Crude Oil Price Forecast – Crude Oil Markets Continue to Plow Higher

WTI Crude Oil

The West Texas Intermediate Crude Oil market has rallied just a bit during the trading session to gain over 1% as market participants have reached towards the highs again. The global economy appears to be reopening, and that of course is going to drive prices higher as it has become somewhat of a “one-way trade.” Ultimately, I like the idea of buying pullbacks and it should continue to respect the $70 level, which of course is a large, round, psychologically significant figure. If we break down below there, the $67.50 level would be supportive as well, as it was the top of the ascending triangle. I believe at this point in time, the market is likely to go looking towards the $77.50 level.

Crude Oil Video 22.06.21

Brent

Brent markets have rallied during the trading session on Monday, to reach towards the $75 level. If we can break above the $75 level, then the market is likely to go looking towards the $80 level. This is the “measured move” of the ascending triangle, and of course we have the 50 day EMA reaching towards the top of the ascending triangle, adding more credence to the idea of the $70 level to be supportive.

It is not until we break down below the bottom of the ascending triangle in either one of these grades that I would be a seller. I do not see that happening anytime soon, and of course with the world waking back up, it makes quite a bit of sense that demand will continue to push this market higher. At this point, I have no interest in shorting anytime soon.

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

Natural Gas Price Forecast – Natural Gas Fall to Kickoff Week

Natural gas markets have fallen a bit during the course of the trading session on Monday as we continue to see gravity come back into the picture. The commodity market boom continues in general, but that is only a bit of a sideline to the real fundamentals of this market, as it may have gotten a bit of a boost due to the fact that people are simply looking to buy anything commodity related. However, the natural gas markets will continue to be a bit noisy in general, but we also have a significant amount of support underneath.

NATGAS Video 22.06.21

Natural gas as a major oversupply in general, but all things being equal, the market is likely to continue to respect the $3.40 level, as it has been major resistance previously, and it is worth noting that we had a rather negative candlestick form when we did get close to it. All things been equal, I think that the market probably continues to see a lot of sellers in that area, perhaps showing a bit of hesitation.

Ultimately, this is a market that I believe has a possible break down just waiting to happen, with the $3.00 level being an obvious support level, right along with the 50 day EMA. Underneath that level would open up the possibility of a move down to the $2.80 level, which is the top of the gap that had been broken to the upside. The 200 day EMA is sitting in that area, so it does make quite a bit of sense that it would offer a bit of a “floor.”

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

Gold Price Forecast – Gold Markets Recover Slightly on Monday

Gold markets have rallied during the trading session on Monday as we continue to see a lot of noise in this market. The 200 day EMA above at the $1811 level and should offer a bit of resistance if we get there. If we can break above it, then it would be very bullish sign for gold, sending it much higher to fill the gap above which started out the $1861 level and drops down to roughly $1810 underneath. The 50 day EMA sits in that general vicinity but is turning lower. At any rally at this point time could show signs of exhaustion that we could get involved with.

Gold Price Predictions Video 22.06.21

If we break down below the bottom, then the $1750 level would be the next target, as it could be supportive based upon previous action, but more likely than not we will see an attempt to break down even further if we do fall from here. The market is likely to see a lot of selling pressure in general if we do get the breakdown, but at this point in time I think the one thing you can probably count on more than anything else is going to be a lot of choppy and noisy behavior as we continue to see confusion about the Federal Reserve and of course what they are going to do next.

All things been equal, we will probably have multiple opportunities to trade back and forth on short-term charts, if you are so inclined to trade shorter-term charts. We will make a longer-term decision sooner rather than later, and once we do the trade will become much more obvious.

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

Gold Price Prediction – Prices Rebound as the Dollar Eases

Gold prices rebounded sharply on Monday, as the dollar eased and yields moved sideways. Despite the rebound, prices formed an inside day which is a sign of indecision. With the 2-year yield continuing to remain buoyed following the decision by the Federal Reserve which saw the dot plots change slightly, it will be hard for gold to gain traction.

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Technical analysis

Gold prices were nearly rallied sharply on Monday reversing some of last week’s decline. Prices remain well above support near the November 2020 lows of 1,764, Resistance is seen near the 50-day moving average at 1,832.  Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold. The current reading on the fast stochastic is 15, below the oversold trigger level of 20 which could foreshadow a correction. The RSI is also oversold printing a reading of 34 up from 28, which was below the oversold trigger level of 30 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.

