Analyst Articles – Forex News 24

Potential Comeback for the Sellers
Nikkei 225 Rallies with Nintendo Stock, S&P 500 Momentum Fading?
USDJPY and Gold Show What Fed Support Can Truly Offer Market
Dollar Drop More Reliable than S&P 500 Record High as Fed Readies Rate Cut
Gold Prices Eye 2019 High Following Dovish Fed Testimony
Crude Oil Prices Eye April High, Fed Ready for First Cut Since 2008?
Index Crosses 3,000 & Delta (DAL) Earnings Ahead
Crude Oil Price Soars to 7-Week High on Fed & Supply Shock
USD Drops, S&P 500 Hits Record on Dovish Fed Minutes, Powell Testimony
Platinum Price Outlook: Breaking above The Weekly Resistance

Posted: 11 Jul 2019 03:27 AM PDT

EUR/CHF, USD/CHF Price Outlook, Charts and Analysis

Eyes on ECB minutes and US Dollar CPI numbers due to release today.
USD/CHF and EUR/CHF price action.

Did you check our latest forecasts on USD and EUR and Gold ? Find out more for free from our Q3 forecasts for commodities and main currencies

EUR/CHF and USD/CHF Struggle to start an uptrend

At the start of July USD/CHF opened with an upside gap then rallied after and closed the weekly candlestick with 1.5% profit. However; the price dropped this week, leaning to move in a sideways pattern.

In turn, EUR/CHF opened also with an upside gap, however; the pair struggled to push higher and closed with a Doji pattern for the second week in a raw, reflecting more hesitation form the buyers in pushing the price higher.

Alongside, the Relative Strength Index (RSI) continued flirting with the 50 vicinity in both pairs, but without showing any serious impulse to start up an upwards move.

Just getting started? See our Beginners' Guide for FX traders

USD/CHF Daily Price Chart (OCT 27, 2016 – JULY 11, 2019) Zoomed Out

USD/CHF Daily Price Chart (April 3 – JULY 11, 2019) Zoomed IN

Looking at USD/CHF daily chart, we notice the pair on Tuesday peaked at 0.9951, then dropped today to test a lower trading zone 0.9785 – 0.9860.

Hence, a close below the high end of the aforementioned trading zone may send the price towards the low end, nonetheless; the weekly support levels underlined on the chart (Zoomed in) should be watched along the way.

On the other hand, a failure to close below the high end could cause USD/CHF to rally towards 0.9930, however; the daily resistance vicinity from 0.9885 up to 0.9904 needs to be considered.

Having trouble with your trading strategy? Here's the #1 Mistake That Traders Make

EUR/CHF Daily Price Chart (JAN 26, 2017 – JULY 11, 2019) Zoomed Out

EUR/CHF Daily Price Chart (MAR 6 – JULY 11, 2019) Zoomed IN

Looking at EUR/CHF daily chart, we notice the pair has been pressing towards the high end of the current trading zone 1.1057 – 1.1190, then paused its upward move on July 2 and corrected lower creating a lower high on Tuesday at 1.1158.

Today, the pair is eyeing for a test of the neckline of the double top pattern residing at 1.1107, hence; if the price breaks and remains below the neck line, this suggests EUR/CHF may press towards 1.1042, although; the lower end of the aforementioned trading zone should be kept in focus. See the chart (Zoomed in) to know more about the key levels to consider if the price closes below the low end of the trading zone.

On the flip-side, a rebound from the neck line may cause EUR/CHF to rally towards 1.1190, although; the weekly resistance level marked on the chart needs to be monitored.

Written By: Mahmoud Alkudsi

Please feel free to contact me on Twitter: @Malkudsi

2019-07-11 10:03:00

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Nikkei 225 Rallies with Nintendo Stock, S&P 500 Momentum Fading?

Posted: 10 Jul 2019 10:46 PM PDT

Asia Pacific Markets Talking Points

Nikkei 225 higher, Nintendo shares supported by Switch Lite announcement
Dovish Powell, FOMC minutes kept sinking the US Dollar as stocks gained
S&P 500 upside momentum fading before US CPI and Fed Chair testimony

Find out what retail traders' equities buy and sell decisions say about the coming price trend!

Stocks

Equities traded higher during Thursday's Asia Pacific trading session, building on the upside momentum from the prior Wall Street trading session. There, testimony from Fed Chair Jerome Powell and the latest FOMC meeting minutes reinforced the case for the first interest rate cut since 2008.

