/momentum base in price.  This trending phase can last many months (possibly more than 12 months at time), or could be in the form of a deep “V” bottom.

Once the breakdown of the Phase #2 flagging formation is confirmed, we start to look for confirmation of the Phase #3 intermediate support level and the eventual Phase #4 breakdown of that support level.

If the INDU rallies above the recent all-time highs and breaks-away from the sideways flag ranges, then we would consider that new high as a new bullish price trend – negating the Excess Phase Peak Phase #2 setup completely.  Obviously, any new all-time high/rally could eventually setup another Phase #1 peak and Phase #2 sideways flagging channel at any time in the future.

Near the lower area of this chart we’ve highlighted the On Balance Volume trend and how it has recently started to trend lower.  We would expect any continued upside price trending to support an increasing OBV level as accumulation takes place in the markets.  Failure to see the OBV level rising as price rises may suggest a “false break-away” in trend.

TRAN MIRRORING EXCESS PHASE PEAK FLAGGING SETUP – WHAT NEXT?

This Weekly Transportation Index chart should appear very similar to the INDU chart (above).  The unique similarities of these two charts, one addressing the Blue Chip US economy and the other addressing future US transportation expectations related to economic activity, suggests traders may be shifting away from a reflation recovery after the FOMC statements last week.  We are starting to see traders/investors reevaluate the capability of the US economy to continue the rally trends as they have since November 2020.  Could this shift in investor sentiment prompt a broader market price setup?  Is it warning of an Excess Phase Peak setup in the making?

Right now, we only have confirmation of a recent all-time high peak and the start of what appears to be a sideways Flagging price channel.  We won’t know if the Excess Phase Peak pattern is truly confirmed until we see how the current sideways Flagging price channel concludes.

If it breaks downward, then we’ll have confirmation of a Phase #3 Excess Phase Peak stage that will alert us that a bigger downside price trend is pending.  If it breaks higher, and takes out $16,175, then we’ll consider this new rally high an end of the current Phase #2 setup and expect prices to continue rallying to new highs.

As we move into the end of June, the end of Q2:2021, it is important to understand that market price volatility should begin to increase as earnings and forward expectations continue to flood the news wires.  We are only 8+ days away from the end of June and we believe the markets are likely to trend sideways through to the end of the month – leading up to the Q2:2021 earnings calendar.

It makes sense to us that the broader markets, and investors, are searching for more clarity and reason to be bullish after such an extended price rally.  Time will tell how this plays out, but one thing is certain: Q2:2021 earnings and forward expectations will likely drive trader/investor sentiment over the next 3+ weeks.  Expect an increase in volatility and some potential surprises.

Consider this message an early warning if the Excess Phase Peak setup continues and confirms the Phase #3 breakdown of the current sideways Flagging setup.

Want to know how our BAN strategy is identifying and ranking various sectors and ETFs for the best possible opportunities for future profits? Please take a minute to learn about my BAN Trader Pro newsletter service and how it can help you identify and trade better sector setups.  My team and I have built this strategy to help us identify the strongest and best trade setups in any market sector.  Every day, we deliver these setups to our subscribers along with the BAN Trader Pro system trades.  You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results.

Enjoy your day!

Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com

 

EUR/USD, GBP/USD Analysis & Setups 23 – 25 June 2021

The EUR/USD is testing the Fibonacci retracement levels of the wave 4 pattern. A bearish bounce and breakout could confirm a downtrend continuation. The GBP/USD is also testing the key 50% Fibonacci resistance zone.

If you think our videos, analysis, and education can help you become a better trader, then you can ask your own questions via our form and we will answer them in the weekly live webinar every Tuesday.

EUR/USD & GBP/USD Overview

The EUR/USD remains bearish as long as price action stays below the 50% Fibonacci level. There could be still two more lower lows within the bearish wave C.

The GBP/USD needs to break below the 21 ema zone to confirm a breakout. A push above the 50% Fib places the bearish outlook on hold.

Check out the video below for the full analysis and trade plans on 23 – 25 June 2021:

EUR/USD, GBP/USD technical analysis: patterns, trends, key S&R levels

  • Explanation of potential trade ideas both up and down
  • Beginner friendly, explaining concepts in more detail

EUR/USD & GBP/USD Video

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

Good trading,

Chris Svorcik
CTA

 

Daily Gold News: Wednesday, June 23 – Gold Extends Consolidation Below $1,800

The gold futures contract lost 0.31% on Tuesday, as it continued to fluctuate following $100 decline after last week’s FOMC Statement release. On June 1 gold price was the highest since early January. In April the market has bounced from the support level marked by March 8 local low of $1,663.30. Since then it has been advancing. This morning gold is trading slightly higher, as we can see on the daily chart (the chart includes today’s intraday data):

Right now gold is 0.3% higher, as it is extending a short-term consolidation. What about the other precious metals? Silver is 0.7% higher, platinum is 0.7% higher and palladium is 1.65% higher today. So precious metals’ prices are higher this morning.

The markets will be waiting for today’s important PMI numbers releases at 9:45 a.m. We will also have the New Home Sales number release and some Fed talk.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days:

Wednesday, June 23

  • 3:30 a.m. Eurozone – German Flash Manufacturing PMI, German Flash Services PMI
  • 9:00 a.m. U.S. – FOMC Member Bowman Speech
  • 9:45 a.m. U.S. – Flash Manufacturing PMI, Flash Services PMI
  • 10:00 a.m. U.S. – New Home Sales
  • 11:00 a.m. U.S. – FOMC Member Bostic Speech
  • 12:00 p.m. Eurozone – ECB President Lagarde Speech

Thursday, June 24

  • 4:00 a.m. Eurozone – German ifo Business Climate
  • 8:30 a.m. U.S. – Final GDP q/q, Unemployment Claims, Durable Goods Orders m/m, Core Durable Goods Orders m/m, Final GDP Price Index q/q, Goods Trade Balance, Preliminary Wholesale Inventories m/m
  • 9:30 a.m. U.S. – FOMC Member Bostic Speech
  • 11:00 a.m. U.S. – FOMC Member Williams Speech
  • 4:30 p.m. U.S. – Bank Stress Test Results

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

Paul Rejczak
Stock Selection Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Best ETFs For July 2021

That’s why I spend my time crafting portfolios chock full of outlier stocks. If you choose right, you’ll have enormous gains on your hands in the years to come.

