Connect with us

Forex

Crude Oil, Gold Prices May Fall on US Retail Sales and Sentiment Data

Published

on


Crude Oil, Gold, XAU/USD, US Stimulus, Retail Sales, Consumer Sentiment – Talking Points:

  • Crude oil prices trimmed losses on falling inventory, US stimulus bets
  • Gold prices may fall if US retail sales, sentiment disappoints later on
  • WTI facing mixed technical signals, XAU/USD still favoring downside

Crude oil prices swung between losses and gains over the past 24 hours, ultimately ending lower during a volatile trading session. At one point, the commodity was down as much as 4.42% before trimming most of its weakness. Meanwhile, anti-fiat gold prices finished just cautiously higher as the yellow metal rallied during the Wall Street trading session alongside the S&P 500.

Growth-sensitive oil prices remain tied to ongoing US fiscal stimulus talks. Initially, sentiment was fading amid doubts of a deal between lawmakers. However, oil received a lift as President Donald Trump said that he was willing to go beyond the Republican-lead US$1.8 trillion package. It also did not hurt that US oil stockpiles shrunk by 3.8 million barrels last week, larger than the -2.1 million consensus.

Speaker of the House Nancy Pelosi also said that a Covid package will not have to wait until January. The need for further economic support is arguably rising. The Citi Economic Surprise Index tracking the US is near a 3-month low, showing that the level of rosy surprises in data has been fading since the Summer. This could open the door to lackluster outcomes ahead.

As the week wraps up, US retail sales and University of Michigan consumer sentiment are due during the Wall Street trading session. A disappointment could deteriorate market mood further, denting crude oil prices and the S&P 500. If this fuels demand for haven assets, such as the US Dollar, that could in-turn send gold prices to the downside. Of course, progress towards a stimulus deal could offset these jitters.

Crude Oil Technical Analysis

WTI crude oil remains in a consolidative state since prices appeared to top in the middle of August. The commodity has been ranging between support and resistance at 36.15 and 43.87 respectively. A bearish ‘Death Cross’ formed in early September as the 20-day Simple Moving Average (SMA) crossed under the 50-day SMA. However, oil also pushed through a falling trend line from January. Confirmation is however lacking.

Oil Forecast

Oil Forecast

Recommended by Daniel Dubrovsky

What is the road ahead for crude oil in Q4?

WTI Crude Oil Daily Chart

Crude Oil, Gold Prices May Fall on US Retail Sales and Sentiment Data

Chart Created Using TradingView

Gold Technical Analysis

Gold prices have lately been struggling to add onto gains since XAU/USD found support in late September. Falling resistance from August seems to be maintaining a slight downside bias along with a bearish ‘Death Cross’. A close under short-term rising support from late September could open the door to testing the 1848 – 1863 zone for another attempt to extend losses since August.

Gold Forecast

Gold Forecast

Recommended by Daniel Dubrovsky

What is the road ahead for gold in Q4?

XAU/USD Daily Chart

Crude Oil, Gold Prices May Fall on US Retail Sales and Sentiment Data

Chart Created Using TradingView

— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter





Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Forex

Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence

Published

on

By


DOW JONES, NIKKEI 225, ASX 200 INDEX OUTLOOK:

  • Dow Jones had its worst day in more than a month amid virus, election and stimulus concerns
  • US corporate earnings continued to beat forecasts, but failed to lift market confidence
  • Nikkei 225 and ASX 200 index may lead Asia-Pacific market lower. Ant Financial IPO in focus

Dow Jones Index Outlook:

The Dow Jones Industrial Average (DJIA) index fell 2.29% on Monday, marking its worst trading day since 21st September. A worrying virus resurgence across the US and Europe and a pending US relief package are among the top weighing factors. US corporate earnings continued to fare well, but investors are perhaps looking beyond the current season and assessing a potentially slower pace of growth in the winter.

The US has registered 59,691 new coronavirus cases on October 25th, marking a decline for the second day after hitting a record on 23rd. Yet there appears to be lack of incentive from the government to impose lockdown measures before the US election, rendering risk assets vulnerable to further pullback should coronavirus cases continue to climb.

Map of cases (last 14 days)

Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence

Source: Google

Asia-Pacific stocks look set to trade broadly lower on Tuesday. They may, however, demonstrate resilience against external headwinds. Virus situations are better managed across the Asia-Pacific region, with China remaining a key growth engine. Some 137 new confirmed Covid-19 cases were reported in Xinjiang province on Friday, resulting in a rapid response to test 3 million people in the area.

Chinese fintech giant Ant Financial, possibly the world’s largest IPO ever, has been priced at HK$ 80 per share. Ant will be listed in both Shanghai and Hong Kong on November 5th, shortly after the US election.