Prospects of cheaper credit conditions from the world's largest economy helped send the Nikkei 225 0.4 percent to the upside. Japanese gaming giant Nintendo saw shares soar (+3.85%) in the aftermath of the company announcing an updated version of their latest portable console, the Switch Lite.

Elsewhere, Australia's benchmark index, the ASX 200, climbed over 0.5 percent heading into the close. It was boosted by solid performance in materials (+0.8%). In China, the Shanghai Composite aimed more than 0.3 percent to the upside.

FX

At first glance, foreign exchange markets appeared to show signs of risk aversion as both the Japanese Yen and Swiss Franc rallied. The US Dollar understandably continued depreciating as the likelihood of lower rates works against its appeal from a yield perspective as traders lock in local government bond yields.

Yet, this could have been a balancing out of FX, via carry unwind, as investors rebalance their portfolios out of currencies and into increasingly-attractive stocks that are propped up by central bank easing bets. Anti-fiat gold prices, as a non-interest bearing asset, extended gains from the US trading session.

The Remaining 24 Hours

Mr Powell's testimony to Congress continues into a second day as the next headline inflation data crosses the wires. Both risk sinking USD lower, for the time being, as markets anticipate a more-dovish Fed on increasingly-disappointing data.

Yet, the propensity for equities to continue rallying on relatively dismal conditions, especially as trade wars on other fronts (EU, India) heat up, could be running out. Do not discount what a premium for liquidity could do for the US Dollar.

S&P 500 Technical Analysis

S&P 500 futures are attempting to clear resistance at 3006, the record high set last week. However, the presence of negative RSI divergence shows fading momentum to the upside. At times, this can precede a turn lower or increase the chance of consolidation.

S&P 500 Futures Daily Chart

Charts Created in TradingView

FX Trading Resources

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

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

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2019-07-11 05:00:00

USDJPY and Gold Show What Fed Support Can Truly Offer Market

Posted: 10 Jul 2019 10:08 PM PDT

Fed Talking Points:

Fed Chairman Powell’s first day of testimony and the FOMC minutes seemed to reinforce the view that the Fed is preparing for rate cuts
A lower yield naturally weighs the Dollar while risk trends should also receive a speculative boost, but how strong are these drives
Risk trends may seem buoyant through a measure like the S&P 500 but USDJPY and Gold indicate there are serious caveats in sentiment

See how retail traders are positioning in EURUSD, USDCHF, USDJPY and other Dollar-based majorsusingthe DailyFX speculative positioning data on the sentiment page.

The Fed Signals Its Support

Between Fed Chairman Jerome Powell’s testimony before the House and the minutes from the Federal Reserve’s last monetary policy meeting, it was clear that the world’s largest central bank was signaling to the markets its intent to move forward after its dovish course correction. In the central bank leader’s remarks, he would say that this past Friday’s NFPs changed nothing in the group’s assessment of trouble ahead and that the so-called progress on trade discussions with China offered little assurance to negate the necessity of external support. In the minutes, reference to “many” seeing a stronger case for a cut seemed to deepen conviction that a rate cut is impending. The probability of a July cut already at 100 percent according to Fed Fund futures is now seen as increasingly warranting a steeper first cut while the outlook for a third cut (or 75 bps) through year’s end is on the rise again.

Responsive Measures Offer Immediate Risk Trend Support

There are various implications to the world’s largest central bank committing to a reversal in its course to normalize from an extreme accommodation built up this past decade. One of the most prominent considerations is what this does for risk trends. It is not a coincidence that speculative assets have soared since the Great Financial Crisis ended – particulary US indices – despite a flagging backdrop for economic performance. The familiarity of a charge in risk trends owing to a source of external support is a comforting one to many. And yet, it is also increasingly unreliable. While indices like the S&P 500 and Dow jumped Wednesday in response to the news, there remains a distinctly scattered performance among the many risk-leaning assets. The support of a stretched resource like monetary policy authorities affords far less conviction now than it has in years past.