Now, I pick my ETFs perhaps a bit differently than other people. I can find outlier ETFs by tracking the Big Money. But that alone isn’t enough: when I catalog the components and find outlier stocks underneath… that’s the winning recipe.

That’s how I found the best big-money ETFs for July.

First, I looked at all ETFs making Big Money signals by going to MAPsignals.com and scanning the Big Money ETF Buys and Sells chart. I looked for recent days with heavy buying (the bright blue spikes):

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Once I knew which ETFs Big Money was buying, then I wanted the best opportunities. Remember: ETFs are just baskets of stocks. MAPsignals specializes in scoring more than 6,000 stocks daily. Therefore, if I know which stocks make up the ETFs, I can apply the stock scores to the ETFs. Then I can rank them all strongest to weakest.

Once the ETFs were sorted, I noticed Real Estate funds at the top. That’s why this month the top ETF is IYR.

#1 IYR – iShares U.S. Real Estate ETF

As we can see- there was a lot of Big Money buying plowing into this ETF over the last year. It accelerated noticeably since February:

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IYR holds some great stocks. One fine example is PLD (Prologis, Inc.). Below are Big Money signals for PLD:

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#2 BOTZ – Global X Robotics & Artificial Intelligence ETF

A.I. and Robotics are undoubtedly a huge part of our future. Big Money thinks so too. Look at the buying of BOTZ over the last year below.

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One great example stock that BOTZ holds is Intuitive Surgical. They make the surgical robot called DaVinci. It allows remote surgery- a phenomenal technology.

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#3 VDE – Vanguard Energy Sector ETF

Energy was an unloved sector last year. But it’s having a sudden resurgence. Big Money has been buying VDE:

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VDE holds a bunch of great energy stocks. One such stock that has been a Big Money darling in the past is FANG which is seeing a rebirth:

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#4 LIT – Global X Lithium ETF

Like it or not, lithium is the power of the foreseeable future for EVs. Look at all that green last year:

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And LIT holds some great stocks. One of them is the best-known EV manufacturer which is very reliant on lithium: Tesla Inc.

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#5 ARKQ – ARK Industrial Innovation ETF

The media has recently heaped scorn upon Cathie Wood, CEO of ARK Invest after she was Wall Street’s darling last year. The proof is ultimately not in the headlines, but in the Big Money buying. Here we can see clearly that Big Money loved ARKQ last year. The question is: when we see selling (red) should we worry?

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The answer lies in which stocks the ETF holds. And ARKQ holds some great ones. One such outlier is Teradyne:

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Let’s summarize here: the top 3 ETFs (IYR, BOTZ, and VDE) for July score well in terms of MAPsignals’ scores. That means Big Money has been pouring into them:

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LIT and ARKQ however, rank lower on our list of ETFs. This is because of weak technicals. These weaker ETFs represent great potential bargains.

So, there we have the 5 best ETFs for July.

The Bottom Line

IYR, BOTZ, VDE, LIT, & ARKQ represent top ETFs for July 2021. Real Estate, Energy, and Robotics stocks have performed well lately, which should continue. Lithium has an interesting story too. Paying attention to the fundamental quality of ETF constituents is paramount.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in TER in managed accounts, but no positions in IYR, BOTZ, VDE, LIT, ARKQ, PLD, ISRG, FANG, or TSLA at the time of publication.

Charts Source: www.mapsignals.com, FactSet, End of day data sourced from Tiingo.com

Investment Research Disclaimer

Japan Retains Distinction of being the only G7 Country with Sub-50 PMI Composite

Tapering not a rate hike was the focus of discussions. Powell reiterated that price pressures would prove transitory and would ease after the re-opening disruptions settled down. The implied yield on the December 2022 Eurodollar futures fell for the second day, and the cumulative three basis point decline was the most in a month. The 10-year yield was capped near 1.50% and remains below there today.

The stronger than expected EMU preliminary PMI did not prevent European bond yields from slipping either. The dollar is softer against most major currencies, but the Japanese yen and Japan retain the distinction of being the only G7 country with a composite PMI below the 50 boom/bust level. Despite a strong preliminary PMI, the euro is struggling to extend yesterday’s recovery. The freely accessible and liquid emerging market currencies are also higher. The JP Morgan EM FX index is higher for a third day after dropping in the previous six sessions.

The Czech central bank is expected to hike 25 bp later today after Hungary hiked by 30 bp yesterday and announced the start of a new tightening cycle could see monthly adjustments. Asia Pacific equities were mixed. China, Hong Kong, Taiwan, and South Korea advanced, while Japan, Australia, and India slipped. Europe’s Dow Jones Stoxx 600 recovered yesterday after a soft start. It is trading a little heavier in the European morning.

US futures indices are slightly higher. Industrial commodities, including copper, iron ore, and steel rebar, are trading higher. August WTI is at a new high of around $73.50, helped a 7.2 mln barrel drawdown of US inventories, according to reports citing API. It confirmed it would put US inventories are a new 14-month low. Gold is consolidating in a narrow range of around $1780.

