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The three most important central banks in the world will hold their…

The three most important central banks in the world will hold their last monetary policy meeting in 2021, which will exacerbate weak sentiment

20211214
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Market Focus

US stocks fell on Monday due to concerns about the Omicron coronavirus variant before the Federal Reserve meeting later this week. The decline was mainly concentrated in the oil and gas, consumer services and technology sectors. At the end of the market, the Dow Jones Industrial Average lost 0.89% to 35,650.96 points, the S&P 500 index lost 0.91% to 4,668.98 and the Nasdaq Composite Index, dropped 1.39%.

Seven of the 11 major sectors of the S&P 500 fell, with only defensive stocks such as real estate, utilities, consumer staples and healthcare rising. Travel-related stocks fell because the fast-spreading Omicron accounted for about 40% of COVID-19 infections in London, and at least one person died in the UK. On the other hand, the best-performing stock in the Dow Jones Industrial Average was Coca-Cola Company, which rose 2.63%, Walmart rose 1.80% and Johnson & Johnson rose 1.79% in late trading. The worst performing stock was Boeing, which fell 3.74%, the Dow fell 2.49% and the Home Depot fell 2.45%. In addition, the best performing company in the Nasdaq Composite Index was SeaChange International Inc, which rose 128.81%, Arena Pharmaceuticals Inc soared 80.38% after Pfizer agreed to acquire a $6.7 billion all-cash transaction, Pfizer also rose 5.3%, and Foghorn Therapeutics Inc rose 54.96%. The worst performers were Nisun International Enterprise Development Group Co Ltd, which fell 60.29%, X4 Pharmaceuticals Inc fell 44.13%, and IGM Biosciences Incclose fell 41.31%.

Main Pairs Movement

The three most important central banks in the world will hold their last monetary policy meeting in 2021, which will exacerbate weak sentiment. The Federal Reserve will announce its monetary policy decisions on Wednesday, while the Bank of England and the European Central Bank will announce their monetary policy decisions on Thursday. Concerns were raised about how the ongoing Omicron epidemic might affect such decisions and global economic growth continue. At the same time, the UK reported its first death related to the Omicron variant, which stimulated market risk aversion.

In the US Treasury market, the 10-year long-term Treasury bond yields fell, and the 20-year and 30-year Treasury yields fell 7-8 basis points to close at 1.414%, 1.84% and 1.80%, respectively.

EUR/USD hovered below 1.1300, while GBP/USD fell to the 1.3200 area. Due to the slight decline in U.S. stocks, commodity-related currencies faced selling pressure and rebounded slightly before the close. AUD/USD fell by 0.54%, and USD/CAD rose by 0.62%. The safe-haven currencies Swiss franc and Japanese yen changed little against the U.S. dollar each day, and both fell 0.19% against the greenback.

Gold rose 0.21% and hovered at $1786 per ounce area, while WTI oil dropped 1.08% to $71.16 per barrel.

Technical Analysis

BTCUSD (Daily Chart)

On Monday, 90% of Bitcoin have been mined according to the tracker from Blockchain.com. That being said, 90% of the coin are on the open market. From the technical aspect, Bitcoin falls back from $50,132, a 1.41% rise on Sunday. Bitcoin starts the week by re-testing the support pivot again at $46,510. On the daily chart, Bitcoin needs to move back through $55,103 to initiate the first bullish momentum into play. Failure to move back through the immediate resistance would continue to make Bitcoin a downside. If the support at $46,510 cannot hold, then Bitcoin will head toward the next support at $39,566. However, it looks like the bearish momentum is being weakened as the RSI remains in an oversold condition, due for a bounce back.

