Analyst Articles – Forex News 24

Crude Oil Price Reversals Suddenly Shift Outlook Lower
EURUSD Brushes Off Consumer Confidence Weakness, Heavyweight Data Ahead
Gold Price Rebound Under Threat, Silver Battles Conflicting Signals
Dollar May Rebound on Soft US PCE Data, S&P 500 May Be Topping
Asian Stocks Mixed Despite US Tailwind, Tokyo’s Long Absence Starts
Gold Prices Surge on US GDP Data, Chart Still Warns of Topping
ASX 200 Holds Near 11-Year Highs as Key Bank Earnings Approach

Crude Oil Price Reversals Suddenly Shift Outlook Lower

Posted: 29 Apr 2019 04:22 AM PDT

Crude Oil Technical Highlights:

WTI crude oil posted weekly reversal around 2016 trend-line
Brent crude down-move facing channel support test already

To see what fundamental drivers are expected to drive oil through the remainder of the quarter, check out the Q2 Crude Oil Forecast.

WTI crude oil posted weekly reversal around 2016 trend-line

Last week, WTI appeared headed for more push higher into the 67s before retreating, but with Friday's big down day a weekly reversal candle was cemented, and where it developed from was also important. In the vicinity of the past few weeks' trading range is the trend-line, or lower parallel of a channel, off the 2016 low.

With oil becoming quite extended in recent weeks, rallying over 50% off the December low and then having such a powerful key-reversal event, the trading bias has firmly turned in favor of shorts. Looking at the daily time-frame a few angles of support are on the verge of breaking, which could soon have the 200-day and lower parallel of the channel since February in play; both in the 61/60-area.

At this time, it will require a fair amount of work to turn the picture back in favor of longs. As long as a bounce doesn't overtake Friday's big down day it looks as though shorts will continue to have the upper hand in the sessions ahead.

WTI Crude Oil Weekly Chart (Reversal at 2016 line)

WTI Crude Oil Daily Chart (support about to break)

Brent crude down-move facing channel support test already

Brent has been lagging behind WTI a bit lately, and with that the bottom of the comparable channel since February is already coming under fire. If a bounce develops off the lower parallel, then the low of the bounce will be used on any weakness that follows as a cue to look for downside momentum to pick up again. A break, whether from right here or after a bounce, will have the 200-day in focus, followed by the 2016 slope down near 67.

Brent Crude Oil Weekly Chart (bearish reversal)

Brent Crude Oil Daily Chart (break of channel to lead to lower prices)

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—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

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2019-04-29 11:00:00

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EURUSD Brushes Off Consumer Confidence Weakness, Heavyweight Data Ahead

Posted: 29 Apr 2019 03:08 AM PDT

EUR Talking Points

EURUSD Pushing Higher
Eurozone Confidence Data

The EURUSD continues to push higher past 1.1150 after seeing new 2019 lows of 1.1110 last Friday following better than expected US GDP figures. The uptrend, which started on the back of the Spanish Election outcome, was continuing this morning as the lack of material figures from the Eurozone saw the EUR's sensitivity to Consumer Confidence figures reinforced. On release of the figures, the pair moved slightly lower but quickly bounced back surpassing the 1.1164 line.

EURUSD PRICE CHART: 1 Minute Time-Frame (Intraday)

As the session ahead has little in terms of key economic releases from the Eurozone, the main driver on the currency pair is expected this afternoon when the US Price and Spending figures are released.

EUR Forecast: Traders Eye Eurozone GDP, Jobs, CPI Data Upcoming

EURUSD traders will now look ahead to the provisional Eurozone Q1 GDP figures out Tuesday which are expected to show a slight increase from 0.2% to 0.3%, despite the Brexit drag. At the end of the week, the first look at Eurozone inflation data will be closely watched. Inflation in the single-block is expected to tick up to 1.6% from 1.4% y/y.

DailyFX Economic Calendar.

Eurozone Confidence Data

The final figures for Consumer Confidence in the month of April remain constant at -7.9 as the Eurozone Economic Confidence hits its lowest level since September 2016 at 104.

Despite an increase from 11.3 to 11.5 in the Eurozone Services Confidence, which accounts for roughly two thirds of total Euro-zone GDP, it has not proved to be enough to halt the decline in Economic Confidence. The fall is mainly led by a deterioration of Industrial Confidence from -1.7 to -2, which accounts for 40% of the Index. This figure asks for production expectations, meaning that a deterioration indicates a negative outlook for the future of the business spending and capital investment. Sentiment in the industry fell for a fifth consecutive month to -4.1 from -1.6 in March, well below expectations of -2.