Asia Pacific

Japan’s preliminary PMI underscores the toll of the formal state of emergency and the slow vaccine rollout. The manufacturing PMI slipped to 51.5 from 53.0, while the contraction in the services slowed, signaled by the services PMI edging up to 47.2 from 46.5. The composite fell further from the 50 boom/bust level, easing to 47.8 from 48.8.

Australia’s flash PMI softened, but it remains at strong levels. The manufacturing PMI eased to 58.4 from 60.4, and the services PMI dropped to 56.0 from 58.0. This resulted in the composite slipping to 56.1 from 58.0. The strength of last week’s employment data and today’s report gives the central bank reason to adjust policies at the July 6 meeting. The focus is on its bond-buying and three-year yield target. The market does not see a rate hike until at least the middle of next year.

China had indicated that it was prepared to sell some industrial metals from its state inventories to relieve some pressure on prices. It appears the vague signal was more powerful than the actual announcement. Yesterday, it announced it would auction 20k metric tons of copper, 30k metric tons of zinc, and 50k metric tons of aluminum on July 5-6.

The dollar reached nearly JPY111.00, its best level since March 31. The disappointing Japanese preliminary PMI reinforces perceptions that the BOJ will lag behind the other major central banks in normalizing policy. Last year’s dollar highs were recorded near JPY112.25 in February and JPY111.70 in March. Initial support is now seen in the JPY110.60-JPY110.70 area. Note that there is a $1.15 bln option at JPY110.75 that expires tomorrow.

The Australian dollar is trading at four-day highs around $0.7570. It is trying to re-establish a foothold above the 200-day moving average (~$0.7560) and the (38.2%) of the losses suffered since the FOMC meeting, found near $0.7570. The next (50%) retracement is closer to $0.7600. The greenback rose to a two-month high against the Chinese yuan, a little above CNY6.49, before easing back to CNY6.48. We had seen potential toward CNY6.4950. The PBOC set the dollar’s reference rate that was again softer than the models expected (CNY6.4621 vs. CNY6.4634).

Europe

The flash EMU composite June PMI reached a 15-year high of 59.2. Not only was the May reading (57.1) surpassed, but so was the median forecast in Bloomberg’s survey (58.8). The manufacturing PMI held steady at 63.1 in the face of expectations for a modest softening, while the service PMI matched expectations by rising to 58.0 from 55.2.

Germany’s PMI accelerated while the French reading was mixed. Germany’s manufacturing PMI rose to 64.9 from 64.4. The median projection was for a pullback. The service sector surged as social restrictions eased (58.1 from 52.8). The composite jumped to 60.4 from 56.2. Fewer companies were reporting longer lead times and rising material costs. France’s results were somewhat less inspiring but still solid. The manufacturing PMI stands at 58.6 (from 59.4 in May), and the service PMI rose to 57.4 (from 56.6). The composite rose to 57.1 (from 57.0).

The UK, which has to delay its re-opening measures into the middle of next month, saw its preliminary PMI slip. The manufacturing PMI eased to 64.2 from 65.6, which is still a strong result and slightly better than expected. The services PMI slipped to 61.7 from 62.9. That is a bit less strong than expected. The composite also stands at 61.7, down from May’s 62.9 and below the median forecast in Bloomberg’s survey. Separately, the UK and EU appear to be edging toward an extension in the border checks in Northern Ireland that will avoid escalating the tensions.

While formally requesting an extension, the UK has threatened unilateral action. The EU wants to ensure it will not be one extension followed by another and another. Both sides have it in their interest to resolve the situation before a recriminating trade war is sparked.

The euro is holding above $1.1910 but has not risen above the high (almost $1.1955) seen in the US yesterday afternoon. There is an option at $1.1975 for about 465 mln euro that expires today. An option that expires tomorrow for 1.2 bln euros at $1.1925 is also notable. The $1.20 area houses the 200-day moving average and the (38.2%) retracement of this month’s decline. It represents an important hurdle. Sterling is approaching $1.40, where a GBP700 mln option expires today, and a GBP540 mln option expires tomorrow. The (38.2%) retracement of this month’s fall is near $1.3965, and the (50%) retracement is a little above $1.4015.

America

The US flash PMI is expected to soften a little, but the reading is expected to be strong. That said, looking at survey results, many economists expect the pace of US growth to peak around now. Some of the preliminary estimate details involving lead times and prices may be more important than the headline figures. Separately, the US reports the current account deficit for Q1. It may surpass the $200 bln-mark for the first time since 2007.

In Q4 19, it was a little below $105 bln. We have suggested that when coupled with the large budget deficit (already at 4.7% of GDP in 2019), the US typically has to offer higher interest rates or the dollar bears a greater burden in the adjustment process. Also, the market is interested in the different nuanced stances of Fed officials after last week’s FOMC meeting. Today, Bowman, Bostic, and Rosengren speak.

Canada’s April retail sales are expected to have fallen by nearly 5% after surging 3.6% in March and 5.8% in February. We would not read too much into the monthly volatility. The Canadian economy is recovering, and the key to the July 14 central bank meeting may be the July 9 employment report. Mexico also reports April retail sales. A small rise is expected after its retail sales rose by 3.6% in March (and 2.5% in February). The central bank meets tomorrow. Although it is widely expected to keep the overnight rate target at 4.0%, the rhetoric has become steadily less dovish. The market anticipates around 50 bp of tightening in H2.

The dollar peaked on Monday near CAD1.2485 before reversing lower. Follow-through selling has pushed it below CAD1.2300 today. The greenback bottomed (four-year low) near CAD1.20 on June 1. The CAD1.2300 area corresponds to a (38.2%) retracement. The halfway mark is around CAD1.2245 is the next target. Below there, initial potential extends toward CAD1.2200.