Resistance: 55,103, 58,000, 68,991

Support: 46,510, 39,566, 32,621

GBPUSD (4- Hour Chart)

GBPUSD edged higher on Monday as the US dollar struggled to preserve its strength to start the week. From the technical perspective, the outlook of the pair turns upside in the near term as it has breached the descending trendline and is trading above the 50 moving averages. However, the upside momentum seems lacking in strength as the currency continues to consolidate in the range from 1.3321 to 1.3163. Moreover, the RSI indicator has hovered around the midline, indicating that the buyers and sellers show less interest in the pair for the time being. On the downside, if the pair falls below the bearish trendline, then it will turn bearish in the near- term and head toward 1.3163. Current resistance awaits at 1.3163 while supports are located at 1.3321, followed by 1.3419.

Resistance: 1.3321, 1.3419, 1.3499

Support: 1.3163

EURUSD (4- Hour Chart)

EURUSD rebounds toward 1.1300 to start the new week as the decline of the US bonds makes it difficult for the US dollar to outperform its rival currencies. From the technical perspective, the 4-hour outlook hints that the bullish momentum is still being limited as EURUSD continues to develop below the simple moving averages, currently hovering below the 20 and 50 SMAs. In the meantime, EURUSD keeps trading within the lower bounce of Bollinger Band after bottoming at 1.1259. It is expected to see the pair consolidate below the moving averages as the RSI is currently neutral, hovering around the midline; furthermore, the MACD is flat, neither supporting buyers nor sellers. Further movements of the pair will eye on Tuesday’s US PPI report.

Resistance: 1.1357, 1.1462, 1.1548

Support: 1.1186

20211214
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The US CPI came in 6.8%, which is the highest since 1982…

The US CPI came in 6.8%, which is the highest since 1982 but corresponds with the market’s expectations

20211213
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Market Focus

US stock advanced on Friday, recovering from the previous day’s slide. The market now tends to believe that the Federal Reserve won’t have to accelerate plans to tighten monetary policy after the release of in-line inflation data. The US CPI came in 6.8%, which is the highest since 1982 but corresponds with the market’s expectations. Therefore, the fact that high US inflation wasn’t even higher supports the equity market. Also, Consumer Sentiment in US improved from a decade-low in November. On top of that, concerns about the spread of the new Omicron variant keep weighing on market sentiment, as companies in UK have started to tell employees to work from home. Investors now await the key Fed meeting this week, which might provide some clues on the pace of bond tapering and interest rate hikes.

The benchmarks, S&P 500, Nasdaq 100 and the Dow Jones Industrial Average both rose on Friday amid an upbeat market mood and relief that Fed won’t have to raise interest rates too early. S&P 500 was up 1.0% on a daily basis and the Dow Jones Industrial Average advanced with a 0.7% gain for the day. All eleven sectors stayed in positive territory as the information technology and consumer staples sectors are the best performing among all groups, gaining 2.07% and 1.99%, respectively. The Nasdaq 100 advanced the most with 1.1% gain on Friday and the VIX fell a further more than 2.0 points to under 19.50.

In Asia, after disclosures that came a day after the developer officially defaulted on their dollar debt, China Evergrande Group chairman Hui Ka Yan was forced to sell pledged shares in the company. Therefore, shares of Evergrande declined 1.7% lower as well as Chinese real estate stocks, which were also down 1.5%.

Main Pairs Movement

The US dollar edged 0.2% lower last Friday, staying in negative territory amid improved market sentiment. The DXY index gained bullish momentum and touched a daily top above 96.42 level during the European session, but then pulled back to below 96 and surrendered its intraday gains at the end of the day. The in-line US CPI data supported major US equities and put pressure on the greenback. Markets focus now shift to the Fed meeting this week, as investors expect a speed-up bond tapering.

GBP/USD and EUR/USD both advanced last Friday amid US dollar weakness, climbing 0.34% and 0.20%, respectively. The cable saw fresh buying and touched a three-day high above 1.327 during the American session. Meanwhile, EUR/USD recovered from a two-day low that touched earlier in the day, trading at around 1.131 area at the end of the day.

