Silver Price Prediction – Prices Tumble as the Dollar Rallies Despite Weak Jobless Claims Data

Silver prices tumbled on Thursday, breaking through support levels and poised to test lower levels. The dollar rallied following the Fed’s more hawkish than expected commentary on Wednesday, as 7-Fed governors now expect the Fed to raise rates in 2022. Jobless claims rose more than expected, which helped the 10-year yield ease following Wednesday’s rally. According to Mortgage News Daily, the average rate on the popular 30-year fixed mortgage moved decidedly higher, hitting 3.25%.

Technical Analysis

Silver prices tumbled on Thursday, breaking down and forming a topping pattern. Support is seen near an upwards sloping trend line that comes in near $25.07. Resistance is seen near the 50-day moving average at 27.01. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is flat as the MACD (moving average convergence divergence) histogram is printing in positive territory with a sliding trajectory that points to consolidation. After consolidating for weeks, prices have declined for 4-consecutive trading days but will like seeing buyers come near trend line support.

Yields Ease on Weak Claims Report

Initial jobless claims came in higher than expected, showing that the recovery in employment is not a straight line. First-time filings for unemployment insurance for the week ended June 12 totaled 412,000, compared with the previous week’s 375,000. Expectations were for a decline to 360,000. Since the Fed makes its decisions based on employment and price stability they are likely to let inflation run a bit hotter than expected to help buoy employment.

Tech-Heavy Nasdaq Ignores Hawkish Fed News to Advance

The performance of the tech-heavy Nasdaq was in stark contrast to the S&P 500 and Dow, which slumped as investors reacted negatively to the Fedeignoral Reserve’s unexpectedly hawkish message on monetary policy on Wednesday.

Chipmaker Nvidia Corp jumped 5.4%, leading the charge among technology behemoths after Jefferies raised its price target on the stock.

Technology shares, which generally perform better when interest rates are low, powered a rally on Wall Street last year as investors flocked to stocks seen as relatively safe during times of economic turmoil.

The group has come under pressure this year on fears that rising inflation would lead the Fed to hike interest rates sooner than expected. The central bank on Wednesday moved its first projected rate increases from 2024 into 2023.

Still, shares of Apple Inc, Microsoft Corp, Amazon.com Inc and Facebook Inc reversed premarket declines to rise between 1.4% and 2% as investors bet that a steady economic rebound would boost demand for their products in the long run.

“Yes there is rising inflation but the market is focusing more on the positives of improving earnings, robust GDP growth and the wider economy getting stronger,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab in Austin, Texas.

“Today’s action is indicative that the Fed hasn’t said anything that the market didn’t already know.”

The Nasdaq briefly advanced to within 16 points of its lifetime peak achieved on April 29, before pulling back a touch.

By 1:55PM ET, the Dow Jones Industrial Average fell 198.57 points, or 0.58%, to 33,835.1, the S&P 500 gained 0.24 points, or 0.01%, to 4,223.94 and the Nasdaq Composite added 127.04 points, or 0.9%, to 14,166.73.

Interest rate-sensitive bank stocks slumped -3.8% as longer dated U.S. Treasury yields dropped.

The strengthening dollar, another by-product of the previous day’s Fed news, pushed U.S. oil prices down from the multi-year high hit earlier in the week. The energy index, in turn, fell more than 3%, the biggest laggard among the 11 main S&P sectors.

Other economically sensitive stocks including materials and industrials fell 2.4% and 1.5% respectively, as data showed jobless claims rising last week for the first time in more than a month. Still, layoffs appeared to be easing amid a reopening economy and a shortage of people willing to work.

“In the balance of June and into the summer we anticipate continued volatility as we get more signals from economic data, Fed policy and as we get into the earnings season,” said Greg Bassuk, chief executive officer at AXS Investments in New York.

In corporate news, U.S.-listed shares of CureVac NV sank 41.5% after the German biotech said its COVID-19 vaccine was 47% effective in a late-stage trial, missing the study’s main goal.

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

(Reporting by Shashank Nayar and Medha Singh in Bengaluru; Editing by Sriraj Kalluvila, Anil D’Silva, Maju Samuel and Dan Grebler)

 

Natural Gas Price Prediction – Prices Consolidate as Storm in the Gulf Brews

Natural gas prices consolidated and moved slightly lower on Thursday in the wake of the Energy Departments’ inventory report. Expectations are for a 79 Bcf build in stockpiles, according to survey provider Estimize. There is a storm in the Gulf of Mexico which the National Oceanic Atmospheric Administration believes has a 90% chance of forming a tropical cyclone in the next 48-hours. The weather is expected to be mild and slightly warmer on the coast over the next 6-10 and 8-14 days, according to NOAA.