The greenback peaked against the Mexican peso at the end of last week near MXN20.75. It has fallen to a five-day low around MXN20.2630 today. The dollar may be capped in the MXN20.40-MXN20.42 area, which holds the 200-day moving average and the initial high from the FOMC meeting conclusion on June 16. The next target is near MXN20.17.

This article was written by Marc Chandler, MarctoMarket.

The U.S Crypto Morning Session – June 23rd, 2021

After a bearish start to the day, Bitcoin and the broader crypto market found much-needed support through the morning.

Following buck trending rise on Tuesday, Bitcoin was back on the move, recovering from an early visit to sub-$32,000 levels.

At the time of writing, Bitcoin, BTC to USD, was up by 4.28% to $33,965.0. A mixed start to the day saw Bitcoin fall to an early morning current day low $31,790.0 before finding support.

Steering clear of the first major support level at $30,090, Bitcoin rose to a mid-morning high $34,486.0 before easing back.

Bitcoin broke through the first major resistance level at $34,211, before easing back to sub-$34,000 levels.

BTCUSD 230621 Hourly Chart

The Rest of the Pack

It’s been a bullish morning for the broader crypto market.

Ripple’s XRP was up by 15.32% to lead the way.

Binance Coin (+9.43%), Cardano’s ADA (+8.01%), Chainlink (+9.72%), and Litecoin (+7.43%) also made solid gains.

Bitcoin Cash SV (+5.52%), Crypto.com Coin (+4.45%), Ethereum (+5.82%), and Polkadot (+3.53%) trailed the front runners, however.

Through the early hours, the crypto total market fell to an early morning low $1,242 before rising to a high $1,363bn. At the time of writing, the total market cap stood at $1,339bn.

Bitcoin’s dominance rose to an early high 48.32% before falling to a low 47.19%. At the time of writing, Bitcoin’s dominance stood at 47.45%.

For the Day Ahead

Bitcoin would need to continue to avoid the $31,729 pivot to support another run at the first major resistance level at $34,211.

Support from the broader market would be needed, however, for Bitcoin to break back through to $34,200 levels.

Barring an extended crypto rally, the first major resistance level and resistance at $34,500 would likely cap any upside.

In the event of an extended crypto rally, Bitcoin could test resistance at $36,000 levels. The second major resistance level sits at $35,850.

A fall through the $31,729 pivot would bring the first major support level at $30,090 into play.

Barring an extended sell-off through the afternoon, however, Bitcoin should steer clear of sub-$29,000 levels and the 62% FIB of $27,237. The second major support level sits at $27,608.

Looking beyond the support and resistance levels, the 50 EMA narrowed on the 100 and the 200 through the morning, supporting the mid-morning rally.

We have also seen the 100 EMA flatten on the 200 EMA adding further support.

A further narrowing of the 50 EMA on the 100 EMA would bring sub-$35,000 levels into play.

Key going into the afternoon, however, would be a move back through the morning high $34,486 to $34,500 levels.

Fed’s Liquidity Circus and Gold

With Jerome Powell, Chairman of the U.S. Federal Reserve (FED), testifying before Congress on Jun. 22, his prepared remarks signaled that the FED remains on autopilot. Despite saying that “job gains should pick up in coming months as vaccinations rise,” he added that “we at the FED will do everything we can to support the economy for as long as it takes to complete the recovery.”

And while Powell supported our thesis by saying that “labor demand is remarkably strong and over time we will find ourselves with low unemployment and wages going up across the spectrum,” when asked if inflation is transitory, he responded:

“[Perhaps] all of the overshoot in inflation comes from categories such as rising used car and trucks, airplane tickets, hotel prices that have been affected by the reopening of the economy. [And while] these effects have turned out to be larger than we expected , the incoming data are consistent with the view that these factors will wane over time .” For context, of course inflationary pressures will “wane over time.” That’s not up for debate. However, “when” is the key question.

But in a bid to remove any doubt, he added:

We will not raise interest rates preemptively because we fear the possible onset of inflation . We will wait for evidence of actual inflation or other imbalances.”

Thus, while investors clearly cheered the FED Chair’s dovish sentiment on Jun. 22, Powell (for better or worse) still remains out of touch with reality. Case in point: the Philadelphia FED released its Nonmanufacturing Business Outlook Survey on Jun. 22. And while “the full-time employment index fell 20 points to 4.3 in June after rising 17 points last month,” the report revealed that “both future activity indexes suggest that the respondents expect overall improvement in nonmanufacturing activity over the next six months.”

Please see below:

Source: Philadelphia FED

More importantly, though, with the inflation drama still unfolding, the report showed more of the same:

“After reaching its all-time high in May, the prices paid index mostly held steady in June at 49.0 Forty-nine percent of the firms reported increases, none reported decreases , and 33 percent of the firms reported stable input prices. Regarding prices for the firms’ own goods and services, the prices received index rose 12 points to 28.9 in June, its highest reading since June 2018.”

Please see below:

Source: Philadelphia FED

Similarly, the Richmond FED also released its Survey of Manufacturing Activity on Jun. 22. And while the report cited that “average growth rates of both prices paid and prices received by survey participants declined slightly but remained elevated in June,” employment was more optimistic, with the report revealing that “many manufacturers increased employment and wages in June and [expect] further increases in the next six months.”

Please see below:

Source: Richmond FED

What’s more, while the FED admitted its inflation error on Jun. 16 – as evidenced by the increase in its forecast for the headline Personal Consumption Expenditures (PCE) Index – Powell is now pretending that growth doesn’t exist. For context, the FED increased its 2021 real GDP growth estimate from 6.5% to 7.0% on Jun. 16, so Powell’s assertion on Jun. 22 that the economy “is still a ways off” is quite the contradiction.