Gold advanced and touched a daily top around $1790 amid the high US inflation report, which rose the most since the early 1980s. The renewed selling witnessed in the greenback also acted as a tailwind for the precious metal, which gained 0.41% on a daily basis. WTI oil surged 1.81% for the day, closing out its best weekly performance since August. The growing confidence that the new Omicron variant is set to be far milder than past variants like delta pushed oil prices higher.

Technical Analysis

AUDUSD (4- Hour Chart)

AUDUSD retests 0.717, gaining some positive traction after the US CPI report. From the technical perspective, the pair is currently challenging its immediate hurdle at 0.717. The outlook turns positive as the pair has breached the bearish trendline. If AUDUSD can officially trade above 0.717, then it will reaffirm its upside momentum in the near term. Either from the RSI or the MACD, a buying opportunity occurs as both indicators currently favor buyers. On the flip side, if AUDUSD falls below its support at 0.7116, then it will turn downside as it will fall within the bearish trendline.

Resistance: 0.717, 0.7227

Support: 0.7116, 0.6997

GBPUSD (4- Hour Chart)

GBPUSD climbs above 1.3230 on worrisome US inflation report, hitting the highest in almost four decades. The US dollar seems vulnerable after the inflation report; in the meantime, heating US inflation figures might hint at steeper US Fed tightening. From the technical aspect, today’s upside momentum seems to bring GBPUSD out of the bearish trendline on the 4-hour chart, suggesting an overturn from bearish to bullish in the near term. A neutral RSI looks to favor bullish traders, who are also supported by a positive MACD. The next relevant resistance is set at 1.332, followed by 1.3417. On the flip side, if the pair fails to close its intraday price above the bearish trendline, then a selling opportunity will occur. The next relevant support is set at 1.3163.

Resistance: 1.3321, 1.3419, 1.3499

Support: 1.3163

EURUSD (4- Hour Chart)

EURUSD bounces modestly above 1.1300 after the US inflation surged 6.8% in November, reaching the highest in almost four decades. From the technical aspect, the overnight pullback from weekly lows seems to turn the currency pair back to the bullish mode in the near term. Climbing back above 1.1300 favors bullish traders as EURUSD is now trading above its 20 and 50 SMAs; in the meantime, the MACD indicator is now turning into positive levels at the time of writing. The current upside momentum is expected to bring the pair toward its immediate resistance at 1.1357. On the flip side, selling below 1.1299 region will reaffirm the negative bias and accelerate the downside momentum toward its support at 1.1186.

Resistance: 1.1357, 1.1462, 1.1548

Support: 1.1186

20211213
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The benchmarks, S&P 500 and Nasdaq both dropped on Thursday as market…

The benchmarks, S&P 500 and Nasdaq both dropped on Thursday as market sentiment soured

20211210
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Market Focus

US stock declined on Thursday, ending its three-day winning streak. Investors are now worried about the restrictions to stop the spread of the Omicron variant could harm the economic recovery. A study has found that the new Omicron is 4.2 times more transmissible than the delta variant in its early stages. On top of that, UK PM Boris Johnson announced that the UK would start to reimpose Covid-19 restrictions on everyday life and people are encouraged to work from home. Investors now await the key US inflation data on Friday, which might provide some clues on the pace of bond tapering.

The benchmarks, S&P 500 and Nasdaq both dropped on Thursday as market sentiment soured and the bearish news about rising Omicron fears acted as a headwind for the equity markets. S&P 500 was down 0.7% on a daily basis and the Nasdaq 100 declined with a 1.5% loss for the day. Nine out of eleven sectors stayed in negative territory as the consumer discretionary and real estate sectors are the worst-performing among all groups, losing 1.70% and 1.36%, respectively. The Dow Jones Industrial Average was little changed on Thursday.

In Asia, China Evergrande Group and Kaisa Group Holdings Ltd. officially defaulted on their dollar debt, and the China authorities have made it clear that they have no intention of bailing out the Evergrande Group to prevent scenarios of a collapse. Moreover, the People’s Bank of China raised its foreign currency reserve requirement ratio for a second time this year.