Technical

Natural gas prices moved slightly lower on Thursday bouncing near the 10-day moving average at 3.19. Resistance is seen near the June highs at 3.37. Short-term momentum is negative as the fast stochastic generated a crossover sell signal and moved from overbought to neutral. Medium-term momentum is positive but decelerating as the MACD (moving average convergence divergence) histogram print in the black with a declining trajectory points to consolidation.

 Inventories Rise Less than Expected

Natural gas in storage was 2,427 Bcf as of Friday, June 11, 2021, according to the EIA. This represents a net increase of 16 Bcf from the previous week. Expectations were for a 79 Bcf build. Prices should have moved higher. Stocks were 453 Bcf less than last year at this time and 126 Bcf below the five-year average of 2,553 Bcf. At 2,427 Bcf, total working gas is within the five-year historical range.

Oil Price Fundamental Daily Forecast – Strong Dollar Dragging Down Commodities including Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are down over 2% late in the session on Thursday. Technical factors as well as a strong U.S. Dollar are weighing on prices. Overbought technical indicators are encouraging profit-taking after the markets posted a 17-session rally, while the strong dollar is reducing foreign demand for the dollar-denominated commodity.

At 17:45 GMT, September WTI crude oil futures are trading $69.63, down $1.64 or -2.30% and September Brent crude oil is at $71.94, down $1.65 or -2.24%.

Outside factors are also putting pressure on the markets. On Wednesday, the Federal Reserve signaled it might raise interest rates as soon at 2023. Additionally, buyers are being a little cautious on concerns over a possible U.S.-Iran nuclear agreement. But an upcoming election in Iran on Friday could scuttle the nuclear talks and leave U.S. sanctions on Iran’s oil exports in place.

Dollar Jumps after Fed Pulls Interest Rate Hikes into 2023

The dollar jumped against a basket of currencies on Wednesday and Thursday after the Federal Reserve brought forward its projections for the first post-pandemic interest rate hikes into 2023, citing an improved health situation and dropping a longstanding reference that the crisis was weighing on the economy.

Overbought Technical Conditions Encouraging Profit-Taking

To put it simply, the rallies in WTI and Brent crude may have just run out of steam. Prices may have moved ahead of the fundamentals, which made investors nervous enough to begin trimming positions. Bullish traders could just be looking for value also, growing tired of chasing the headlines. A short-term correction may be necessary to drive prices into a value zone, where the markets will once again attract new buyers.

US-Iran Nuclear Deal Could Be the Wildcard

The U.S. and Iran have been having on and off discussions since April. For months, oil traders have been worrying about new crude supply from Iran coming onto the market. This fear was thought to have been put to bed about two weeks ago when a U.S. official said the lifting of sanctions on Iran may not necessarily mean its oil could come onto the market.

Traders are a little nervous at this time because they aren’t confident in the outcome of the deal. Furthermore, it is very possible that the nuclear talks fall apart. That would probably be the best outcome for higher prices.

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

Gold Price Prediction – Prices Fall as the Dollar Rallies Paving the Way for Lower Gold Prices

Gold prices continued to decline as the dollar rallied paving the way for lower gold prices Since gold is priced in dollars, it generally adjusts lower as it becomes more expensive in other currencies excluding the greenback. The U.S. 10-year yield reversed its rally, but the 2-year yield remained strong. Jobless claims came in larger than expected which is critical following Wednesday’s Federal Reserve meeting.

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Technical analysis

Gold prices moved lower declining for the 4th consecutive trading day, and poised to Test the November 2020 lows of 1,764. Resistance is seen near the 50-day moving average at 1,830.  Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Prices are oversold. The current reading on the fast stochastic is 8, below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

Jobless Claims Rise

The Labor Department reported that Initial jobless claims unexpectedly rose last week despite an ongoing recovery. First-time filings for unemployment insurance for the week ended June 12 totaled 412,000, compared with the previous week’s 375,000. Expectations were for a decline to 360,000. This is interesting in the wake of the Fed’s decision as employment is the key for higher rates. If claims continue to remain elevated, the Fed will remain on hold.

Price of Gold Fundamental Daily Forecast – Gold Testing Support but Needs Dollar, Yield Dip to Fuel a Rebound

Gold futures are plunging at the mid-session, testing their lowest level since April 30 in the process, while putting the market in a position to post its biggest weekly loss in weeks. The catalyst behind the move is the Fed’s signal that it might raise interest rates at a much faster pace than assumed.

At 16:25 GMT, August Comex gold is trading $1772.70, down $39.90 or -2.20%.

Fed Turns Hawkish

Bond yields and the dollar rose sharply on the surprise news from the Fed, reducing foreign demand for gold and its dampening its investment appeal.

On Wednesday, the Fed raised its headline inflation expectation to 3.4%, a full percentage point higher than the March projection, after its two-day policy meeting concluded on Wednesday afternoon. However, the post-meeting statement reiterated the Fed’s view that inflationary pressures were “transitory.”

The Fed also indicated that rate hikes could come as soon as 2023, after saying in March that it saw no increases until at least 2024. The so-called dot plot of individual member expectations pointed to two hikes in 2023.