Chart of S&P 500 and Opening Gaps (Daily)

USDJPY and Gold Show What Fed Support Can Truly Offer Market

USDJPY Signals that Dollar Pain Was More Significant than Risk Appetite

As we look to gauge the impact that the Fed’s policy influence can reasonably exert over the market, there are two principle elements for which we can account. For the competitive appeal of the US Dollar relative to its major counterparts for yield (the equivalency of a dividend in the FX world), the most liquid currency holds a significant premium to the most liquid counterparts. There is little doubt that a diminished rate forecast will hurt the currency’s standing for yield advantage. Another critical aspect of a reversal in policy bearing is the implications for general risk trends. Recent history has paid considerable premium to dovish monetary policy adjustments, but there are certainly questions as to how much further lift can be leveraged from increasingly ineffective efforts. A good comparison as to which wind carries the greatest influence is USDJPY’s performance. As risk trends improve, all Yen pairs (as carry representatives) tend to advance. Yet, as yield potential from the Fed diminishes, the Dollar drops. How did the USDJPY fair this past session? It posted an abrupt reversal from 109.

Chart of USDJPY (Daily)

USDJPY and Gold Show What Fed Support Can Truly Offer Market

Gold – A Safe Haven – Reflects the Real Balance for the Financial System

Another asset that drills down into the particulars of the financial market’s response to both the Fed’s intent and the general implications of global monetary policy on sentiment is gold. The precious metal is typically considered a safe haven. If we wanted to look at its historical performance more closely, severe capital market distress and/or inflation pressures tend to amplify its appeal. Yet, there is a new facet that has come to prominence over the past decade for the commodity and it is the commodity’s appeal as a harbor to financial stability that tends to devalue sovereign assets such as currencies or government bonds. We are leaning more heavily on that latter role nowadays. Therefore, it is very telling this past session that gold charged higher this past session to put yet another test to the 1420/40 resistance that we have established on a wide range this past month. We focus on key measures to this week’s top theme and event risk in today’s Quick Take video.

Chart of Gold (Daily)

USDJPY and Gold Show What Fed Support Can Truly Offer Market

If you want to download my Manic-Crisis calendar, you can find the updated file here.

2019-07-11 04:20:00

Dollar Drop More Reliable than S&P 500 Record High as Fed Readies Rate Cut

Posted: 10 Jul 2019 08:46 PM PDT

Federal Reserve Talking Points:

Jerome Powell downplayed the June employment figures and trade war hopes while FOMC minutes show growing willingness for Fed cuts
A bullish run of UK data wasn’t the outcome for Pound response, nor was the Bank of Canada’s neutral bearing
Thursday top event risk keeps a focus on monetary policy, but trade wars and stuttering global growth signals are more capable

What do the DailyFX Analysts expect from the Dollar, Euro, Equities, Oil and more through the 3Q 2019? Download forecasts for these assets and more with technical and fundamental insight from the DailyFX Trading Guides page.

The Fed Reinforces Its Readiness to Cut

In the host of active themes that share control over the global markets, monetary policy as a stop gap for faltering growth proved its present position as top influence this past session. While there were a number of events that would contribute to this systemic matrix this past session, it was the Fed’s intentions that held the greatest possible sway over speculative appetites. And, the updates from the central bank’s course would not disappoint. In the first day of his testimony to Congress, Fed Chairman Jerome Powell responded to a range of questions from the pressure applied upon him from President Donald Trump to his belief of where the natural rate of unemployment stood. Traders would sift through all of it to register specifically what would reinforce or reverse the market’s growing expectations for impending and eventually-deep rate cuts from the previously hawkish central bank. Two points stood out in particular: his suggestion that the robust June employment figures doesn’t change their assessment which has seeded anticipation of easing and that any recent ‘improvement’ in trade wars was not genuine enough to brighten their outlook over external risks.

The other noteworthy US monetary policy event this past session was the FOMC meeting minutes. Though the group was fairly thorough last month between Powell’s presser and the SEP after the meeting, the detailed insights showing “many” Fed members saw a stronger case for a rate cut offered a tangible update to suggest earlier rate cuts. We can see that was definitely reflected in the markets as Fed Fund futures already certain of a cut at the end of this month ratcheted the anticipation even higher – to a larger cut. As high as conviction may be, the reach of this external support is questionable. It was Bank of Canada (BOC) Governor Stephen Poloz that said after his central bank held rates unchanged that monetary policy cannot weather further troubles born from threats like global trade wars. That makes the upcoming combination of a second day of Fed Chairman congressional grilling and the US CPI inflation update a more nuanced event risk. The more support the Fed seems to offer without tangible market payoff, the greater the risk of a collapse under the fundamental realization that the world’s central banks no longer support an effective safety net.