Main Pairs Movement

The US dollar edged higher on Thursday, staying in positive territory amid risk-off market sentiment. The DXY index gained bullish momentum and touched a daily top above 96.3 level during the American session, but pulled back slightly and surrendered some of its intraday gains at the end of the day. Markets focus now shift to US Core CPI reports on Friday, as the Fed said it would be appropriate to discuss speeding the QE taper at next week’s meeting due to rising inflation pressure.

GBP/USD advanced on Thursday, climbing towards 1.322 area and recovered from yearly lows that touched earlier this week, despite the UK promoting the work-from-home culture on Omicron variant threat. Meanwhile, EUR/USD dropped to daily lows below 1.129 level and posted a 0.47% loss on a daily basis, as investors now await the ECB monetary policy meetings next week.

Gold dropped to $1775 area amid Covid-19 restrictions spurred by the Omicron variant’s rapid spread. The recovery witnessed in the Greenback also weighed on the precious metal, which slid 0.48% on a daily basis. WTI oil tumbled 2.78% for the day, ending its previous rally. Covid-19 restrictions and the spread of the omicron variant both decreased the oil demand, dragging oil prices lower.

Technical Analysis

AUDUSD (4- Hour Chart)

AUDUSD witness a turnaround from a two-week high as hawkish Fed expectations have renewed US dollar buying. Moreover, the US dollar regains strength after the economic data, initial jobless claims have shown a better-than-expected result. In the meantime, the latest US CPI report which will be released this Friday will heavily influence the US dollar price dynamics. From the technical perspective, the 4-hour outlook remains bullish as it has not yet fallen within the bearish channel. The pair fails to challenge the resistance of 0.7170, giving the pair potentials to consolidate in the range of 0.7170 and 0.7116. The downside momentum is limited as the RSI is clear from the overbought condition while the MACD is still positive. The pair needs to fall below the support of 0.7116 and the midline of the Bolliger Band to present a negative level.

Resistance: 0.717, 0.7227

Support: 0.7116, 0.6997

BTCUSD (Daily Chart)

The Bitcoin hash rate, which is a measure of computing power, has almost recovered to its level in May when the Chinese government started a crackdown on the mining industry. From the technical perspective. Bitcoin’s bulls have attempted to recover after hitting their support level at $46,510 last week, but it seems to hit a curb after reclaiming the psychological resistance at $50,000. The daily outlook looks bearish as it continues to trade below the ascending trendline, re-challenging its support at $46,510. Bitcoin’s bulls need to defend its support level in order to keep a further bullish correction alive. If it fails to defend, then the bearish momentum can go further toward the next support at $39,566. However, as the RSI indicator has almost reached the oversold territory, the bearish price action might fade soon. In the meantime, Bitcoin has reached the lower bounce of the Bollinger Band, suggesting a pullback. To the upside, Bitcoin needs to climb above the acceptance level at $55,103 in order to regain strength; otherwise, its daily outlook may remain bearish.

Resistance: 55,103, 58,000, 68,991

Support: 46,510, 39,566, 32,621

EURUSD (4- Hour Chart)

EURUSD declines below 1.1300 after the market is anticipating over a potential increase in the APP at its meeting next week. Dovish ECB headlines weigh on the euro and US dollar. At the same time, the US dollar rebounds amid a cautious mood on the new variant Covid. From the technical perspective, EURUSD trades below its 20 and 50- day SMAs, losing its positive momentum on the 4-hour chart, but still not yet claiming an upcoming decline as the MACD indicator is still positive, lending supports to bulls. In the same chart, if the currency pair remains below the SMAs, then it might head to the support at 1.1186 to extend its bearish mode. On the contrary, the pair needs to trade above the SMAs in order to reclaim and remain within positive levels.

Resistance: 1.1357, 1.1462, 1.1548

Support: 1.1186

20211210
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