Moreover, absent a severe spread of the Delta variant – which White House chief medical advisor Dr. Anthony Fauci said was “the greatest threat in the U.S. to our attempt to eliminate COVID-19” – U.S. economic growth should easily outperform its developed-market peers.

For example, many deflationists cite the slowdown in loan activity as a sign of a weak U.S. economy. However, with U.S. commercial banks releasing their deposit figures on Jun. 22, the argument is much more semblance than substance.

Please see below:

To explain, the green line above tracks deposits held by U.S. commercial banks, while the red line above tracks consumers’ revolving and credit card loans. If you analyze the right side of the chart, you can see that a material gap is present. However, with unprecedented fiscal policy (stimulus checks and enhanced unemployment benefits) flooding consumers’ bank accounts with dollars, why borrow money if you already have the cash to make the purchase?

To that point, if we compare U.S. commercial banks’ deposits to the U.S. federal debt, the connection is even clearer.

Please see below:

To explain, the green line above tracks deposits held in U.S. commercial banks, while the red line above tracks the U.S. federal debt. If you analyze the sharp move higher in 2020, it’s another sign that U.S. citizens don’t need to borrow money when the government is already writing the checks. For context, there is a slight lag because the U.S. federal debt references Q1 data and U.S. commercial banks’ deposits reference Q2 data.

Likewise, while rising U.S. nonfarm payrolls remain the key piece to solving the FED’s puzzle, the idea that monetary support is helping the real economy lacks credibility. To explain, the FED sold a record $792 billion worth of reverse repurchase agreements on Jun. 22. Moreover, when the FED buys $120 billion worth of bonds per month, the cash filters throughout the U.S. banking system and then financial institutions exchange that cash for Treasury securities on a daily basis, is QE really helping anyone?

Please see below:

Source: NY FED

For context, I wrote previously:

A reverse repurchase agreement (repo) occurs when an institution offloads cash to the FED in exchange for a Treasury security (on an overnight or short-term basis). And with U.S. financial institutions currently flooded with excess liquidity, they’re shipping cash to the FED at an alarming rate.

More importantly, though, after the $400 billion level was breached in December 2015, the FED’s rate-hike cycle began. On top of that, the liquidity drain is at extreme odds with the FED’s QE program. For example, the FED aims to purchase a combined $120 billion worth of Treasuries and mortgage-backed securities per month. However, with daily reverse repurchase agreements averaging $520 billion since May 21, the FED has essentially negated 4.33 months’ worth of QE in the last month alone.

To that point, the flood of reverse repurchase agreements signals that financial institutions have no use for the FED’s handouts. Think about it: if commercial banks could generate higher returns by originating loans for consumers and businesses, wouldn’t they? And with 74 counterparties participating on Jun. 22 – up from 46 on Jun. 7 – the FED’s liquidity circus is now on display every night.

If that wasn’t enough, I’ve highlighted on several occasions that gold exhibits a strong negative correlation with the U.S. 10-Year real yield (inflation-adjusted). And unsurprisingly, when the latter peaked in late 2018 and began its descent, it was off to the races for gold.

Please see below:

To explain, the gold line above tracks the London Bullion Market Association (LBMA) Gold Price , while the red line above tracks the inverted U.S. 10-Year real yield. For context, inverted means that the latter’s scale is flipped upside down and that a rising red line represents a falling U.S. 10-Year real yield, while a falling red line represents a rising U.S. 10-Year real yield.

More importantly, though, if you analyze the relationship, you can see that before the U.S. 10-Year real yield plunged, gold was trading below $1,250 (follow the arrow). Conversely, once the U.S. 10-Year real yield hit an all-time low of – 1.08% in 2020, gold was trading above $2,000.

Thus, what emotional gold investors fail to appreciate is that the yellow metal benefited from abnormally low interest rates. And with further strength dependent on another all-time low, the FED’s tightening cycle (which is already subtly underway) paints an ominous portrait of gold’s medium-term future.

To that point, with Morgan Stanley telling its clients that “ We are past “Peak Fed” for the cycle and the market knows it ,” overzealous gold investors ignore the difficult realities that lie ahead.

Please see below:

To explain, the blue line above tracks the U.S. 10-Year real yield and important fundamental developments are marked in red. If you analyze the “Peak Fed” labels near 2012 and 2020 and compare them with gold’s behavior on the first chart above, you can see how abnormally low U.S. 10-Year real yields coincided with abnormally high gold prices. As a result, with the former poised to move higher in the coming months, the yellow metal will likely head in the opposite direction.

What’s more, not only are the PMs dodging bullets from the bond market, but the USD Index has barely made its presence felt. For example, while the FED’s hawkish shift (even if Powell won’t admit it) is extremely bullish for the greenback, market participants – who are willing to give the FED the benefit of the doubt – still remain skeptical of the recent rally.

Please see below:

To explain, the black line above tracks Citigroup’s USD Positioning Alert Indicator (PAIN). For context, the index gauges whether or not positioning is crowded in the currency market. If you analyze the right side of the chart, you can see that U.S. dollar sentiment has fallen off of a cliff. However, with all signs pointing to a September taper, a violent short-covering rally could catch many investors off guard.

As further evidence, when the FED delivered its taper announcement in December 2013, the USD Index recorded (with a delay) one of its sharpest rallies ever.

Please see below:

To explain, the green line above tracks the USD Index. If you analyze the left side of the chart, you can see that after the FED revealed its hand, the USD Index found a bottom and surged roughly six months later. Thus, with a similar announcement likely in the fall, the PMs could be confronted with even more negativity.