With the Fed apparently taking a bit of a more hawkish turn, traders now anticipate good economic data to have a negative effect on gold prices. Increasingly confident in the U.S. economy recovery, the Fed is seen most likely launching its tapering of its $120 billion-a-month asset purchase program in January, according to a Reuters poll.

The Fed on Wednesday also signaled it would now be considering whether to taper those purchases meeting by meeting, and downgraded the risk from the pandemic given progress with vaccinations.

Daily Outlook

Going into the close, gold traders have to be aware of the possibility of volatility or a counter-trend rebound. One reason for a late session reversal is that gold is currently testing the 50% to 61.8% retracement area of the March 8 to June 1 rally. Trader reaction to $1798.80 to $1770.40 will set the tone into the close.

A drop in Treasury yields or a dip in the U.S. Dollar could stop the selling also. The key 10-year Treasury yield dipped Thursday as investors digested the Federal Reserve’s policy update and a big sell-off in commodities.

The yield on the benchmark 10-year Treasury note fell 8 basis points to 1.49%. The yield on the 30-year Treasury bond dropped 13 basis points to 2.07%.

Gold could bounce off its low or the Fib level at $1770.40 is yields continue to dip or the dollar breaks from its intraday against a basket of currencies.

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

USD/INR: Rupee Drops Most in Over Six Weeks, Breaches 74-Mark

The Indian rupee declined to its lowest in over six weeks on Thursday, depreciating by 97 paise against the U.S. dollar for the eighth straight day as the strong greenback and high oil prices put pressure on the battered Asian currency.

The USD/INR rose to an intraday high of 74.239 – hit its weakest since May 3 – against the U.S. currency from Wednesday’s close of 73.27. The rupee has lost nearly 178 paise so far this month and weakened 100 paise in the four trading sessions.

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, rose 0.62% to 91.696. That was largely driven by the Fed’s dot plot released on Wednesday, which suggested an expectation of two rate hikes in 2023. The U.S. benchmark 10-year Treasury yield jumped 7.5 basis points.

Other than the FOMC monetary policy statement, retail sales and industrial production data would be critical for investors and a better-than-expected release could support the mighty greenback.

The benchmark equity indices also ended lower for the second consecutive day, closing down 178.65 points or 0.34% lower at 52,323.33, while the broader NSE Nifty fell 76.15 points or 0.48% to 15,691.40.

On the other hand, global oil benchmark Brent futures fell 0.78% to $73.83 per barrel. Foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 870.29 crore, as per provisional data.

“Sentiments remained frail as the recent recovery in the U.S., the world’s largest economy, and upbeat inflation data raised hopes over a slightly hawkish approach and potential interest rate hike,” noted Manish Pargi, currency analyst at Angel Broking.

“Bets on the shift in the monetary stance by the U.S. Central Bank gave strengthen to the U.S. currency. Strong demand for the dollar by importers and banks amid soaring crude oil prices undermined the domestic currency.”

USD/CAD Daily Forecast – Canadian Dollar Declines Amid Sell-Off In Commodities

U.S. Dollar Continues To Gain Ground Against Canadian Dollar

USD/CAD is currently trying to settle above 1.2350 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the resistance at 91.80. In case this test is successful, the U.S. Dollar Index will move towards the 92 level which will be bullish for USD/CAD.

Today, U.S. reported that Initial Jobless Claims increased from 375,000 (revised from 376,000) to 412,000 compared to analyst consensus of 359,000. Continuing Jobless Claims remained unchanged at 3.52 million compared to analyst consensus of 3.43 million.

In Canada, ADP Employment Change report indicated that employment increased by 101,600 jobs in May compared to analyst forecast of 250,000.

The reports had little impact on currency dynamics on the foreign exchange market as traders focused on the new data from the Fed which showed that the Fed expected two rate hikes in 2023.

Canadian dollar received a double blow from the Fed and the sell-off in commodity markets, so USD/CAD managed to get from 1.2200 to 1.2350 in just two trading sessions. If the sell-off in commodity markets continues, Canadian dollar and other commodity-related currencies will move lower.

Technical Analysis

usd cad june 17 2021

USD to CAD managed to get above the resistance at 1.2325 and is trying to settle above the next resistance level at 1.2350. RSI has recently moved into the overbought territory, but USD to CAD may gain more upside momentum in case the right catalysts emerge.

If USD to CAD manages to settle above the resistance at 1.2350, it will head towards the next resistance at 1.2385. A successful test of this level will open the way to the test of the resistance at 1.2420. If USD to CAD gets above this level, it will head towards the resistance at 1.2450.

On the support side, the previous resistance at 1.2325 will serve as the first support level for USD to CAD. In case USD to CAD manages to settle below this level, it will head towards the next support level which is located at 1.2300.