The Fed’s View is Mixed

Minneapolis Federal Reserve President Neel Kashkari said he wants to keep the U.S. central bank’s benchmark short-term interest rate near zero at least through the end of 2023. Kashkari’s remarks show he’s in a decided minority in an increasingly hawkish Fed.

USD/CAD Daily Forecast – Test Of Support At 1.2385

U.S. Dollar Is Losing Ground Against Canadian Dollar

USD/CAD is currently trying to settle below the support at 1.2385 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get below the support at the 92 level and is trying to develop additional downside momentum. In case this attempt is successful, it will get to the test of the next support at 91.80 which will be bearish for USD/CAD.

There are no important economic reports scheduled to be released in the U.S. and Canada today so foreign exchange market traders will focus on general market sentiment and commodity markets.

Commodity-related currencies are moving higher today as WTI oil managed to get to new highs while copper began to rebound after the recent sell-off. If commodities continue to move higher, Canadian dollar will get more support.

Traders will also continue to monitor the developments in U.S. government bond markets. It’s been a volatile day for bond traders, and the yield of 10-year Treasuries moved towards 1.49% after an unsuccessful attempt to settle below 1.36%. Higher yields are often bullish for the U.S. dollar, but it looks that American currency is under pressure today because traders take profits after the recent strong rally.

Technical Analysis

usd cad june 21 2021

USD to CAD managed to settle below the support at 1.2420 and is testing the next support level at 1.2385. In case this test is successful, USD to CAD will move towards the next support level at 1.2350.

If USD to CAD declines below the support at 1.2350, it will head towards the support at 1.2325. If USD to CAD manages to settle below this level, it will move towards the support level at 1.2300.

On the upside, USD to CAD needs to settle back above 1.2385 to have a chance to develop upside momentum in the near term. If USD to CAD settles above 1.2385, it will head towards the resistance at 1.2420. A successful test of this level will open the way to the test of the next resistance at 1.2450.

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

Why MicroStrategy Stock Is Down By 8% Today

MicroStrategy Stock Falls As Bitcoin Drops Towards $32,000

Shares of MicroStrategy found themselves under strong pressure amid strong sell-off in crypto markets. Bitcoin managed to settle below the support at $35,000 and made an attempt to settle below the next support level at $32,000 after China banned crypto mining in Sichuan province.

Today, the company announced that it purchased approximately 13,005 Bitcoins for $489 million at an average price of $37,617 per Bitcoin. MicroStrategy noted that it holds approximately 105,085 Bitcoins.

MicroStrategy is a business intelligence company, but it has emerged as one of bets on the growth of the crypto market after it started to buy Bitcoin. In this light, the dynamics of Bitcoin are a bigger catalyst for MicroStrategy compared to its main business.

What’s Next For MicroStrategy Stock?

MicroStrategy has recently completed an $500 million offering of 6.125% senior secured notes due 2028 and immediately used the proceeds to buy Bitcoin. Back in February, MicroStrategy completed a $1.05 billion offering of convertible senior notes due 2027 which was also used to buy Bitcoins.

At this point, MicroStrategy’s average purchase price is approximately $26,080 per Bitcoin, inclusive of fees and expenses, so the company has “paper profits” despite the major pullback in Bitcoin.

However, it should be noted that Bitcoin is trading not far from MicroStrategy’s average purchase price, and a move towards $26,000 may put significant pressure on MicroStrategy’s stock which remains very dependent on market sentiment.

At the current Bitcoin price of about $33,000, MicroStrategy’s Bitcoin are valued at approximately $3.47 billion, which is more than half of the company’s market capitalization.

Recent crackdown on miners in China has already led to increased volatility in crypto markets, and this volatility will likely remain intact in the upcoming trading sessions. MicroStrategy stock will be very sensitive to Bitcoin’s trading dynamics so traders should be prepared for fast moves.

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

Have Gold Stocks Lost All Their Vigor?

The Gold Miners

While investors believed that superficial strength indicated clear skies ahead, I warned on Jun. 14 that storm clouds were likely to rain on gold, silver and mining stocks’ parade.

I wrote:

Not only has gold’s RSI fallen precipitously, but the yellow metal’s stochastic oscillator is also at levels that preceded significant historical drawdowns. As a result, while a $100+ decline is likely to materialize in the short term , an even larger decline will likely occur over the medium term. And with the 2008 and 2012-2013 analogues becoming even more valid by the day, gold’s ominous path forward will likely catch many market participants by surprise.