And no, Basel 3 is not likely to be a game-changer for the gold market in the near term – I discussed that on June 2 .

In conclusion, while the gold, silver, and mining stocks remain ripe for a short-term rally (no market moves in a straight line and PMs are no exception), their medium-term outlook remains extremely treacherous. And though Powell calmed investors’ nerves on Jun. 22 and market participants remain loyal followers, it’s important to remember that he is far from omniscient. After a significant about-face regarding the future trajectory of the headline PCE Index – a forecast that he made only three months ago – his confidence game is all about sentiment. Thus, while investors will give him the benefit of the doubt until the bitter end, the recent behavior of the bond market, the USD Index and the precious metals signal that the winds of change have already begun to blow.

Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.

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

Przemyslaw Radomski, CFA
Founder, Editor-in-chief
Sunshine Profits: Effective Investment through Diligence & Care

* * * * *

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Crude Oil Price Update – Trend Up, but Close Under $72.05 Could Lead to 2 -3 Day Setback

U.S. West Texas Intermediate crude oil futures are trading higher on Wednesday, shortly before the release of the U.S. government’s weekly inventories report. The market is being supported by rising demand expectations and a bullish industry report that reinforced views of a tightening market as travel picks up in the United States and Europe.

At 09:11 GMT, September WTI crude oil is trading $72.66, up $0.61 or +0.85%.

The American Petroleum Institute (API) late Tuesday reported a draw in crude oil inventories of 7.199-million barrels for the week ending June 18. Analysts were looking for a much smaller draw of 3.942 million barrels for the week.

The API also reported another build in gasoline inventories of 959,000 barrels for the week-ending June 18. Analysts had expected a build of 833,000-barrels for the week. Distillate stocks saw an increase in inventories this week of 992,000 barrels for the week.

Later today at 14:30 GMT, the Energy Information Administration (EIA) is expected to report a 3.6 million barrel draw down in crude oil inventories.

In other news, perhaps putting a lid on prices are worries that OPEC+ may decide to increase oil output in August at its next monthly meeting on July 1.

Daily September WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $72.77 will reaffirm the uptrend. A move through $61.06 will change the main trend to down. This is highly unlikely, but due to the prolonged move up in terms of price and time, the market may be ripe for a closing price reversal top.

A closing price reversal top won’t change the main trend to down, but if confirmed, it could lead to the start of a 2 to 3 day correction. Additionally, given the bullish fundamentals, we expect any pullbacks to be short in nature.

The first minor range is $68.86 to $72.77. Its 50% level at $70.82 is the nearest support. This level will up as the market moves higher.

The second minor range is $67.84 to $72.77. Its 50% level at $70.31 is another potential support level.

Daily Swing Chart Technical Forecast

The direction of the September WTI crude oil market on Wednesday will likely be determined by trader reaction to $72.05.

Bullish Scenario

A sustained move over $72.05 will indicate the presence of buyers. Taking out $72.77 will indicate the buying is getting stronger. There is no resistance at this time, only potential upside targets like the psychological $75.00 level.

Bearish Scenario

A sustained move under $72.05 will signal the presence of sellers. If this move creates enough near-term momentum then look for the selling to possibly extend into the pair of pivots at $70.82 and $70.31.

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

China Is No Longer An Option? Crypto Miners Are Moving To Kazakhstan

Cryptocurrency mining firms in China are slowly moving their operations to other countries as the crackdown on crypto mining activities intensifies. Kazakhstan has become a favorable destination, and two crypto mining firms are already setting up operations there.

Kazakhstan becomes a favorable destination for miners

Two Chinese cryptocurrency mining companies have begun expanding their operations abroad due to the recent crackdown on mining activities. Kazakhstan has become a favorable destination for them, with the country expected to host several other crypto mining firms in the future.

In a press release yesterday, publicly-listed BIT Mining announced that it had successfully delivered 320 mining machines with a theoretical maximum total hash rate capacity of 18.2 PH/s. The machines would be fully operational in a few days.

BIT further added that it intends to ship another 2,600 mining machines to Kazakhstan by next week. The mining hardware will have a theoretical maximum total hash rate capacity of 102.3 PH/s. The company had begun investing in Kazakhstan before the ban on cryptocurrency mining activities in China.

Canaan, one of the leading Bitcoin mining hardware manufacturers, announced in a press release earlier today that it has set up a base of operations in Kazakhstan. The company is making an effort to diversify into Bitcoin mining operations while also selling the mining rigs. Canaan is expecting to expand its operations in Kazakhstan over time, thanks to the crypto-friendly nature of the country.

China’s latest crackdown affects crypto miners

Several provinces in China have banned cryptocurrency mining activities. Sichuan province announced its measure last week, with 26 Bitcoin mining farms no longer enjoying power supply from the region.

BTC/USD chart. Source: FXEMPIRE

The measures taken by the People’s Bank of China directing banks and financial institutions to cut off payment channels further made it hard for crypto traders. As a result, Bitcoin’s price slipped below the $30k region for the first time since the start of the year.

However, the leading cryptocurrency’s price is slowly recovering, and it is currently trading close to $34k per coin.

Powell Calms Markets

He repeated the temporary nature of current price pressures and although the recent debate on QE is on the cards, the Fed is nowhere near hiking interest rates. Other Fed officials this week have spread a similar message with New York Fed President Williams warning overnight that the recovery requires more time.

The latest smoke signals from the Fed all point to September as the key meeting when the Fed is most probably able to declare that substantial progress towards their goals has been achieved. This means we should perhaps pencil in the Jackson Hole symposium in August as the precursor to this where Powell really preps the markets.