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

Why Gold Mining Stocks Are Under Pressure Today

Gold Mining Stocks Retreat As Gold Moves Below The $1800 Level

Gold mining stocks are under strong pressure today as gold declined below the $1800 level after Fed indicated that it expected two rate hikes in 2023.

The weakness is broad, and notable gold mining stocks like Barrick Gold, Newmont Corporation, Kinross Gold or Yamana Gold are down by 4 – 6% in today’s trading session.

Most gold mining stocks have already lost a lot of ground in June as gold’s previous rally was stopped near the $1900 level and traders began to take profits in shares of gold miners.

The recent sell-off in the gold market put additional pressure on gold mining stocks which are now trading at levels that were seen back in April.

What’s Next For Gold Mining Stocks?

Near-term dynamics of gold mining stocks will depend on the dynamics of the gold market. Gold moved from $1900 to $1775 in just five trading sessions and its RSI reached the oversold territory, so the chances of a rebound are increasing.

It should be noted that gold mining stocks provide investors and traders with leverage to the price of gold. This leverage works both ways so gold mining stocks are typically declining faster than the price of gold in case gold moves lower.

Gold mining stocks have started to pull back after rally in March – May before gold began to lsoe ground at a fast pace, so some traders were prepared to the recent sell-off.

However, it remains to be seen whether traders will rush into the segment in the current market environment as higher interest rates present a serious threat to precious metals.

I’d note that Treasury yields have failed to gain additional upside momentum after yesterday’s rally, and the yield of 10-year Treasuries declined from 1.59% to 1.53%. If bond markets calm down, gold prices will stabilize, and gold mining stocks will have a good chance to rebound from current levels.

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

Natural Gas Price Fundamental Daily Forecast – Buyers Could Find Value at $3.146 to $3.093

Natural gas futures are edging lower shortly before the release of the government’s storage report at 14:30 GMT. Technical resistance is keeping a lid on prices, while the market is being underpinned by lower production, rising liquefied natural gas exports and expectations of increased cooling demand.

At 13:37 GMT, September natural gas is trading $3.229, down $0.030 or -0.92%.

Prices Capped by Technical Factors

After surging to the upside earlier in the week, the rally stalled and prices retreated before consolidating the last two days. It “occurred even though near-term supply/demand fundamentals were largely unchanged – a clear indicator that technical factors and machine-driven algorithmic trading were moving the market,” EBW Analytics Group said.

Bespoke Weather Forecast

Bespoke Weather Services observed little day/day change in its latest projections Wednesday, with heat remaining a dominant theme over large swaths of the country. That is expected to translate into elevated demand for natural gas to power air conditioners.

The pattern remains “hotter-biased” even with “some cooler weather into the Midwest and East at times, as western heat, plus hotter temperatures down in Texas, is enough to offset the cooling,” Bespoke said. “We remain on pace to come close to record hot levels for June as a whole” in terms of national gas-weighted degree days, “with the expectation that the hotter bias of the pattern rolls on into July.”

Lower Production Supportive

Production dipped lower to around 90 Bcf, Bespoke noted, down from recent highs above 92 Bcf. Liquefied natural gas (LNG) levels also ticked up and held near 10 Bcf, Natural Gas Intelligence (NGI) reported.

Energy Information Administration Weekly Storage Report

Analysts are looking for a lighter-than-usual storage injection with today’s EIA inventory report.

NGI is reporting that a Bloomberg survey showed a median estimate for a 70 Bcf injection for the week-ended June 11. Responses ranged from 65 Bcf up to 76 Bcf. A Reuters poll of analysts, whose estimates ranged from a build of 64 Bcf to 76 Bcf, landed at a median injection of 73 Bcf.

NGI’s model predicted a 74 Bcf injection for this week’s report. Last year EIA recorded an 86 Bcf build for the similar week, and the five-year average is an injection of 87 Bcf.

Daily Forecast

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $3.370 will signal a resumption of the uptrend with potential targets lined up at $3.377, $3.447 and $3.526. A trade through $3.025 will change the main trend to down.

The minor range is $3.025 to $3.370. Its 50% price at $3.198 is currently acting like support.

The short-term range is $2.922 to $3.370. Its retracement zone at $3.146 to $3.093 is the strongest support area. A test of this level could attract new buyers.

The fundamentals are bullish, but traders seem to have made the decision to buy dips rather than strength at this time. In other words, it’s more important for them to get a good price rather than chase the market higher at this time.

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

Silver Price Daily Forecast – Silver Is Under Serious Pressure

Silver Tests Support At $26.30

Silver is currently trying to settle below the support at $26.30 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index managed to settle above the resistance level at 91.50 and is trying to settle above the next resistance at 91.80. In case this attempt is successful, the U.S. Dollar Index will move towards the resistance at 92 which will be bearish for silver and gold price today.

Meanwhile, gold declined below the $1800 level and made an attempt to settle below $1775. In case gold manages to settle below $1775, it will head towards $1750 which will be bearish for silver.