And with the technical realities finally drowning the yellow metal, it was a tough pill to swallow for those that didn’t heed the warning.

Please see below:

As part of the problem, the vast majority of individual investors and – sadly – quite many analysts focus on the trees while forgetting about the forest. However, once one zooms out and looks at the situation from a broad perspective, it’s clear that: “What has been will be again, what has been done will be done again; there is nothing new under the sun.” (-Ecclesiastes 1:9)

Therefore, while investors often focus all of their attention on the yellow metal, I warned on Jun. 14 that the HUI Index’s ominous behavior signaled significant downside for gold, silver and mining stocks.

I wrote:

With the HUI Index acting as the PMs’ canary in the coal mine, the bearish implications are as clear as day when eyeing the long-term chart. In the past three weeks, two key events unfolded:

  1. The stochastic oscillator delivered a clear sell signal.
  2. The self-similarity patterns became increasingly valid.

And with last week’s price action adding further confirmation, investors’ optimism is showing severe cracks in its foundation.

On top of that, even though the HUI Index plunged by more than 10% last week , the carnage may not be over. Case in point: the HUI Index is in the midst of forming the right shoulder of its bearish head & shoulders pattern, and if completed, could result in a profound decline over the medium term. For context, with gold approaching its late-April bottom and its rising medium-term support line, the yellow metal could bounce at roughly $1,750. In the process, the gold miners may follow suit. However, the bearish implications remain intact over the medium term, and a significant slide is likely to follow.

Please see below:

To explain, if you held firm in 2008 and 2013 and maintained your short positions, you almost certainly realized substantial profits. And while there are instances when it’s wise to exit one’s short positions and re-enter at more attractive prices, the smooth declines of gold, silver, and mining stocks mean that the risk-reward of doing so is tilted toward the downside.

Or to put it more bluntly, the prospect of missing out on the forthcoming slide makes exiting the short positions a risky investment decision. For context, we believe that holding the short position is the most prudent course of action. However, if gold, silver and mining stocks become extremely oversold, we may consider covering on a short-term basis.

If that wasn’t enough, I warned previously that the recent plunge was weeks in the making:

I wrote the following about the week start started on May 24 :

What happened three weeks ago was that gold rallied by almost $30 ($28.60) and at the same time, the HUI – a flagship proxy for gold stocks… Declined by 1.37. In other words, gold stocks completely ignored gold’s gains. That shows exceptional weakness on the weekly basis and is a very bearish sign for the following weeks.

To that point, the HUI Index is still following two medium-term historical analogies. To explain, back in 2008, right before a huge slide, in late September and early October gold was still moving to new intraday highs, but the HUI Index was ignoring that, and then it declined despite gold’s rally. However, it was also the case that the general stock market declined then. If stocks hadn’t declined back then so profoundly, gold stocks’ underperformance relative to gold would likely be present but more moderate.

Moreover, in 2012, the HUI Index topped on Sep. 21, and that was just the initial high in gold. At that time the S&P 500 was moving back and forth with lower highs – so a bit more bearish than the current back-and-forth movement in this stock index. And what was the eventual climax? Well, gold moved to new highs and formed the final top (Oct. 5). It was when the S&P 500 almost (!) moved to new highs, and despite both, the HUI Index didn’t move to new highs. Thus, the similarity to how the final counter-trend rally ended in 2012 (and to a smaller extent in 2008) ended is uncanny .

On top of that, the stochastic oscillator (which flashed a clear sell signal ) is singing a similar tune. Not only do these signals often precede massive price declines on their own, but the analogies of 2008 and 2012 serve as confirmation that the huge decline has only just begun and that forecasting lower gold prices is currently justified.

Thus, if history rhymes, as it tends to, the HUI Index will likely decline profoundly and find medium-term support in the 100-to-150 range. For context, high-end 2020 support implies a move back to 150, while low-end 2015 support implies a move back to 100. And yes, it could really happen, even though it seems unthinkable.

The HUI Index retraced a bit more than 61.8% of its downswing in 2008 and in between 50% and 61.8% of its downswing in 2012 before eventually rolling over. Now, in both (2008 and 2012) cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02.

That’s why I previously wrote that “it wouldn’t be surprising to see a move to about 300 in the HUI Index”. And that’s exactly what we saw (a move above 320 is still close to 300 from the long-term point of view). To clarify, one head-and-shoulders pattern – with a rising neckline – was already completed, and one head-and-shoulders pattern – with a horizontal neckline – is being completed, but we’ll have the confirmation once miners break to new yearly lows.