Stocks certainly gained from the more dovish rhetoric with the tech-laden Nasdaq hitting fresh record highs. The broader S&P500 gained too with only the defensive utilities sector in the red. European bourses have opened up this morning marginally higher after Asian markets posted solid gains.

Dollar holding up for now

After hitting a two-month high at the end of last week, the greenback has suffered two days of losses and given back roughly a third of its sharp gains posted since the FOMC meeting last Wednesday.

Commodity-linked currencies benefitted the most from the more cautious Powell and this may be the case through the summer as those central banks on the hiking cycle see their currencies appreciate the most.

EUR/USD too was helped by markets breathing a sigh of relief, although the 1.20 barrier above is formidable with a confluence of resistance including the 50% retracement level and the 100-day and 200-day simple moving averages below and above.

EUR/GBP moving lower ahead of BoE

We get UK and European PMI data released today and traders will be on the look out for signs that we have seen a peak in manufacturing and a pick up in services due to covid restrictions easing. EUR/GBP also has to contend with the Bank of England meeting tomorrow, which my colleague Han Tan discussed yesterday and the potential for a hawkish surprise.

Perhaps the market read the report as sterling has appreciated against almost every single G10 currency today and EUR/GBP is breaking down through recent support at 0.8542. The downward trendline from the December high has acted as resistance above and bears have their eyes on the cycle low at 0.8472.

By Lukman Otunuga Research Analyst


Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

AUD/USD Forex Technical Analysis – Chart Pattern Suggests Normal Retracement into .7627 to .7662 is Likely

The Australian Dollar is trading higher on Wednesday as traders attempt to close higher for a third straight session. Helping to generate some of the upside momentum are lower Treasury yields and increased demand for riskier assets.

U.S. Treasury yields dipped slightly overnight as investors continued to digest Federal Reserve Chair Jerome Powell’s bullish comments on economic recovery in a testimony to Congress Tuesday afternoon.

At 08:46 GMT, the AUD/USD is trading .7570, up 0.0014 or +0.19%.

The Fed Chair reiterated to Congress that the central bank will not raise interest rates until there are signs of a “broad and inclusive” recovery in the job market and economy.

“We will not raise interest rates preemptively because we fear the possible onset of inflation. We will wait for evidence of actual inflation or other imbalances,” Powell said in a hearing before a U.S. House of Representatives panel.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the formation of the closing price reversal bottom on June 21.

Taking out .7477 will negate the closing price reversal bottom and signal a resumption of the downtrend. The main trend will change to up on a trade through .7776. This is highly unlikely, but there is room for a normal 50% to 61.8% retracement of its last sell-off.

The major support is a retracement zone at .7499 to .7379. This zone stopped the selling at .7477 on June 21. This zone is also controlling the near-term direction of the AUD/USD.

The short-term range is .7776 to .7477. Its retracement zone at .7627 to .7662 is the next upside target area.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to .7525.

Bearish Scenario

A sustained move under .7525 will indicate the presence of sellers. This could trigger a further break into the main 50% level at .7499, followed by the main bottom at .7477 and the December 21, 2020 main bottom at .7462.

Bullish Scenario

A sustained move over .7525 will signal the presence of buyers. If this move continues to generate enough upside momentum then look for the rally to possibly extend into the short-term retracement zone at .7627 to .7662 over the near-term.

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

Does The Fed Driven Dip In Metals Offer A Buying Opportunity?

Speaking before a House Select Subcommittee on the Coronavirus Crisis on Tuesday – Fed Chair Jerome Powell once again admitted that rising inflationary pressures ” have been higher than we expected, and they may turn out to be more persistent than we expected”.

Despite mixed signals from the Fed, once you take a step back and look at the bigger picture – the Fed remains about as dovish as ever. When CPI Inflation data is running at a hot pace of 5%, it’s hardly hawkish to say there is a chance price acceleration is faster and lasts longer than anticipated. It already is, and it already has.

Now more uncertainty may be on the way ahead of the central bank’s next meeting in July and its annual conference in Jackson Hole, in late August, where it could announce more details of its tapering plans. However, traders are already calling Powell’s bluff on rate hikes and remain convinced that higher inflation is here to stay and won’t be ‘transitory’ like the Fed claims.

Looking ahead to this week, the biggest market-moving events that traders will be closely for clues on the markets next big move include; U.S. Final Q1 GDP and the Fed’s preferred measure of inflation – PCE price data.

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

Gold Price Forecast: Gold Must Hold $1750 or Risk a Larger Breakdown

Our Gold Cycle Indicator finished at eight (8). If it sinks below zero, I will put the available funds to work in the Premium Metals Portfolio.

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GOLD DAILY

Gold formed a bullish engulfing candle on Monday. Prices need a strong close above $1800 to support a possible bottom. A continued breakdown below $1750 would promote a retest of the March lows and potentially lower.

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SILVER DAILY

Silver prices are constructing a multi-month ascending triangle. Prices need to hold support near $25.00 to maintain the structure. The pattern continues to favor an upside breakout above $30.00. On the bearish side, prices would have to break below $22.00 to recommend a more profound correction back towards support surrounding $19.00.

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PLATINUM

Platinum formed a swing low after testing support surrounding $1040. I’d like to see progressive closes back above $1100 to recommend a bottom. Otherwise, a continued breakdown below $1000 would support a drop back towards $800.

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GDX

Gold miners are trying to hold support surrounding $34.00. It would take a daily close above $35.10 to form a swing low. However, to recommend a bottom, I would need to see a decisive close above $37.00.

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SPY

Stocks reversed once again near the 50-day EMA and are rapidly approaching fresh highs. The trend looks exhausted, and we are overdue for a multi-week correction. At this point, it is more of a question of when and not if, in my opinion.