Gold/silver ratio is currently trying to settle above the resistance at the 50 EMA at 67.80. In case this attempt is successful, gold/silver ratio will gain additional upside momentum and head towards the resistance at 68.70 which will be bearish for silver.

Silver found itself under strong pressure due to stronger dollar, higher Treasury yields and higher gold/silver ratio. However, Treasury yields have pulled back from recent highs, so silver may have a chance to gain some upside momentum in case Treasury yields move lower.

Technical Analysis

silver june 17 2021

Silver settled below the support at $26.65 and is trying to settle below the next support level at $26.30. RSI remains in the moderate territory despite the recent sell-off so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

If silver manages to settle below $26.30, it will move towards the support level which is located at $25.80. A successful test of this level will open the way to the test of the support at $25.50.

On the upside, the previous support at $26.65 will serve as the first resistance level for silver. If silver manages to get back above this level, it will move towards the next resistance at $27.00. A move above the resistance at $27.00 will push silver towards the resistance at the 50 EMA at $27.15.

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

Nike’s Long-Term Story Intact, Raises Price Target to $185: Morgan Stanley

Morgan Stanley raised their stock price forecast on Nike to $185 from $172 and said near-term headwinds well flagged but long-term story intact.

The world’s largest athletic footwear and apparel seller Nike is expected to report its fiscal fourth-quarter earnings of $0.51 per share, which represents year-over-year growth of 200% from a loss of $0.51 per share seen in the same period a year ago.

The Beaverton, Oregon-based footwear retailer would deliver +33% y/y revenue growth. Nike shares slumped about 8% so far this year.

Analyst Comments

“Revenue is a well-understood risk in 4Q, & our predictive model’s outlook has improved. Our online discount tracker suggests GM upside, & SG&A guidance appears conservative, which could drive an EPS beat. ST risk appears priced in per YTD underperformance. Stay OW & raise price target to $185 on lower WACC,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

NKE is in the early innings of transition from a wholesaler to a DTC brand. Success would make it one of few to benefit from the shift to eComm (~15% of ‘20 sales). Its DTC business (~33% of ‘20 sales) should ignite its next phase of margin-accretive revenue growth, driving a 29% 5Y EPS CAGR. NKE also stands to benefit from advancing global consumer activewear demand (due to the WFH-induced preference for comfort-oriented apparel/footwear and increased focus on health & wellness). NKE’s strategic portfolio decisions, tech investments, and supply chain innovation also create LT competitive advantages, and are further supported by an industry-leading balance sheet.”

Nike Stock Price Forecast

Eighteen analysts who offered stock ratings for Nike in the last three months forecast the average price in 12 months of $166.94 with a high forecast of $192.00 and a low forecast of $140.00.

The average price target represents 28.02% from the last price of $130.40. Of those 18 analysts, 15 rated “Buy”, two rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley raised the stock price forecast to $185 from $172 with a high of $354 under a bull scenario and $97 under the worst-case scenario. The firm gave an “Overweight” rating on the footwear company’s stock.

Several other analysts have also updated their stock outlook. UBS cut the price target to $170 from $175. Jefferies raised the target price to $192 from $140. Barclays cut the target price to $165 from $174. Cowen and company slashed the price target to $145 from $155.

“There are many moving pieces in the NKE model including an easy comparison from Q4:20 and shipment shifts into Q4:21 but our proprietary data on China through May 2021 is pointing to a continued deceleration in Tmall GMV, negative social media sentiment in China, and poor Baidu search trends. FY22 consensus EPS estimates appear too high. We are lowering our price target to $145,” noted John Kernan, equity analyst at Cowen.

Check out FX Empire’s earnings calendar

JPMorgan Chase Could Sell Off to 140

Dow component JPMorgan Chase and Co. (JPM) could trade lower in coming weeks after CEO Jamie Dimon warned the banking giant will book about $6 billion in second quarter trading revenue, down 38% over the same period in 2020. Citigroup Inc. (C) CFO Mark Mason reiterated this bearish theme, warning about a 30% decline. Windfall revenue in these divisions bolstered profits during the pandemic, keeping a floor under the banking industry’s equity prices.

Mixed Catalysts Heading Into Third Quarter

Federal Reserve Chairman Jerome Powell eased investor anxiety on Wednesday, declaring the U.S. economy had recovered faster than expected, setting the stage for interest rate hikes that have been off-the-table during the pandemic.  Higher rates steepen the spread between the prices that banks pay for capital and the prices paid by corporations seeking loans, improving profits. However, higher rates can also curtail lending volumes, especially after two or three hikes.

Dimon ended his comments on an upbeat note, reminding listeners that “The quarter last year was exceptional. The last quarter is exceptional. This quarter is what I call more normal…which is still pretty good.” Meanwhile, Mason examined reasons for the surge, noting “If you think back to the second quarter of 2020, at least for Citi, we were looking at Markets revenues back then that were up 50%. We had seen record levels of debt issuances from our clients.”