Furthermore , three of the biggest declines in the mining stocks (I’m using the HUI Index as a proxy here), all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the declines exceeded the size of the head of the pattern.

As a result, we’re confronted with two bearish scenarios:

  1. If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early 2020 high.
  2. If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.

Keep in mind though: scenario #2 most likely requires equities to participate. In 2008 and 2020, the sharp drawdowns in the HUI Index coincided with significant drawdowns of the S&P 500 . However, with the Fed turning hawkish and investors extremely allergic to higher interest rates, the likelihood of a three-peat remains relatively high.

Let’s zoom in.

To explain, the senior miners’ weekly decline occurred relatively uninterrupted, with little buying pressure witnessed on Jun. 18. Moreover, not only did the GDX ETF close below its April lows and its March highs, but it also dipped below the 61.8% Fibonacci retracement level. Thus, while the senior miners’ RSI (Relative Strength Index) signals a buying opportunity (by falling below 30), the technical damage (breakdown below the 61.8% Fibonacci retracement) justifies the bearish outlook even in the short run. Of course, I remain on the lookout for this breakdown’s invalidation as it would be a sign of potential strength.

Finally, let’s consider the size of the possible corrective upswing based on the analogy to 2012. Back then, the GDX ETF’s corrective upswing didn’t recapture 61.8% or even 38.2% of its previous decline, and the bullish correction was rather “muted” relative to gold. Thus, the notable detail here is that the GDX ETF started its November 2012 correction with the RSI close to 30, but also when it moved slightly below its previous (August) lows, and the final short-term bottom took place after the second (!) day when it declined on big volume.

So, if history is going to continue to rhyme (which seems likely), even if gold corrects quite visibly, gold stocks’ corrective upswing might not be that significant. If we see “screaming short-term buy signals” or something like that, we might close or even briefly switch to the long side, but for now, the trend remains down.

In conclusion, gold, silver and mining stocks’ plight was a humbling experience for many investors. And while the recent slide highlights the importance of investing without emotion, we remain confident that the precious metals will soar once again. However, because secular bull markets don’t occur in a straight line, based on the similarity to how similar situations developed in the past, a final profound decline will likely occur before the metals resume their resurgence. As a result, even though gold, silver, and mining stocks are poised to shine in the long run, I still think that short positions in the precious metals sector – especially in the junior miners – currently remain attractive from a risk-reward perspective.

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.

 

Silver Price Daily Forecast – Support At $25.80 Stays Strong

Silver Rebounds After Recent Sell-Off

Silver has recently made an attempt to settle below the support at $25.80 but lost momentum and rebounded towards $26.00 while the U.S. dollar lost ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle below the support at 92. In case this attempt is successful, the U.S. Dollar Index will head towards the next support level at 91.80 which will be bullish for silver and gold price today.

Weaker dollar also provided support to gold which is trying to settle above $1775. If gold manages to settle above this level, it will move towards the resistance at $1800 which will be bullish for silver.

Gold/silver ratio has recently made another attempt to settle above the resistance at 68.70 but failed to develop sufficient upside momentum and pulled back. In case gold/silver ratio settles above 68.70, it will have a good chance to get into 69 – 70 range which will be bearish for silver.

Technical Analysis

silver june 21 2021

Silver did not manage to settle below the support at $25.80 and made an attempt to settle above $26.00. If silver gets above $26.00, it will have a good chance to get to the test of the nearest resistance level at $26.30.

A move above the resistance at $26.30 will open the way to the test of the next resistance level which is located at $26.65. If silver manages to settle above the resistance at $26.65, it will head towards the next resistance level at the 50 EMA at $27.00.

On the support side, silver needs to settle below the support at $25.80 to develop additional downside momentum in the near term. RSI remains in the moderate territory, and there is enough room to gain additional momentum in case the right catalysts emerge.

If silver settles below the support at $25.80, it will move towards the next support level at $25.50. A move below this level will push silver towards the support at $25.30. If silver declines below the support at $25.30, it will head towards the next support at $25.00.

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

USD/JPY Price Forecast – US Dollar Pulls Back Slightly

The US dollar fell a bit during the course of the trading session on Monday, breaking down towards the ¥109.50 level, only to turn around and show signs of life. As we have bounced significantly, the market looks as if it is trying to form a bit of a hammer. That is a very bullish sign, but we also have recently struggled at the ¥111 level, which of course is an area that I have mentioned more than once as significant resistance. Furthermore, the MACD shows divergence, which is also another reason to suspect that we might be running into a little bit of trouble.