A Dollar Take Versus the Risk View

In response to the headlines this past session, there was a remarkable response from key assets. However, it is the collective performance of these disparate markets that offers unique insight into the shape of the financial system’s landscape. For a baseline assessment of the ‘risk’ impact from the Fed’s capitulation, I like to refer to the US indices. While most assets with a dependency on sentiment advanced for the session, it is US indices that carry the banner for unrestrained speculative appetite. The S&P 500 and Dow would both charge to record highs intraday Wednesday. Yet, there was a notable lack of enthusiasm after the initial shove which now seems par for course when it comes to risk runs. Meanwhile, global shares and emerging markets found no further progress after the initial gaps higher while carry trade and global government bond yields outright struggled. This is not at all reassuring for even a coast higher in sentiment, and traders should be wary about a hands-off risk chase.

Chart of S&P 500 and Aggregate 10-Year Yield of US, UK, German, Japanese Gov't Bonds (Daily)

Dollar Drop More Reliable than S&P 500 Record High as Fed Readies Rate Cut

As for the Dollar, the response from the currency was not nearly as complicated. The benchmark dropped broadly on the day. We can chalk this up to the Greenback’s bleeding its carry advantage over ever other major counterpart, but the currency neither posted an exceptional charge when rate hike expectations were still accelerating, nor has it dropped dramatically in recent weeks when the forecast has already flipped to fast-paced rate cuts. Merely adding weight to what the market already expects does not seem a reliable source for a resurgent trend. It was particularly notable this past session that both USDJPY dropped and Gold rallied however. The former pits two competing issues – Dollar yield loss versus positive risk response – head-to-head while the latter is a safe haven with a particular financial-stability contingent. If the Greenback continues to slide, the commodity may very well be best positioned to take advantage, but a cross that doesn’t compete for influence (like EURUSD) may require less systemic buy-in.

Chart of DXY Dollar Index and Expected Fed Rate Cuts Through December (Daily)

Dollar Drop More Reliable than S&P 500 Record High as Fed Readies Rate Cut

Trade Wars and Recession Fears Rumble in the Background

While the focus Wednesday was monetary policy – and that is likely to remain the case over the upcoming session – the other overpowering themes were still percolating in the background. On trade wars, we didn’t have any further provocations by the White House to pursue tariffs on Europe to punish in the airplane manufacturer dispute; but attention did fix on the US-China relation. On the one hand, there were reports that the US held silent on the situation in Hong Kong in exchange for trade negotiation points; while on the other, China is clearly upset over the United States plan to sell weapons to Taiwan. That said, the truly troubling note this past session were reports that Trump had instructed aides to investigate ways of devaluing the Dollar. While not official, this is readily believable and enormously concerning for financial stability.

And, though it may seem utterly prosaic, the concern over a stalled global economy continues to eat away at the foundation of an otherwise impressive speculative charge. The Chinese Finance Minister, Liu Kun, stated his believe that the world’s largest economy would hold to its forecasted range of 6.0 to 6.5 percent growth. We will see whether the official 2Q GPD figures due Monday fulfill those expectations. In Europe, two companies considered bellwethers for economic health – BASF in Germany and PageGroup in the UK – have issued profit warnings, citing troubled growth as a key source of their ills. We’ll see if this same struggle is present in the United States with the 2Q earnings season beginning in earnest next week (with reports from Microsoft, large banks, Netflix, Johnson & Johnson and more).

Pound and Loonie Event Risk Doesn’t Offer the Market-Moving Outcome

Outside the systemic and its representatives, there were a few interesting moves to note regionally through the FX market. The Sterling jumped into an important run of May economic data. Ultimately, the statistics were consistent and supportive of the economy. That said, they did not provide motivation for the currency. UK May GDP grew 0.3 percent in line with expectations (after -0.4 percent contraction), construction grew a faster 0.6 percent than expected, industrial production expansion was solid at 1.4 percent and the trade deficit closed further than expected to 11.52 billion pounds. Everything seemed to line up for the Sterling, but that is not what the market would move on. What is truly concerning in the UK and for its markets is the state of Brexit following the government shuffle, and this carries a very clear, negative connotation. So, while weak data could have accelerated a slide, improved data would struggle to mount a recovery.