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BITCOIN DAILY CHART

Bitcoin dipped briefly below $30,000 to test critical support surrounding $28,000. This area must hold to maintain the potential for an advance to fresh highs (above $65,000) by year-end. A continued breakdown below $28,000 would confirm a new bear market in Bitcoin and subsequent crypto-winter.

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My Bitcoin analysis still supports one final rally towards $90,000 by year-end, but the crackdown in China and brewing regulatory pressures in the U.S. may prove overwhelming. Prices must hold $28,000.

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

AUD/JPY Moves with a Flow

If the market makes a retracement towards the POC zone within 94.00, we might see a move down. Potential move could be targeting 83.30, 83.02. The break of 83.00 level should be targeting 82.62. Only if the price gets above 84.00, bears will be in danger. Selling the rallies is the option now.

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

Cheers and safe trading,

Nenad

 

USD/JPY Forex Technical Analysis – March Top at 110.966 Potential Triggerpoint for Upside Acceleration

The Dollar/Yen is trading higher on Wednesday after fully recovering from last week’s steep sell-off. The rally is being fueled by increasing demand for risky assets, led by the strong recovery in the U.S. stock market. Weak economic data from Japan is also helping to drive the rally as investors continue to bet on the U.S. economy recovering at a much faster pace than the Japanese economy.

At 07:33 GMT, the USD/JPY is trading 110.874, up 0.18% or +0.18%.

Later in the session at 13:45 GMT, USD/JPY traders will get a chance to see just how well the U.S. economy is recovering with the release of Flash Manufacturing and Services PMI data.

Flash Manufacturing PMI is expected to come in at 61.5, down from the previously reported 62.1. Flash Services PMI is expected to come in at 70.0, down from last month’s 70.4 reading.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 110.823 earlier in the session reaffirmed the uptrend. A move through 109.717 will change the main trend to down.

The USD/JPY is currently trading on the strong side of the short-term retracement zone at 109.634 to 109.223, making this area new support.

Daily Swing Chart Technical Forecast

The direction of the USD/JPY on Wednesday is likely to be determined by trader reaction to 110.671.

Bullish Scenario

A sustained move over 110.671 will indicate the presence of buyers. This could trigger a rally into the March 31 main top at 110.966.

The daily chart indicates that there is plenty of room to the upside over 110.966 with the March 24, 2020 main top the next major target. Depending on the buying volume, we could see either an acceleration to the upside or a steady climb.

Bearish Scenario

A sustained move under 110.671 will signal the presence of sellers. The first potential downside target is a minor pivot at 110.314.

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

Demand for Energy Ticks Up at World’s Biggest Economy

At the time of writing this report, the British based oil contract Brent crude futures broke past $75 a barrel while the West Texas Intermediate futures soared past $73 a barrel. Both major oil benchmarks are up by more than 0.4% for the day.

Recent data collated from the American Petroleum Institute revealed the inventories at the world’s biggest economy dropped by about 7.2 million barrels for the week ending June 18. Experts had earlier predicted a decent drop of about 3.63 million barrels, triggering Brent crude bulls to head toward the next main target at $76 a barrel as energy demand gathers momentum.

Oil traders would affirm such bias from the U.S Energy Information Administration, due later in the day, with demand for fuel going north in key emerged markets including the United States and China on continued economic recovery from COVID19.

Broader market sentiments show a number of oil traders are hoping for a positive outcome of the Organization of the Petroleum Exporting Countries and allies (OPEC+) meeting scheduled to hold next week for insights on their crude oil output strategy.

On the supply end, the oil cartel group, due to meet next week to discuss its output quota, with Russia and some OPEC+ members considering a potential supply hike in August, though supply/demand imbalance should support a continued bullish trend in oil prices.

The most recent forecast on the black viscous hydrocarbon suggests that Brent oil could hit $100 per barrel in 2022 as pent-up oil demand gets unleashed on a post-COVID-19 world.

Bitcoin Failed To Settle Below The Key Support Level At $30,000

Bitcoin Enjoys Strong Rebound

Bitcoin has recently made an attempt to settle below the key support level at $30,000 but lost momentum and rebounded closer to the resistance at $35,000.

This is a very positive development for crypto bulls as Bitcoin’s move below $30,000 would have had a serious negative impact on the crypto market.

Not surprisingly, other cryptocurrencies are gaining ground. Ethereum is currently trying to settle back above the $2,000 level. Dogecoin is testing the resistance at $0.2150. XRP enjoys a very strong rebound and is trying to move back above $0.65.

Bitcoin Dominance, which shows Bitcoin’s market capitalization as a percentage of total crypto market capitalization, has pulled back a bit from recent highs near 48%. However, its trend remains bullish, and it looks that Bitcoin has a decent chance to increase its market share in case it manages to get back above the resistance at $35,000 and move towards the $40,000 level.

Technical Analysis

bitcoin june 23 2021

Bitcoin managed to get back above the resistance at $32,000 and is trying to get to the test of the next resistance level which is located at $35,000. In case Bitcoin manages to settle above the resistance at $35,000, it will head towards the resistance at the 20 EMA at $36,300.

A successful test of the resistance at the 20 EMA will open the way to the test of the next resistance level at $38,000. If Bitcoin gets above this level, it will head towards the key resistance level at $40,000.  This resistance level has already been tested many times and proved its strength. In addition, the 50 EMA is located at $40,500, so Bitcoin will likely face strong resistance in the $40,000 – $40,500 area.

On the support side, Bitcoin needs to settle back below $32,000 to have a chance to get to another test of the key support level at $30,000. A move below $30,000 will push Bitcoin towards the recent lows at $28,800. A successful test of this level will signal that Bitcoin is ready to continue its downside move.

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