Wall Street and Technical Outlook

Wall Street consensus on JPMorgan remains bullish despite mixed catalysts, with an ‘Overweight’ rating based upon 15 ‘Buy’, 2 ‘Overweight’, 6 ‘Hold’, and 1 ‘Underweight’ recommendation. In addition, 3 of 27 analysts recommend that shareholders close positions and move to the sidelines. Price targets currently range from a low of $110 to a Street-high $200 while the stock is set to open Thursday’s session more than $15 below the median $171 target.

A JPMorgan uptrend topped out at 141 in January 2020, ahead of a steep pandemic decline. The subsequent uptick reached the prior high in January 2021, yielding a February breakout that added 26 points into early June’s all-time high at 167.44. The pullback since that time has sliced through the 50-day moving average while accumulation has dropped to a 4-month low. This price action raises odds for downside that could offer a buying opportunity in the low 140s.

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

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Daily Gold News: Thursday, June 17

The gold futures contract lost 2.40% on Wednesday, as it broke below its recent local lows following the 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 close to $1,800 price level, as we can see on the daily chart (the chart includes today’s intraday data):

Today gold is 0.7% lower. What about the other precious metals? Silver is 1.2% lower, platinum is 1.4% lower and palladium is 1.9% lower today. So precious metals are lower this morning.

Yesterday’s Building Permits and Housing Starts releases have been slightly worse than expected. But the markets have reacted to the FOMC Statement announcement at 2:00 p.m. The Fed increased its interest rate paid on required and excess reserve balances from 0.10% to 0.15%.

Today we will get the Unemployment Claims and Philly Fed Manufacturing Index releases. We will also have the Bank of Japan Monetary Policy Statement later in the day.

Where would the price of gold go following yesterday’s FOMC release? We’ve compiled the data since January of 2017, a 51-month-long period of time that contains of thirty five FOMC releases. The first chart shows price paths 5 days before and 10 days after the FOMC release. We can see that the biggest 10-day advance after the FOMC day was +10.5% after March 15, 2020 release and the biggest decline was -7.2% after March 3, 2020 release. But we’ve had an increased volatility following coronavirus fear then.

The latest FOMC Statement release came out on April 28. Gold price was 2.8% higher 10 days after the release.

The following chart shows average gold price path before and after the FOMC releases for the past 35 releases. The market was usually declining ahead of the FOMC day. Then it was going up for a week-long period. We can see that on average, gold price was 0.64% higher 10 days after the FOMC Statement announcement.

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

Thursday, June 17

  • 8:30 a.m. U.S. – Unemployment Claims, Philly Fed Manufacturing Index
  • Tentative, Japan – Monetary Policy Statement, BOJ Policy Rate

Friday, June 18

  • Tentative, Japan – BOJ Press Conference

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.

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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.

 

Finalized Inflation Figures for the Eurozone Delivers Little EUR Support

It was a quiet start to the day on the economic calendar, with stats limited to finalized inflation figures for the Eurozone.

In May, the annual rate of inflation accelerated from 1.6% to 2.0%, which was in line with prelim numbers. Consumer prices increased by 0.3% in the month of May, which was also in line with prelim figures. In April, consumer prices had risen by 0.6%.

According to Eurostat,

  • The lowest annual rates were registered in Greece (-1.2%), Malta (-0.2%), and Portugal (0.5%).
  • Luxembourg (+4.0%) registered the highest annual rate of inflation.
  • In May, the highest contribution to the annual euro area inflation rate came from energy (+1.19 pp).
  • There were also strong contributions from services (+0.45 pp), non-energy industrial goods (+0.19 pp), and food, alcohol, & tobacco (+0.15 pp).

Market Impact

Ahead of the trade data, the EUR had risen to a pre-stat and current day high $1.20063 before falling to a pre-stat and current day low $1.19361.

In response to the inflation and trade data, the EUR slipped to a post-stat low $1.19470 before rising to a post-stat high $1.19533.

At the time of writing, the EUR was down by 0.35% to $1.19529.

EURUSD 170621 Hourly Chart

Next Up

U.S weekly jobless claims and Philly FED Manufacturing numbers for June.

Bitcoin Finds Support At 20 EMA But Stays Below Key Resistance At $40,000

Bitcoin Tries To Get Back To The Resistance at $40,000

Bitcoin managed to find support at the 20 EMA at $38,300 after yesterday’s pullback but continued to trade below the key resistance level at $40,000.

Yesterday, cryptocurrencies found themselves under pressure after Fed indicated that it may raise rates sooner than expected. Fed members project that rates may rise in 2023. Fed’s hawkish message provided support to the U.S. dollar and put pressure on riskier assets like stocks and cryptocurrencies.

Ethereum declined below the $2,500 level but is currently trying to rebound. Dogecoin moved towards $0.31, and its technical picture is looking rather weak at this point. However, it should be noted that Fed’s new message did not cause a major sell-off in the crypto market, which is a welcome development for crypto bulls.