Chart of EURGBP (Daily)

Dollar Drop More Reliable than S&P 500 Record High as Fed Readies Rate Cut

The Canadian Dollar fell into a similar deadzone. The Loonie was primed for the Bank of Canada (BOC) rate decision, but expectations were set low. There was little expectation that the group was planning any changes to its policy stance, and they did not disappoint on that front. Ultimately, the insights to follow the steady bearing offered little to leverage for speculative advantage – whether bullish or bearish. The Loonie floundered on the day, which meant USDCAD would not trigger its inverse head-and-shoulders pattern nor would GBPCAD be able to spur reversal to its very overstretched position. Keep tabs on both, however, as fundamental winds rise and fall. We discuss all of this and more in today’s Trading Video.

Chart of USDCAD (4-Hour)

Dollar Drop More Reliable than S&P 500 Record High as Fed Readies Rate Cut

If you want to download my Manic-Crisis calendar, you can find the updated file here.

2019-07-11 03:27:00

Gold Prices Eye 2019 High Following Dovish Fed Testimony

Posted: 10 Jul 2019 05:38 PM PDT

Gold Price Talking Points

Gold quickly pares the decline from earlier this week as Federal Reserve officials show a greater willingness to switch gears, and the price of bullion may exhibit a more bullish behavior over the coming days as the Relative Strength Index (RSI) pushes back towards overbought territory.

Gold Prices Eye 2019 High Following Dovish Fed Testimony

Gold looks poised to test the 2019-high ($1439) as Fed Chairman Jerome Powell strikes a dovish tone in front of Congress, and it seems as though the Federal Open Market Committee (FOMC) is on track to insulate the US economy as "many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened."

The 224K expansion in US Non-Farm Payrolls (NFP) appears to have done little to influence the monetary policy outlook as Chairman Powell insists that "there is a risk that weak inflation will be even more persistent than we currently anticipate," and the comments suggest the central bank will continue to alter the forward guidance over the coming months as "uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook."

It remains to be seen if the Fed will reestablish a rate easing cycle as St. Louis Fed President James Bullard, a 2019-voting member on the FOMC, continues to endorse an "insurance cut," with the official arguing that the central bank was "overly preemptive" by delivering four rate hikes in 2018.

In turn, Fed Fund futures still highlight a 100% probability for at least a 25bp rate cut on July 31, and Chairman Powell and Co. may continue to change their tune over the coming months as President Donald Trump tweets "our most difficult problem is not our competitors, it is the Federal Reserve."

With that said, gold prices may continue to benefit from the current environment amid the threat of a policy error, and the price of bullion may exhibit a more bullish behavior over the remainder of the year as market participants look for an alternative to fiat currencies.

Gold Price Daily Chart

The broader outlook for gold is no longer mired by a head-and-shoulders formation as both price and the Relative Strength Index (RSI) break out of the bearish trends from earlier this year.
Moreover, the recent pullback in bullion appears to have run its course as the Fibonacci overlap around $1380 (100% expansion) to $1385 (78.6% expansion) offers support, with the topside targets coming back on the radar as the price of gold carves a fresh series of higher highs and lows.
The move above the $1418 (100% expansion) to $1422 (23.6% expansion) region may spur a more meaningful run at the $1444 (161.8% expansion) to $1448 (382.% retracement) area, with the next topside hurdle coming in around $1457 (100% expansion).
Will keep a close eye on the RSI as it continues to track the upward trend from earlier this year, with the oscillator working its way back towards overbought territory; move above 70 raises the risk for a larger advance in gold as the bullish momentum gathers pace.

For more in-depth analysis, check out the 3Q 2019 Forecast for Gold

Additional Trading Resources

Are you looking to improve your trading approach? Review the 'Traits of a Successful Trader' series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

— Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.

2019-07-11 00:30:00

Crude Oil Prices Eye April High, Fed Ready for First Cut Since 2008?

Posted: 10 Jul 2019 04:18 PM PDT

Asia Pacific Market Open Talking Points

Fed's Powell rekindled 50 basis point July rate cut bets as US Dollar sunk
Crude oil achieved meaningful breakout, opening the door to April highs?
AUD/USD, NZD/USD may rally ahead. But, trade war fears are brewing

Not sure where Crude Oil is heading next? We recently released the third quarter Crude Oil fundamental and technical forecast!