IG Client Sentiment – EURUSD: Retail trader data shows 56.0% of traders are net-long with the ratio of traders long to short at 1.27 to 1. In fact, traders have remained net-long since Apr 12 when EURUSD traded near 1.12974; price has moved 0.4% lower since then. The number of traders net-long is 3.0% lower than yesterday and 6.7% higher from last week, while the number of traders net-short is 16.6% higher than yesterday and 5.8% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EURUSD prices may continue to fall. Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.

KEY TRADING RESOURCES:

— Written by Daniela Sabin Hathorn, Junior Analyst

2019-04-29 09:37:00

Gold Price Rebound Under Threat, Silver Battles Conflicting Signals

Posted: 29 Apr 2019 01:12 AM PDT

Gold and Silver Price Analysis and Charts.

Gold's recent pull-back has come to a halt ahead of a week packed full of risk events.
Silver caught between trend and 200-day moving average.

DailyFX Q2 Forecasts and Top 2019 Trading Opportunities.

Gold Fades Lower but Risk Lies Ahead

Gold sits just above an important support zone as it tries to keep gains made last week. While the short-term chart pattern remains bearish, with lower highs and lower lows seen since February 20, the week is full of high-risk events and data releases which may help to underpin gold at its current levels.

Gold Price Outlook: A Week Packed Full of Major Risk Events and Data

The daily chart shows gold nearing the $1,276 – $1,281/oz zone that acted as minor resistance last week. The upper band of this zone should now act as first, minor, support before $1,276/oz and $1,266/oz come into play. To the upside, 61.8% Fibonacci retracement at $1,287/oz is the first target for bullish traders followed shortly after by $1,289/oz. The CCI indicator shows gold mid-market, neither overbought or oversold.

Gold Daily Price Chart (May 2018 – April 29, 2019)

Trading the Gold-Silver Ratio: Strategies and Tips.

IG Client Sentimentshows that retail traders are 73.0% net-long gold, a bearish contrarian indicator. However, recent daily and weekly sentiment shifts suggest that the current gold trend may reverse higher.

Silver – 200-DMA Battles Bearish Bias.

Silver remains just above $15.03/oz with minor support seen at the physiological $15.00/oz before slightly more meaningful support from the 200-day moving average, currently at $14.97/oz. The longer-dated ma has provoked supportive price in the last month and may turn to resistance if a fresh break and close below occurs. Below here 23.6% Fibonacci retracement at $14.91/oz. Silver has broken – is currently trading above – the downtrend line based off the February 20 high, and a clean break and close above may bring open the way to $15.09 – $15.11/oz in the short-term. The last swing high at $15.34/oz remains the next target.

How to Trade Silver: Top Silver Trading Strategies.

Silver Daily Price Chart (August 2018 – April 29, 2019)

IG Client Sentiment shows how retail traders are positioned in a wide range of currencies, commodities and cryptocurrencies. See how recent changes in positioning affect our trading bias.

— Written by Nick Cawley, Market Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

2019-04-29 08:00:00

Dollar May Rebound on Soft US PCE Data, S&P 500 May Be Topping

Posted: 29 Apr 2019 12:36 AM PDT

TALKING POINTS – CHINA, INDUSTRIAL PROFITS, YEN, US DOLLAR, PCE

Aussie, NZ Dollars rise as Yen falls in risk-on APAC session
Chinese industrial profits surge, snapping 2-month loss streak
Disappointing US PCE data may sour market sentiment anew

The sentiment-geared Australian and New Zealand Dollars narrowly outperformed while the anti-risk Japanese Yen edged lower as risk appetite firmed in Asia Pacific trade. The absence of Tokyo made for thin conditions but Chinese names led regional bourses to a narrow gain.

That may reflect a response to data published over the weekend showing Chinese industrial profits jumped 13.9 percent on-year in March. The outcome snapped a 2-month losing streak and marked the fastest growth rate since July 2018. This might have eased trade war worries somewhat.

The spotlight now turns to the US personal spending and incomedata set. Narrow improvements are expected but a disappointment may be in the cards if the outcomes echo the trend toward disappointment relative to forecasts on macro news-flow over recent months.