Equities Forecast

Equities Forecast

Recommended by Margaret Yang, CFA

What is the road ahead for equities this quarter?

On the macro front, Chinese industrial profits and US durable goods orders and consumer confidence are among the top events. Find out more on our economic calendar.

Sector-wise, all 9 Dow Jones sectors closed in the red, with 96.7% of the index’s constituents ending lower on Monday. Industrials (-3.07%), materials (-2.84%) and financials (-2.80%) were among the hardest hit, whereas defensive-linked consumer staples (-1.15%) and healthcare (-1.54%) were performing slightly better.

Dow Jones Index Sector Performance 26-10-2020

Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence

S&P 500 Index Q3 Earnings Update – October 26th 2020

Name

Date

Period

Actual

Estimate

Surprise

Otis Worldwide Corp

26/10/2020

Q3 20

0.69

0.554

24.50

Hasbro Inc

26/10/2020

Q3 20

1.88

1.596

17.80

HCA Healthcare Inc

26/10/2020

Q3 20

1.92

2.283

(16.10)

Cincinnati Financial Corp

26/10/2020

Q3 20

0.39

0.39

0.00

F5 Networks Inc

26/10/2020

Q4 20

2.43

2.376

2.30

Alexandria Real Estate Equitie

26/10/2020

Q3 20

1.83

1.831

(0.10)

Principal Financial Group

26/10/2020

Q3 20

0.85

1.399

(39.20)

Packaging Corp of America

26/10/2020

Q3 20

1.57

1.424

10.30

National Oilwell Varco Inc

26/10/2020

Q3 20

(0.02)

(0.117)

86.60

Forex for Beginners

Forex for Beginners

Recommended by Margaret Yang, CFA

Why do interest rates matter for currencies?

Technically, the Dow Jones index has decisively broken down the 50-Day Simple Moving Average line at 28,040 (chart below). Breaking this immediate level may have opened the room for more downside towards the next support levels at 27,755 (the 50% Fibonacci retracement) and then 27,470 (the 61.8% Fibonacci retracement) respectively.

The MACD indicator formed a “Death Cross” last week and prices have been trending lower since. This suggests that bearish momentum is dominating for now. The index price has also pierced through its lower Bollinger Band, signaling strong downward momentum.

Dow Jones IndexDaily Chart

Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence

Nikkei 225 Index Outlook:

Technically, the Nikkei 225 index has likely formed a “Rising Wedge” on its daily chart, with the 20-, 50- and 100-Day SMA lines all trending up steadily over the past few months. The Nikkei may risk a temporary pullback against the backdrop of external headwinds, potentially breaking the “Rising Wedge” lower if selloff pressure in the US market persists. An immediate resistance level can be found at 24,000 – the previous high seen in mid-February 2020. The 50-Day SMA can be perceived as an immediate support level.

Nikkei 225 Index Daily Chart

Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence

ASX 200 Index Outlook:

Technically, Australia’s ASX 200 stock benchmark hit a major resistance level at 6,200 and has retraced since then. The near-term trend appears to be bearish-biased, with the MACD forming a “Dead Cross” recently. Immediate support levels can be found at the 6,000- 6,020 area, where the 50-Day and 100-Day SMA lie.

ASX 200 Index Daily Chart

Dow Jones Pulls Nikkei 225, ASX 200 lower on Alarming Covid-19 Resurgence

How to Use IG Client Sentiment in Your Trading

How to Use IG Client Sentiment in Your Trading

Recommended by Margaret Yang, CFA

Improve your trading with IG Client Sentiment Data

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter





Source link

Continue Reading

Forex

Dollar holds small gains as markets buffeted by COVID-19 woes, election uncertainty By Reuters

Published

on

By



By Tom Westbrook

SINGAPORE (Reuters) – The dollar clung to small gains on Tuesday as the greenback’s safe-haven appeal was burnished by worries about a second wave of COVID-19, which drove the steepest stock market selloff in a month and underpinned a bond rally.

The United States, Russia and France all hit new daily records for coronavirus infections and overnight the S&P 500 index () fell 1.9% and Germany’s DAX () dropped 3.7%.

Moves in the currency market were more muted, though the () lifted about 0.3% overnight and held there early in Asia trade while regional equities fell.

The largest gains for the greenback on Monday came against the (), up 0.4%, which was hit by a drop in German business confidence, and a 0.7% rise on the Canadian dollar as oil prices slumped.

The yuan nursed a 0.5% loss as Sino-U.S. tensions flared over arms sales to Taiwan.

“The dollar is broadly stronger, but not massively,” said National Australia Bank (OTC:) senior FX strategist Rodrigo Catril.