Fed Chair Jerome Powell Lifts Sentiment as Crude Oil Clears Key Resistance

Cautious odds of a 50 basis point cut from the Federal Reserve this month are back on the table after testimony from Chair Jerome Powell to Congress, and the impact on financial markets was noted. Such aggressive easing bets started getting priced out in the aftermath of the G20 Summit where we saw a US-China trade truce. This was compounded by last week's better-than-expected US non-farm payrolls report.

Comments from Mr Powell to rekindle those expectations were more members seeing the case for easier policy and uncertainties dimming the outlook. This was further bolstered by the FOMC minutes from June's interest rate announcement, paving the way for the first cut since 2008. This meant a disappointing session for the US Dollar as local bond yields tumbled and the S&P 500 rallied alongside anti-fiat gold prices.

While the latter two failed to achieve meaningful breakouts in their uptrends, one asset did and that was sentiment-linked crude oil. In addition to increasingly-dovish Fed bets, which could "fuel" demand for the commodity down the road, the commodity also had the latest inventory report to look forward to from the EIA. Stockpiles unexpectedly shrunk 9.5m b/d, adding to supply concerns as US-Iran tensions heat up.

Crude Oil Technical Analysis

Crude oil prices closed above a falling trend line going back to late April, marked as the blue line on the chart below. Prices also ended beyond the late June highs, closing at the highest since May. With technical analysis, confirmation is key, and a push above next resistance at 60.26 may open the door to revisiting April highs. Meanwhile, rising support may keep the uptrend intact, which is the red-dashed line below.

Crude Oil Daily Chart

*Charts Created in TradingView

Thursday's Asia Pacific Trading Session

However, S&P 500 futures are little changed as we head into Thursday, which could limit gains in Asia Pacific markets ahead. The USD could continue succumbing to selling pressure in the near-term as the immediate focus is on easing from the central bank that oversees the world's largest economy, and that will likely resonate into global financial markets. The AUD/USD and NZD/USD may rally in the near-term.

Down the road, the prospects for sentiment are not as straight forward. For one thing, a reversal in the central bank's hiking cycle speaks to growing concerns about the health and vigor of the world's largest economy. Meanwhile, as one trade war pauses, more seem to keep opening on other fronts such as in Europe and India. The USTR is investigating French plans to tax tech giants, this may lead to sanctions and tariffs.

FX Trading Resources

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

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

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2019-07-10 23:00:00

Index Crosses 3,000 & Delta (DAL) Earnings Ahead

Posted: 10 Jul 2019 02:29 PM PDT

S&P 500 Outlook:

The S&P 500 tagged 3,000 for the first time ever as Fed Chairman Powell signals coming rate cut
With Fed commentary in the rearview, market focus will shift to earnings season with DAL
Read about earnings season and how it can impact the major stock indices

S&P 500 Outlook: Index Crosses 3,000 & Delta (DAL) Earnings Ahead

The S&P 500 crossed the 3,000 mark for the first time ever on Wednesday as Federal Reserve Chairman Jerome Powell signaled a willingness to cut the Federal Funds rate. The prospect of lower borrowing costs has spurred optimism that corporate earnings will rebound and help to extend the current period of economic expansion. With Wednesday's commentary and trade wars on hold, fundamental themes have paved the way for fresh all-time highs.

S&P 500 Price Chart: Daily Time Frame (October 2018 – July 2019) (Chart 1)

At present, the path of least resistance for the S&P 500 is higher as the Index enjoys nearby support around prior peaks at 2,954. Similarly, the Dow Jones enjoys open-air above as the Industrial Average looks to capitalize on strength of its own. With FOMC minutes in the rearview, stock traders will now look to the arrival of earnings season next week when the big banks and some FANG members look to report their quarterly results. In the meantime, Delta Airlines (DAL) is slated to report their earnings before Thursday trading.

Delta DAL earnings revenue

Source: Bloomberg

As the only major American airline not affected by the grounding of Boeing 737 Max models, Delta has already exhibited strength relative to its industry peers. That said, earnings for the quarter may highlight this fact as DAL looks to skim market share from other travel providers. The price target consensus among Wall Street analysts is $67.40 – a 13% return from the current price. Further, data from Bloomberg reveals insiders have increased their holdings of the stock by 20% in the past six months.

Boeing (BA) Price Chart: Daily Time Frame (January – July) (Chart 2)

Given the stock's industry, earnings-implied volatility is understandably moderate at just 3.47%. Therefore, the implied price range in Thursday trading is just $4, from roughly $57.3 to $61.5. Over the next 20 days, volatility is heightened at 14%. Although the implied range is narrow, it encompasses the stock's all-time high and nearby support – two levels that will play an important role in the impending price action.