USD/JPY Video 22.06.21

Underneath, the 50 day EMA sits near the ¥109.25 level, and that could offer a little bit of dynamic support. That being said, if we break down below it, we could go looking towards the ¥109 level, perhaps even below there to go looking towards the 200 day EMA. The 200 day EMA would of course be very crucial to pay attention to but what I think at this point we are looking at is a market that is trying to determine whether or not a longer-term “double top” has been put in the case.

All things being equal, I think that we will see a lot of noisy behavior, and at this point in time I believe that the ¥111 level is a major resistance barrier that will be very difficult to overcome, so at this point in time I think we continue to chop around and perhaps see more pressure building up for a potential pullback based upon the historical value of the area as a ceiling.

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

GBP/USD Price Forecast – British Pound Recovers From Support Level

The British pound has rallied a bit during the course of the trading session on Monday to bounce from the 1.38 level. That is an area that has been fairly important for some time now, and therefore it makes sense that we bounced just a bit after falling straight down towards it. The question now is whether or not we can find some type of upward momentum? At this point, it is worth noting that although we are still technically in an uptrend, we had seen a lot of damage over the last couple of days.

GBP/USD Video 22.06.21

The 200 day EMA is currently reaching towards the 1.3650 level, an area that I think will offer a bit of support, but it will be interesting to see whether or not it reaches towards the 1.3750 level. That is an area that previously had been important, so it is worth paying attention to. I think we probably get a short-term bounce, but a lot of noise above the keep things somewhat quiet in the short term.

This is the type of market that could be very noisy over the next several sessions, so I anticipate more neutral trading than anything else. I do think that we are probably going to make an impulsive move in one direction, or the other hand be able to follow it. In general, this is a market that I think is probably best being cautious with, if for no other reason than the fact that the British pound does not seem as if it knows what it wants to do over the next several weeks.

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

GBP/JPY Price Forecast – British Pound Has Volatile Session

The British pound has gone back and forth during the course of the trading session on Monday as we have been all over the place when it comes to risk appetite. After all, this is a pair that is very sensitive to risk appetite, and this is why we have seen so much in the way of noise. Looking at this chart, I believe that it is worth noting that the candlestick for the trading session on Monday shows a lot of confusion, and I think that is a good sign of what is ready to hit the market.

GBP/JPY Video 22.06.22

If we break above the top of the candlestick for the trading session on Monday, that would be very bullish, and I think we would go looking towards the ¥155 level. However, if we were to break down below the bottom of the candlestick it is very possible that we go looking towards the ¥150 level underneath. All things being equal, I think we are going to continue to see a lot of noisy behavior, but if we get more of a “risk off” type of attitude out there, then that will more than likely bring this pair lower.

If we break down below the ¥150 level, that could be a very negative sign, perhaps sending this market down towards the ¥147.50 level, and then after that down to the ¥145 level. In general, this is a market that I think you will need to be very cautious about your position size, but it is worth noting that we have been very bullish for a long time, so I am a bit hesitant to put a lot of money to work.

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

EUR/USD Price Forecast – Euro Bounces to Kickoff Week

The Euro has bounced a bit during the course of the trading session on Monday, as we are looking at the 200 day EMA just above. Because of this, it is likely to be a scenario where we could see further bearish pressure. That being said, a lot will come down to the next thing that the Federal Reserve says, as the risk appetite out there is going to be skewed back and forth by the perceived ability of the Federal Reserve to start tightening.

EUR/USD Video 22.06.21

There are a lot of economic announcements during the course of the week, and several central bankers speaking, so there is the possibility that we get a bit of noise. From a technical analysis standpoint, the 200 day EMA above could offer a bit of resistance, so keep that in mind. If we break above it, then I think the market will challenge the 1.20 level which of course is a large, round, psychologically significant figure that a lot of people will be paying attention to. If we can clear that area, then we will continue the overall uptrend, sending the Euro back towards the highs.

I think the next couple of days are going to end up being very difficult as they will almost certainly be very choppy, due to the fact that there has been a lot of fear put into the market overall. Pay attention to the US bond market, because if we continue to see demand for treasuries, that will naturally drive up the price of the US dollar and other currencies such as the Euro. At this point, I believe that we may form a bit of a consolidation area between the 200 day EMA and the 1.1830 level.