The Fed's favored PCE inflation gauge is perhaps the most eye-catching bit of the release. Baseline projections envision the slowest price growth in over a year. That might be read as indicative of fizzling economic momentum, feeding global slowdown fears.

Prevailing sentiment trends may flip to a "risk-off" setting in this scenario (although follow-through may be limited ahead of Wednesday's FOMC rate decision). That might see the US Dollar return to the offensive alongside the Yen while commodity-bloc currencies backtrack.

Bank of England Governor Mark Carney is also due to speak. Absent a bonafide bombshell, his remarks are unlikely to stir the British Pound as markets await the official policy announcement and quarterly Inflation Report (QIR) due Thursday before showing committing directional commitment.

What are we trading? See the DailyFX team's top trade ideas for 2019 and find out!

CHART OF THE DAY – EVIDENCE OF S&P 500 TOP CAUTIOUSLY MOUNTING

Signs of topping continue to accumulate on the daily S&P 500 chart. Prices continue to hover below the 2018 swing high at 2947, sitting squarely at resistance reinforced by the top of a bearish Rising Wedge chart pattern and the underside of former support set from February 2016.

Negative RSI divergence now bolsters the case for reversal lower, although confirmation is absent. To begin securing that, a first step would be to break below Wedge support – now at 2900 – on a daily closing basis. From here, downside barriers appear at 2865.00 and 2807.50.

FX TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

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2019-04-29 06:30:00

Asian Stocks Mixed Despite US Tailwind, Tokyo’s Long Absence Starts

Posted: 28 Apr 2019 10:39 PM PDT

Asian Stocks Talking Points:

Asia Pacific equity put in a mixed performance
US growth provided an initial boost but it faded quite quickly
A log run of Japanese holidays is getting under way

Find out what retail foreign exchange investors make of your favorite currency's chances right now at the DailyFX Sentiment Page

Asian stock markets endured a mixed Monday despite Wall Street's bout of strength at the end of last week following better-than-expected US growth figures and some punch earnings reports.

The region was without usual bellwether Japan, with markets there closed until May 6 in a holiday break which sees the traditional 'Golden Week' celebration augmented by further days off to mark the abdication of Emperor Akahito which will take place on Tuesday.

Hong Kong's Hang Seng caught the US tailwind and rose 0.7% as its close approached. Mainland markets struggled, with Shanghai down 0.1%- analysts are reportedly getting a little worried about stretched valuations there. Australia's ASX 200 retreated modestly from last week's eleven-year highs but seems to be largely retaining its composure into a week which will see the release of important domestic bank results.

Currency markets were even more obviously becalmed without Tokyo. Regional traders seemed highly reluctant to push matters too far without that city's participation, especially during a week which will offer a monetary policy decision from the Federal Reserve and important US labor market statistics. The US Dollar was barely changed against a basket of major traded rivals.

USD/JPY remains, just, within the daily chart range derived from its former previous peaks, those of late February and early March.

This pair is likely to be especially volatile until Japanese markets return to full-steam, and appears to be in the process of retesting that range base.

Crude oil prices slipped back after a Tweet from Donald Trump urging OPEC to increase production and offset the effects of sanctions against Iran. Gold prices. Gold prices rose to one week-highs last week on signs of softer US inflation but retreated a little through the Asian session.

Monday's main scheduled economic data event is still to come in the form of March personal consumption and expenditure figures out of the US but they're note quite alone on the schedule. The Dallas Federal Reserve's manufacturing snapshot is also coming up, and the markets will also hear from Bank of England Governor Mark Carney. He's due to speak in London.

Resources for Traders

Whether you're new to trading or an old hand DailyFX has plenty of resources to help you. There's our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There's also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they're all free.

— Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

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2019-04-29 05:02:00

Gold Prices Surge on US GDP Data, Chart Still Warns of Topping

Posted: 28 Apr 2019 10:01 PM PDT

GOLD & CRUDE OIL TALKING POINTS:

Gold prices rise as Treasury yield and Dollar fall on US GDP data
Crude oil prices sink as Trump claims OPEC agrees to output boost
US personal income & spending, PCE inflation data now in focus

Gold prices posted the largest daily gain in nearly two months as first-quarter US GDP data weighed on Treasury bond yields and the Dollar. That bolstered the relative appeal of non-interest-bearing and anti-fiat assets. Not surprisingly, that spoke directly to the yellow metal.