S&P 500 Outlook: Index Crosses 3,000 & Delta (DAL) Earnings Ahead

To the topside, Delta will look to surpass recent record highs posted in November 2018 around $61.35. In the event of an earnings beat and bullish price reaction, the level will pose resistance if DAL attempts to push beyond to fresh highs. Should $61.35 be dispatched of, it would open the door for the stock to probe street consensus at $67.40.

Delta Airlines (DAL) Price Chart: Daily Time Frame (December 2018 – July 2019) (Chart 2)

Conversely, if Delta reveals earnings beneath, or on target, support will reside at $57.87. Given Delta's current competitive advantage, expectations are likely skewed to the topside as analysts look for the airline to exploit groundings among direct competitors. For example, Southwest (LUV) operates the most 737 Max models in the United States with 34 jets, whereas DAL does not fly the model altogether. Follow @PeterHanksFX on Twitter for further commentary on DAL and other earnings previews as the season progresses.

–Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

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2019-07-10 21:05:00

Crude Oil Price Soars to 7-Week High on Fed & Supply Shock

Posted: 10 Jul 2019 01:52 PM PDT

CRUDE OIL PRICE – TALKING POINTS

Crude oil prices edged up noticeably throughout Wednesday's trading session with the commodity touching its highest level since May 23
Oil prices are benefiting from the return of risk appetite driven by dovish Fed prospects
Crude is also climbing owing to supply shock fears surrounding adverse weather in the Gulf of Mexico and lingering tension with Iran
Download the free Q3 Crude Oil Forecast from DailyFX for comprehensive fundamental and technical insight on XAUUSD

Oil prices soared well over 3% on Wednesday to close at $60.23/bbl. Bullish crude oil price action came in response to a mix of fundamental developments which look to boost demand prospects and further curb supplies. The steep ascent over the last 24 hours was initially sparked by API crude oil inventory data released yesterday which revealed a drawdown of -8.129 million barrels.

CRUDE OIL PRICE CHART: 15-MINUTE TIME FRAME (JULY 09, 2019 TO JULY 10, 2019)

Upward momentum continued when Fed Chair Jerome Powell delivered his prepared remarks for his congressional testimony. Powell reiterated the Fed's dovish position and that the central bank stands ready to "act as appropriate to sustain US economic growth." The potential that an 'insurance' rate cut by the Fed will help keep the US economy and global GDP growth on track is likely boosting oil demand prospects and crude oil prices.

CRUDE OIL PRICE CHART: DAILY TIME FRAME (DECEMBER 10, 2018 TO JULY 10, 2019)

Upside in crude oil was subsequently exacerbated by comments from US President Trump who stated that sanctions on Iran – the world's 7th largest oil producer– will soon be increased substantially. Furthermore, speculation over the adverse impact on crude oil production in the Gulf of Mexico is likely contributing to the push higher in crude oil prices as commodity traders weigh the threat that brewing Hurricane Barry poses to US oil infrastructure on the shores of New Orleans.

This push higher in crude oil prices today appears to have broken bearish downtrend technical resistance from the string of lower highs since oil topped out around $66.00/bbl back in April. Crude oil could run into another level of technical resistance, however, near the 78.6% Fibonacci retracement level of the commodity's bullish ascent from December 2018 to April 2019. Meanwhile, retail traders are growing less optimistic over crude oil price action as suggested by IG Client Sentiment data.

CRUDE OIL PRICE CHART AND CLIENT POSITIONING OVERLAY: DAILY TIME FRAME (JANUARY 11, 2019 TO JULY 10, 2019)

According to retail trader positioning data provided by IG, 56.4% of traders are net-long with the ratio of traders long to short at 1.29. Yet, the number of traders net-long is 16.5% lower relative to last week while the number of traders net-short is 13.13% higher compared to last week.