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

AUD/USD Price Forecast – Australian Dollar on The Precipice

The Australian dollar has rallied a bit during the trading session on Monday to show signs of recovery, as the 0.75 has caused a lot of noise. That being said, it will be interesting to see how this plays out because if we do break down a little bit, then the market is likely to go much lower, perhaps as low as the 0.71 handle. After the last couple of days, it is very likely that we will see continued downward pressure given enough time. The question at this point is whether or not we are going to bounce and break down, or are we going to turn everything right back around? I suspect it is going to take quite a bit of effort to turn this thing around.

AUD/USD Video 22.06.21

If we break down below the bottom of the Monday candlestick, that probably opens up a little bit of a “trapdoor” kind of situation, where we could break down rather drastically. Ultimately, the US dollar strengthening does make quite a bit of sense considering that the Federal Reserve has suggested that they are much closer to tightening than originally thought. Furthermore, we are below the 200 day EMA, which for some traders will be reason enough to get short based upon a longer-term movement.

I suspect that the next couple of days will determine what happens longer term. Ultimately, the market has clearly had a shock, so one would think that it would only take a little bit of a push to make things fall apart again, because quite frankly there is a lot of fear out there suddenly.

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

Amazon.com Nears Major Breakout

Amazon.com Inc. (AMZN) has been treading water since topping out above 3,500 in September 2020 but is nearing completion of a major breakout pattern, just in time for this year’s Prime Day. While the two events aren’t really connected, the convergence signals better times for shareholders of the e-commerce juggernaut because the pattern projects a strong uptrend that could eventually top 5,000.

New Revenue Sources

The stock posted a phenomenal 76% return in 2020, underpinned by pandemic lockdowns that forced smaller competitors to close their doors or rush to upgrade online sales portals. The rally ran out of steam in September, giving way to a broad rectangular pattern that’s now carved the outline of an inverse head and shoulder breakout pattern. Taken together with price action since 2018, the current uptick could signal the start of the final leg of an Elliot 5-wave advance.

Amazon initiatives unrelated to online sales could generate substantial income in coming years. For starters, it just signed contracts with multiple companies to provide telehealth services through Amazon Care, which will dovetail nicely with the new Amazon Pharmacy online prescription fulfillment service. It’s also working with the U.S. Postal Service to deliver cargo and could soon compete directly with FedEx Corp. (FDX) and United Parcel Service Inc. (UPS).

Wall Street and Technical Outlook

Wall Street consensus hasn’t budged in the last three months, with a ‘Buy’ rating based upon 42 ‘Buy’, 6 ‘Overweight’, and 1 ‘Hold” recommendation. No analysts are recommending that shareholders close positions, despite last year’s outsized share gains. Price targets currently range from a low of $3,775 to a Street-high $5,500 while the stock is set to open Monday’s session more than $275 below the low target. This is a perfect placement for a rapid escalation to the upside.

Amazon broke out above the 2018 high near 2,000 in April 2020 and took off in a strong uptrend that posted an all-time high at 3,552.25 in September. The stock then entered a lateral consolidation, holding two tests at support near 2,850. It returned to resistance in April and pulled back, carving the last leg of an inverse head and shoulders pattern, and is now trading just 60 points below resistance. Taken together with emerging buy cycles, this price action greatly raises odds for a breakout.

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. 

EUR/USD Mid-Session Technical Analysis for June 21, 2021

The Euro is edging higher against the U.S. Dollar on Monday as traders calmed down enough following last week’s steep selloff to take profits and square up short positions. Helping to ease some of the pain from last week’s sell-off was a dip in Treasury yields and a recovery in demand for higher-risk assets.

At 11:55 GMT, the EUR/USD is trading 1.1898, up 0.0038 or +0.32%.

Early Monday, 30-year Treasury bond yields fell below 2% for the first time since February and those on 10-year securities slid under 1.40% as a sell-off in equities fueled demand for safe-haven assets. Thirty-year yields declined as much as nine basis points to 1.93%, and 10-year yields dropped the same amount to a four-month low of 1.35%.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 1.1848 will signal a resumption of the downtrend.

A trade through 1.2218 will change the main trend to up. This is highly unlikely but due to the prolonged move down in terms of price and time, the EUR/USD is ripe for a closing price reversal bottom.

The short-term range is 1.1704 to 1.2266. The single-currency is currently trading on the weak side of its retracement zone at 1.1919 to 1.1985, making it resistance.

The longer-term 50% resistance level is 1.2027.