Technical Analysis

bitcoin june 17 2021

Bitcoin failed to settle below the support at the 20 EMA at $38,300 and trades in the range between the 20 EMA and the resistance at $40,000. RSI remains in the moderate territory, and there is plenty of room to gain upside momentum.

However, recent attempts to settle above the key resistance at $40,000 yielded no results although Bitcoin managed to trade above this important level for some time.

Bitcoin needs to settle above $40,000 to have a chance to develop additional upside momentum. If Bitcoin manages to settle above this level, it will head towards the next resistance at the 50 EMA near $42,000.

A move above the 50 EMA will signal that Bitcoin is ready to continue its upside move. The next resistance is located at $44,000. A move above $44,000 will push Bitcoin towards the resistance at $46,000.

On the support side, a move below the 20 EMA will open the way to the test of the next support level which is located at $37,000. In case Bitcoin declines below the support at $37,000, it will gain additional downside momentum and head towards the next support level at $35,000.

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

EUR/USD Daily Forecast – Support At 1.1925 In Sight

Euro Remains Under Strong Pressure Against U.S. Dollar

EUR/USD is currently trying to settle below 1.1950 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance at 91.50 and gained additional upside momentum. Currently, the U.S. Dollar Index is moving towards the next resistance level which is located at 91.80. In case the U.S. Dollar Index gets to the test of this level, EUR/USD will get more support.

Yesterday’s Fed message was more hawkish then expected which provided significant support to the American currency. Fed members expect that rates will go up in 2023, which is a material change in expectations compared to previous meetings.

Today, foreign exchange market traders will have a chance to take a look at inflation data from EU. Analysts expect that Euro Area Inflation Rate increased by 0.3% month-over-month in May. On a year-over-year basis, Inflation Rate is projected to grow by 2%. Core Inflation Rate is projected to grow by 0.9% year-over-year.

Later, traders’ focus will shift to the job market data from the U.S. Initial Jobless Claims report is expected to show that 359,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are projected to decline from 3.5 million to 3.43 million.

Technical Analysis

eur usd june 17 2021

EUR/USD managed to get below the support at 1.1965 and is moving towards the next support level at 1.1925. RSI has just entered into the oversold territory, but there is some room to gain additional downside momentum in case the right catalysts emerge.

In case EUR/USD manages to settle below the support at 1.1925, it will head towards the next support level at 1.1900. A successful test of this level will open the way to the test of the support at 1.1880.

On the upside, EUR/USD needs to get back above 1.1965 to have a chance to gain upside momentum in the near term. The next resistance level is located at 1.1990. If EUR/USD gets above this level, it will move towards the resistance at 1.2020. A successful test of this level will push EUR/USD towards the resistance at 1.2040.

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

GBP/USD Daily Forecast – Test Of Support At 1.3980

U.S. Dollar Tries To Gain More Ground Against British Pound

GBP/USD is currently trying to settle below 1.3980 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index continues to move higher after yesterday’s hawkish message from the Fed. Currently, the U.S. Dollar Index is trying to settle above the resistance at 91.50. In case this attempt is successful, the U.S. Dollar Index will move towards the next resistance level at 91.80 which will be bearish for GBP/USD.

Yesterday, the U.S. dollar gained strong upside momentum after the Fed changed its inflation forecast for 2021 and stated that inflation may be higher than previously expected.

The forecast for future rates was changed as well. The Fed expects that Federal Funds Rate will grow to 0.6% in 2023. Forecasts for 2021 and 2022 remained unchanged. In addition, the Fed made no changes to the quantitative easing program.

At first glance, it may seem that markets are reacting to the potential rate hike in 2023. However, it looks that inflation fears are the real driver of the latest move. The yields of 10-year Treasuries have quickly jumped from 1.49% to 1.58%, indicating that bond traders have started to price in higher inflation. If yields move higher, the U.S. dollar will get more support in the upcoming trading sessions.

Technical Analysis

gbp usd june 17 2021

GBP/USD managed to get below the support at 1.4000 and is trying to settle below the next support level at 1.3980. In case this attempt is successful, GBP/USD will head towards the support at 1.3950.

A move below 1.3950 will push GBP/USD towards the support at 1.3920. If GBP/USD gets below this level, it will move towards the next support level at 1.3900.

On the upside, GBP/USD needs to settle back above 1.4000 to have a chance to develop upside momentum in the near term. The next resistance level is located at 1.4020. If GBP/USD manages to settle above this level, it will head towards the resistance at 1.4050.

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

Fed Dot Plot Changes. US Equities Lower Post-FOMC Statement

So, we now know that the Fed expects to hike interest rates in 2023.

That could be ok. However, there was some contradictory language yesterday surrounding inflation. Is it transitory in the eyes of the Fed, or is it something more? Yesterday’s press conference seemed to play both sides of this coin, and stocks sold off on the uncertainty.