Structural forces, like low real yields, have held back further gains, he added, and so has a wait-and-see approach to the U.S. election.

“I think many would probably remember the bad experiences we had going in to the Trump-Clinton election (in 2016),” said Catril.

“If you had a position on, you would have been whipsawed big time. I think the strategy this time is to travel light, and to choose the opportunity on the day rather than take on a very, very strong position going into the election.”

The usually risk-sensitive Australian and New Zealand dollars dipped only marginally overnight and were firm in the early part of the Asia session. [AUD/]

The Japanese yen did not move much as U.S. equities sold off, and was steady at 104.76 per dollar in Asia. Sterling slipped overnight but was back above $1.30 on Tuesday.

A week out from polling day, national polls give Democrat Joe Biden a solid lead but the contest is much tighter in battleground states that could decide the outcome.

Biden and President Donald Trump both spent Monday campaigning in Pennsylvania.

Analysts regard a Biden victory, and especially Democrat control of the Senate, as negative for the dollar since it is expected to deliver big stimulus spending that would boost investor sentiment and drive demand for riskier currencies.

Positioning data showed long bets on the yen shrank for a fourth straight week last week, as investors wagered on a Biden victory, though short bets against the yen also fell – pointing to heightened uncertainty around the vote.

The euro nursed losses at $1.1809, having borne the brunt of worries about fresh coronavirus lockdowns and slipping after the German Ifo business climate index fell by more than expected and for the first time in six months in October.

Traders are waiting for any news to emerge from a meeting of China’s Communist Party leaders to set the next five-year plan, while keeping a wary eye on the potential fallout from U.S. arms sales to Taiwan.

China said it will impose sanctions on Lockheed Martin (N:), Boeing Defense (N:) and Raytheon (N:).

Elsewhere the Turkish lira hit a record low on Monday amid a slew of geopolitical concerns and as a surprise central bank decision to keep its policy rate on hold last week reveberates through markets.





Source link

Continue Reading

Forex

Dollar Down, U.S.-China Tensions Rise By Investing.com

Published

on

By


© Reuters.

By Gina Lee

Investing.com – The dollar was down on Tuesday morning, giving up earlier gains. Tensions between the U.S. and China are rising and concerns, and continuing worries over the second wave of COVID-19 drove the steepest stocks selloff in a month and a bond rally

The , which tracks the greenback against a basket of other currencies, edged down 0.11% to 92.942 by 10:31 AM ET (2:31 AM GMT).

On the COVID-19 front, the U.S., Russia and France all set new records for the number of daily COVID-19 cases. There are over 43.4 million cases globally as of Oct. 27, according to Johns Hopkins University data.

Some investors were wary of the dollar’s prospects ahead of the Nov. 3 U.S. presidential election.

“The dollar is broadly stronger, but not massively,” with structural forces such as low real yields holding back further gains adding to the wait-and-see approach to the election, National Australia Bank (OTC:) senior FX strategist Rodrigo Catril told Reuters.

“I think many would probably remember the bad experiences we had going into the Trump-Clinton election [in 2016] … if you had a position on [the election], you would have been whipsawed big time. I think the strategy this time is to travel light, and to choose the opportunity on the day rather than take on a very, very strong position going into the election,” Catril added.

With a week remaining, although polls are giving Democrat candidate Joe Biden a solid lead over President Donald Trump, both men were engaging in some last-minute campaigning in battleground states where the race is tighter.

Some investors view a Biden victory, especially if combined with a Democrat Senate, as negative for the greenback as the Democrats are expected to introduce stimulus measures with big price tags to combat COVID-19, which is expected to improve investor sentiment and boost riskier currencies.

Investors are already starting to bet on a Biden victory, with positioning data showing long bets on the safe-haven yen shrinking for a fourth consecutive week. But a fall in short bets against the yen pointed to increased uncertainty about the election’s outcome.

The pair inched down 0.10% to 104.71.

The pair edged down 0.12% to 6.7038. U.S.-China tensions mounted over a potential $2.4 billion sale of U.S. anti-ship missiles to Taiwan, potentially encompassing as many as 100 Harpoon Coastal Defense Systems built by Boeing (NYSE:). The systems in turn include up to 400 land-based missiles China reacted to the news by slapping sanctions on U.S. companies, including Lockheed Martin (NYSE:), Boeing Defense and Raytheon (NYSE:) “in order to uphold national interests,” Chinese Foreign Ministry spokesman Zhao Lijian said on Monday. Meanwhile, the Chinese Communist Party will set the nation’s next five-year plan within the week.

The pair edged up 0.17% to 0.7134 and the pair edged up 0.1% to 0.6690. The pair inched up 0.10% to 1.3037.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Continue Reading

Trending

Copyright © 2017 Zox News Theme.