A rosy headline number masked internal weakness: much of the rise was accounted for by volatile factors like inventories and trade, where a drop in imports was a bigger contributor than a rise in exports. Meanwhile, private consumption – the main engine of US growth – cooled for a third consecutive quarter.

Crude oil prices sank after US President Donald Trump called on OPEC to lower prices. He tweeted that Saudi Arabia and other producers were "in agreement" about increasing flows, even as the cartel leads a coordinated output cut effort. The WTI benchmark suffered the largest single-session loss yet in 2019.

US INCOME AND SPENDING, PCE INFLATION DATA MAY HURT COMMODITIES

Looking ahead, the March set of US personal income and spending data headlines an otherwise quiet data docket. Improvement is expected but deepening underperformance in recent macro news-flow warns of disappointment risk.

The Fed's favored PCE inflation gauge may be the most eye-catching bit of the report. It is set to show that core price growth slowed to 1.7 percent on-year last month, marking the softest print in over a year. Such an outcome would hint at sagging economic momentum.

Soft outcomes may stoke global slowdown fears, inspiring risk aversion. That might weigh on cycle-sensitive oil prices and drive haven demand for the Greenback, countering whatever support gold might have hoped to enjoy from a downshift in lending rates.

See the latest gold and crude oil forecasts to learn what will drive prices in the second quarter!

GOLD TECHNICAL ANALYSIS

Gold prices bounced to retest support-turned-resistance at the neckline of a bearish Head and Shoulders (H&S) chart pattern, now at 1289.59. A daily close back above it would set the stage for a challenge of the 1303.70-09.12 zone. Near-term support is in the 1260.80-63.76 area, with a break below that eyeing 1235.11-38.00 region next. The H&S setup implies a measured downside objective at 1215.00.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices turned lower as expected, dropping to support guiding them higher since December. Bearish reversal confirmed on a daily close below this boundary – now at 63.00 – targets 60.39 next. Alternatively, a rebound that takes prices back above resistance in the 66.09-67.03 area may extend into a retest of the $70/bbl figure.

COMMODITY TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

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2019-04-29 04:30:00

ASX 200 Holds Near 11-Year Highs as Key Bank Earnings Approach

Posted: 28 Apr 2019 07:25 PM PDT

ASX 200 Technical Analysis Talking Points:

The ASX has reached significant highs, breaking above its former range
Its retreat since has been very scant
Now important bank results may set the fundamental tone

Find out what retail foreign exchange traders make of the Australian Dollar's chances right now at the DailyFX Sentiment Page.

The ASX 200 has risen the recent bout of resilient risk aversion perhaps as well as any other index, rising up last week through its previous trading range to peaks we've not seen since November 2007.

Moreover, the Australian stock benchmark has not so far retreated very much from those dizzy heights since. That indicates what for the bulls must be a reassuring degree of comfort both with current altitudes and with a distance of nearly 400 points from the 6000 mark which has often proved so psychologically crucial to the index in the past.

That said the coming week's action may well have fundamental roots, with many of Australia's big banks set to release interim results. National Australia Bank, Macquarie and the Australia and New Zealand Bank are all due to publish. Financials make up the largest single sector of the index and local lenders have had to contend with both lower interest rates, conduct inquiries tougher capital requirements. Those results may not set the index on fire.

Indeed, the wait for them is probably what has seen progress halt at those still-impressive eleven-year peaks.

Now that old trading range between 6407.5 and 6208.8 comes back into play as near-term support and, if it can hold through this week, then the bulls may well consider themselves still in the driving seat.

That being so their next order of business will be measurable consolidation above the range, with their sights probably set on 2007's overall peaks just above 6,800. This will be a region to which visits have been fleeting in the memory of most market participants, however, and risk appetite will have to be hearty indeed to endure progress much beyond this mark.

The index remains very much within durable uptrend channels on both its daily and monthly charts, however, so while these are unthreatened more progress seems likely. Within the channel support is likely in the 7278 region where trade concentrated between April 1 and 24, with overall channel support coming in at 6178, a good way below the market.

Obviously if this were to break then the medium term bullish case would be under more serious threat, but it looks solid enough for now. If the index can hold up through this week's bank earnings then there is probably more juice left in the current rally, impressive though it has already been,

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— Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

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2019-04-29 02:02:00