— Written by Rich Dvorak, Junior Analyst for DailyFX.com

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2019-07-10 20:40:00

USD Drops, S&P 500 Hits Record on Dovish Fed Minutes, Powell Testimony

Posted: 10 Jul 2019 01:16 PM PDT

Fed Chair Powell Testimony and FOMC Minutes – Talking Points

The S&P 500 Index hit an all-time high today as Powell testifies before congress, prefacing the FOMC minutes showing a continued dovish tone from Fed members
Members saw a strengthening case for rate cuts in the near future, although several members remain hawkish
Check out the US Dollar Q3 forecast

The markets are receiving plenty of information to digest today with the Federal Reserve releasing minutes from its June FOMC meeting which follows commentary from Chair Powell testified before Congress this morning. The minutes show FOMC member concern over soft economic data such as the weak jobs report from April, weakening indicators for business confidence and spending, decreased manufacturing activity and the ongoing trade tensions – mainly between China and the US. However, not all members are completely convinced that rate cuts are necessary at this time as several members voiced that they did not see a strong case for rate cuts when the Fed met last this past June.

S&P 500 Index vs Gold Price Chart

Today's minutes were prefaced by Jerome Powell testifying in front of the House's Financial Services Committee this morning as Powell answered questions from members of congress on the Federal Reserves current outlook for the economy. US equity markets got off to a bullish start to the day as the S&P 500 Index moved to make an all-time high after hitting the 3,000 mark – a remarkable level that traders have been optimistically eyeing over the past months. Powell's dovish comments also helped propel gold prices today with XAUUSD hitting $1,400.

S&P 500 Index and DXY US Dollar Index Price Chart

The US Dollar dropped as Powell noted crosscurrents in the economy, dimminng the view of the Federal Reserve and increasing the probability of future rate cuts. The main concern being the ongoing trade tensions between the US and China, however Powell said that some concerns would be alleviated if the USMCA trade agreement is passed, which happens to be an effort that will be address by congress soon.

The DXY US Dollar Index dropped from $97.50 this morning to $97.09 into the afternoon trading session. The market is pricing in a 100% chance of a 25bps cut for this month's Fed meeting, as well as a 28% chance for a 50bps cut.

Fed Rate Cut Implied Probabilities

Chart prepared by Chris Vecchio

–Written by Thomas Westwater, Intern Analyst for DailyFX.com

Contact and follow Thomas on Twitter @FxWestwater

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you're looking to improve your trading approach, check out Traits of Successful Traders. And if you're looking for an introductory primer to the Forex market, check out our New to FX Guide.

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2019-07-10 19:38:00

Platinum Price Outlook: Breaking above The Weekly Resistance

Posted: 10 Jul 2019 08:50 AM PDT

Platinum Price Forecast

Platinum charts and analysis.
Platinum price action.

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Platinum Price – Correcting Higher

On Friday, Platinum rebounded from $804.5 after breaking below the neckline of the head and shoulders pattern discussed in our last update at $829.8.

Alongside, the Relative Strength Index (RSI) crossed below 50 then remained flat reflecting the weakness of the bearish momentum. Today, the oscillator crossed above 50 indicating to the end of the bearish momentum and a possible bullish move.

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Platinum DAILY PRICE CHART (DEC 1, 2017 – JUL 10, 2019) Zoomed Out

Platinum DAILY PRICE CHART (Apr 26 – JUL 10, 2019) Zoomed In

Looking at the daily chart we notice at the start of this week, Platinum failed to move higher to the trading zone $820.0 – $837.0. Today, the price pushed higher breaking above the low end of this zone.

Therefore, a close above the low end may cause a rally towards the high end, nonetheless, the weekly resistances marked on the chart need to be kept in focus. Further close above the high end could see the price even higher towards $852.0. The weekly resistance levels mentioned on the chart would be worth monitoring in this scenario.

In turn, a failure in closing above the low end of the aforementioned trading zone might embolden the sellers to send the price towards $804.0, and if Platinum closes below this level the price might head towards $796.0, although; the weekly resistance level highlighted on the chart should be considered.

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Platinum Four-HOUR PRICE CHART (June 19 – JUL 10, 2019)

Looking at the four-hour chart we notice on yesterday Platinum stopped its downside move carving out a higher low at $806.3. Today, the price rallied after breaking above the July 8 high at $821.0.

Hence, a break above $831.7 may send the price towards $837.0, although; the weekly resistance level underlined on the chart needs to be monitored. See the chart for more key levels if the rally continues above mentioned levels.

On the flip-side, a break below $810.0 could press the price towards the July 5 low at $804.5, however; yesterday's low mentioned above needs to be watched closely. See the chart for the next significant support levels the sellers would encounter if the price continues to decline.

Written By: Mahmoud Alkudsi

Please feel free to contact me on Twitter: @Malkudsi

2019-07-10 15:00:00