That’s ok too.

In reality, the selloff wasn’t too bad, with the $SPX losing 0.54%; and the $VIX rising by 6.64% on Wednesday. The benchmark 10-year yield $TNX tacked on 4.67% and finished yesterday’s session at a 1.568% yield. There was a pocket of strength in financial names and a few select market sectors. However, it makes me wonder, will asset managers be taking a different view on equities going forward? 2023 is a long time from now, but the idea of the punch bowl being taken away combined with an uncertain inflationary environment could paint a different picture going forward. We just don’t know yet.

Fortunately, some of the ETFs that we have been following fared well on Wednesday. Strength surfaced in solar and green names, which shows that we are on the right path, as capital had to make its way into something other than cash, financials, and volatility yesterday.

Figure 1 – SPDR S&P 500 ETF February 17, 2021 – June 16, 2021, Daily Source stockcharts.com

So, even though it seemed like the sky was falling if you were watching business news coverage after the Fed statement, it was just a pedestrian down day on decent down volume. For SPY traders that have been waiting for a pullback, there could be an opportunity in the cards soon; if we get some follow-through selling. However, I personally favor the IWM at this time, as discussed thoroughly in the May 27th publication.

Turning bearish of an event like today usually turns out to be the wrong move, in my experience. So what, rates will go up in 2023. They have to go up at some point; there is plenty of warning and plenty of time between now and then. Buying the pullback would still be the prudent move based on probabilities (it is still a bull market).

Speaking of the IWM , it fared better than the SPY in Tuesday’s session, giving up only 0.21%. It could be due to the reconstitution theme that we have been discussing.

Figure 2 – iShares Russell 2000 ETF December 29, 2020 – June 16, 2021, Daily Candles Source stockcharts.com

That is a pretty healthy daily candle for the type of session that the major indices experienced on Wednesday.

So, keeping the above in mind, is it really prudent to suddenly get bearish on the indices based on the Fed guidance towards rate hikes in 2023? Probably not. At least not today, anyway. Bull markets like this don’t just go out with a whimper on most occasions. Let’s see how things transpire across the major indices once the new Fed guidance is digested by market participants.

Now, for more bearish folks, I’d like to turn our attention to the IWM/SPY ratio that we discussed in our May 27th publication surrounding the Russell 2000 reconstitution trade.

Figure 3 – IWM iShares Russell 2000 ETF / SPY S&P 500 ETF Ratio August 27, 2020 – May 26, 2021. Source tradingview.com

While the spread hasn’t moved too much to the upside since May 26th, it has tacked on a penny, moving from 0.53 to 0.54. Percentage-wise, there is nothing wrong with that, and this is a theme that could continue to work through June 28th. This trade is long the IWM and short the SPY .

While it may be too early to tell how the broader markets will react to the Fed’s change in stance, it is also not necessarily a time to make rash decisions. Looking for pullbacks when more emotional traders decide to short the market could be a good idea. For now, we will see how Asia and Europe digest the message of the Fed in the overnight session followed by another US trading session. Time will give us more clues regarding the market’s interpretation of the Fed.

Now, for our premium subscribers, let’s look at what was working, even in yesterday’s down session ( a few of the ETFs we have been analyzing were green on the day ). There are also more buy idea levels that could be triggered soon. Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.

Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter – it’s absolutely free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!

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

Rafael Zorabedian
Stock Trading Strategist

Sunshine Profits: Effective Investment through Diligence & Care

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This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’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. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits’ employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.

 

Silver Price Prediction – Prices Slide as the Dollar Pops Following Fed Meeting

Silver prices moved lower but rebounded from session lows as the dollar rallied and yields rose. Prices are looking toppy but have yet to rollover like gold. Silver prices have been rangebound and have not been able to gain any traction. The decline in copper prices has also weighed on silver prices as both are used in the industrial process. The U.S. 10-year increased 5-basis points while the 2-year yield rose 6-basis points, as the Fed changed its dot plots to show that 7 Fed officials believe rates will increase in 2022 compared to just four officials at the last Federal Reserve meeting. The Fed raised its view of growth and inflation.

Technical analysis

Silver prices slid on Wednesday but rebounded from session lows and remain rangebound. Support is seen near the 50-day moving average at 27.08.  Short-term resistance is seen near the 10-day moving average at 27.73. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. The RSI (relative strength index ) also broke down to new lows which reflects accelerating negative momentum. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

The Fed Increases Future Inflation Forecast

The Federal Reserve increased its inflation forecast but left interest rates unchanged as widely expected. However, the central bank did not indicate as to when it will begin cutting back on its aggressive bond-buying program. Officials raised their GDP expectations for this year to 7% from 6.5% previously. The unemployment estimate remained unchanged at 4.5%. The Fed raised its inflation expectation to 3.4%, a full percentage point higher than the March projection.