The minor range is 1.2266 to 1.1848. Its 50% to 61.8% retracement zone comes in at 1.2057 to 1.2106.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Monday will be determined by trader reaction to the Fibonacci level at 1.1919.

Bearish Scenario

A sustained move under 1.1919 will indicate the presence of sellers. The first downside target is last week’s low at 1.1848. This is a potential trigger point for an acceleration to the downside with the March 31 bottom at 1.1704 the next major downside target.

Bullish Scenario

A sustained move over 1.1919 will signal the presence of buyers. Overtaking this level could trigger an acceleration to the upside with the 50% level at 1.1985 the next likely upside target.

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

The U.S Crypto Morning Session – June 21st, 2021

It’s been a particularly bearish start to the day for Bitcoin and the broader crypto market.

Following an 8.64% fall last week, Bitcoin was in the deep red this morning alongside the broader market.

At the time of writing, Bitcoin, BTC to USD, was down by 9.45% to $32,264.6. A mixed start to the day saw Bitcoin rise to an early morning high $35,832.0 before hitting reverse.

Falling well short of the first major resistance level at $36,768, Bitcoin slid to a late morning intraday low $32,158.0.

Bitcoin fell through the first major support level at $33,953 and the second major support level at $32,274.

Steering clear of sub-$32,000 levels, however, Bitcoin briefly moved back through the second major support level to revisit $32,600 levels before falling back.

BTCUSD 210621 Hourly Chart

The Rest of the Pack

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

Bitcoin Cash SV (-16.52%) and Chainlink (-16.75%) led the way down.

Binance Coin (-11.59%), Cardano’s ADA (-10.97%), Ethereum (-14.27%), Litecoin (-15.54%), and Ripple’s XRP (-14.70%) also saw particularly heavy losses early on.

Crypto.com Coin and Polkadot saw relatively modest losses of 9.88% and 9.15% respectively.

Through the early hours, the crypto total market rose to an early morning high $1,482bn before falling to a low $1,302bn. At the time of writing, the total market cap stood at $1,310bn.

Bitcoin’s dominance fell to an early low 45.20% before rising to a high 46.12%. At the time of writing, Bitcoin’s dominance stood at 46.06%.

For the Day Ahead

Bitcoin would need to move back through the major support levels and the $35,090 pivot to support a run at the run at the first major resistance level at $36,768.

Support from the broader market would be needed, however, for Bitcoin to break back through to $36,000 levels.

Barring an extended crypto rally, the first major resistance level and Sunday’s high $36,226.4 likely cap any upside.

In the event of a broad-based crypto rebound, Bitcoin could test resistance at $38,000 levels. The second major resistance level sits at $37,905.

Failure to move back through the major support levels and the $35,090 pivot would bring the sub-$32,000 levels into play.

Barring an extended sell-off through the afternoon, however, Bitcoin should steer clear of the third major support level at $29,459.

Looking beyond the support and resistance levels, the 50 EMA pulled further back from the 100 and the 200 through the morning, supporting the extended sell-off.

We have also seen the 100 EMA pull back from the 200 EMA adding further downward pressure.

A further pullback of the 50 EMA from the 100 EMA would bring sub-$31,000 levels into play before any recovery.

NZD/USD Forex Technical Analysis – Holding Fib Level at .6924 Could Trigger Rally into 50% Level at .7027

The New Zealand Dollar is edging higher on Monday after last week’s steep sell-off was fueled by the Fed’s surprise hawkish stance, which weighed on risk sentiment. Global equity markets are recovering from early session weakness that may be encouraging Kiwi short-sellers to take profits.

At 10:07 GMT, the NZD/USD is trading .6970, up 0.0040 or +0.58%.

Weaker Treasury yields are also helping to underpin the New Zealand Dollar. Additionally, analysts at Goldman Sachs agreed the dollar’s gains may not be sustained, noting other central banks will need to consider policy normalization too as their economies recover from the blow of the pandemic.

Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6823 will signal a resumption of the downtrend.

The main trend will change to up on a move through .7316. This is highly unlikely, but due to the prolonged move down in terms of price and time, the NZD/USD may be ripe for a closing price reversal bottom.

The minor trend is also down. A trade through .7243 will change the minor trend to up. This will also shift momentum to the upside.

The NZD/USD is currently testing the lower level of a long-term retracement zone at .7027 to .6924.

The minor range is .7243 to .6923. Its 50% level at .7083 is the first potential upside target. Since the main trend is down, sellers could come in on the first test of this level.

The main range is .7316 to .6923. Its retracement zone at .7120 to .7166 is the best upside target zone.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the NZD/USD is likely to be determined by trader reaction to .6924.

Bearish Scenario

A sustained move under .6923 will indicate the presence of sellers. This could trigger a break into the November 23, 2020 main bottom at .6897. This is a potential trigger point for an acceleration to the downside with the November 11, 2020 main bottom at .6811 the next potential downside target.

Bullish Scenario

A sustained move over .6924 will signal the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into the main 50% level at .7027. Sellers could come in on the first test of this level. Overcoming it, however, could trigger a surge into the minor pivot at .7083.

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

Crude Oil Price Update – Strengthens Over $70.42, Weakens Under $70.02

U.S. West Texas Intermediate crude oil futures are edging higher on Monday, boosted by an improving demand outlook due to the summer driving season and slow progress in talks between the U.S. and Iran regarding nuclear issues and the possible lifting of sanctions that could bring more oil into the market.

At 09:28 GMT, September WTI crude oil futures are trading $70.78, up $0.33 or +0.47%.

Daily September WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $71.99 will signal a resumption of the uptrend. A trade through $61.06 will change the main trend to down.

The minor trend is also up. A trade through $68.05 will change the minor trend to down. This will also shift momentum to the downside. A move through $67.84 will reaffirm the downtrend.

The first minor range is $71.99 to $68.86. The market is currently trading on the strong side of its 50% level at $70.42, making it potential support.

A second minor range is $68.05 to $71.99. Its 50% level at $70.02 is another potential support level. This is followed closely by another 50% level at $69.92. Still another potential support level comes in at $68.29. This is the last potential support before the pair of minor bottoms.

Daily Swing Chart Technical Forecast

The direction of the September WTI crude oil futures contract on Monday is likely to be determined by trader reaction to the pivot at $70.42.

Bullish Scenario

A sustained move over $70.42 will indicate the presence of buyers. If this move generates enough upside momentum then look for the move to possibly extend into $71.99 over the short-run.

Bearish Scenario

A sustained move under $70.42 will signal the presence of sellers. The first downside target is the pivot at $70.02. If this fails then look for a potential acceleration to the downside with the next target last week’s low at $68.86, followed closely by another pivot at $68.29 and a pair of main bottoms at $68.05 and $67.84.

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

Gold is Bearish as the Market is Retracing

Intraday shorts might come around the 1795 zone as a part of retracement. A move higher will be a sign for a deeper retracement and 1815 – 1820 will be a zone to look for shorts. A rejection of the POC and POC2 should be targeting 1765 as a part of retest. Gold is bearish now and taking shorts is trend trading.

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

Cheers and safe trading,

Nenad

 

AUD/USD Forex Technical Analysis – Testing .7499-.7379 Retracement Zone; Could Form Reversal Bottom

The Australian Dollar is edging higher on Monday, taking a breather from recent losses on the back of a recovery in demand for riskier assets, lower Treasury yields and a weaker U.S. Dollar. Nonetheless, gains are expected to be capped by hawkish comments from the Federal Reserve last week and ahead of a key Reserve Bank of Australian meeting on July 6.

At 09:01 GMT, the AUD/USD is trading .7496, up 0.0016 or +0.21%.

In economic news, Australian retail sales rose less than expected in May, with a snap coronavirus lockdown in the country’s second most populous state of Victoria hurting demand, preliminary data showed on Monday.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier in the session when sellers took out Friday’s low. A trade through the intraday low at .7477 will signal a resumption of the downtrend.

The main trend will change to up if buyers can take out the last main top at .7776. This is highly unlikely today. Tuesday will be the seventh day down from the last main top which will put the AUD/USD inside the window of time for a potentially bullish closing price reversal bottom. The early price action, however, suggests the reversal bottom may be coming a day early.

The main support is the long-term retracement zone at .7499 to .7379. The AUD/USD is currently testing the upper level of this zone.

The new minor range is .7776 to .7477, which makes its 50% level at .7627 the nearest potential upside target. Since the main trend is down, look for sellers on the first test of this level.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to .7480.

Bearish Scenario

A sustained move under .7480 will indicate the presence of sellers. If this move creates enough downside momentum then look for a retest of the intraday low at .7477, followed by the December 21, 2020 main bottom at .7462. This is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over .7480 will signal the presence of buyers. Overcoming the 50% level at .7499 will indicate the buying is getting stronger. If this move generates enough upside momentum then look for the rally to possibly extend into the minor pivot at .7627.

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