official Market Update by Solidecn.com

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AUDUSD: consolidation after reaching local highs in August

The AUDUSD pair shows ambiguous trading dynamics during the Asian session, consolidating near 0.6830. Investors are trying to predict the situation in the market after many currencies showed a confident upward rally against the US dollar at the end of last week. So, for only one trading session on Friday, September 9, the Australian dollar recovered to the local highs of August 31.

At the same time, traders were disappointed by the publication of poor macroeconomic statistics from China, where, in particular, a decrease in inflation in August by 0.1% from 0.5% last month was recorded, while the growth rate adjusted from 2.7% to 2.5% YoY with preliminary estimates of experts at 2.8%, which is a signal of a slowdown in the national economy.

Following the publication by the analytical company Impact Economics and Policy of information about the inflated costs of post-COVID rehabilitation of citizens in the amount of 3.6B US dollars, the Australian authorities launched a parliamentary inquiry to determine the exact number of people who need medical care after an infection. In particular, according to the information provided, taking into account weekly expenses, which amount to about 100.0M Australian dollars, the losses of the national budget for the year amount to 5.2B Australian dollars. As a result, the authorities will submit a report that will collect expropriated treatments and determine whether those who have been ill will be able to receive payments from the state.

On Thursday, Australian investors are focused on the report on the national labor market for August, and analysts predict an increase in employment by 50.0K after falling by 40.9K last month.

On the daily chart, Bollinger bands reverse in the horizontal plane: the price range is narrowing from above, reflecting the ambiguous nature of trading in the short term. MACD is growing, maintaining a relatively strong buy signal and above the signal line. Stochastic shows a confident upward direction, but at the moment, it is rapidly approaching its highs, indicating that the instrument may become overbought in the ultra-short term.

Resistance levels: 0.6853, 0.69, 0.695, 0.7 | Support levels: 0.680, 0.675, 0.67, 0.665
 

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The Home Depot

On the daily chart, the correction is developing within a wide corridor with dynamic boundaries of 350 – 290.

On the four-hour chart, after reaching the support line, the quotes reversed upwards, breaking the initial correction level of 23.6% Fibonacci around 298. Holding the trading instrument above it is a key factor for the continuation of the upward trend, the target of which is the Fibonacci 61.8% retracement level at 315.

Technical indicators are weakening the sell signal: the Alligator indicator's EMA oscillation range narrows actively, and the histogram of the AO oscillator, trading in the sell zone, forms new rising bars.
 

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USDCAD - Candlestick analysis

H4
On the four-hour chart, under the resistance level of 1.3214, there is the formation of Hanging man and Shooting star reversal models of candlestick analysis, as well as the appearance of the Three black crows trend continuation pattern at 1.302. At the opening of the trading session, the “bulls” tried unsuccessfully to restore their positions, which is confirmed by the “Bearish” belt hold figure. However, in the current situation, the continuation of the downward dynamics of the asset to the support level of 1.2960 is likely, the breakdown of which allows the “bears” to head lower to the area of 1.2661− 1.2322. If the buyers hold the support level of 1.2960 and the price reverses upwards, the growth to the resistance level of 1.3214 is expected, the breakout of which will become a catalyst for the movement to the area of 1.3412−1.3729.

D1
On the daily chart, under the resistance level of 1.3214, a series of Shooting star and Hanging man reversal candlestick patterns are formed, which signal that the price has reached the local high and the market is under the control of the “bears.” Also, the Three black crows downtrend continuation model has formed, and in this situation, most likely, a further decline in the asset in the range of 1.2960–1.2322 is expected.

Support levels: 1.2960, 1.2661, 1.2322 | Resistance levels: 1.3214, 1.3412, 1.3729
 

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USDCHF - Franc seized the initiative in the pair

At the end of last week, unemployment data was published: the figure has been holding at 2.0% for the third consecutive month, which is the average for Switzerland, recorded even before the coronavirus pandemic. The manufacturing sector corrected by –0.5% after seven quarters of growth, primarily due to falling exports in the chemical and pharmaceutical industries. Analysts suggest that in August, the producer price index will add 0.1%, significantly yielding to the early summer indicator of 1.0–1.2%, while the value may continue to correct and consolidate below 6.3% YoY, reflecting the second month of negative dynamics in a row.

 

Despite achieving 108.5 points in the USD Index, the US dollar is trading above the average value at the beginning of the year. As for the local dynamics, it will completely depend on tomorrow's publication of data on consumer prices. Analysts assume that the energy component of inflation will weaken its influence, and the indicator will drop from 8.5% to 8.1%, while the core value, which does not consider fuel and food prices, will adjust from 5.9% to 6.1%.

 

 

On the daily chart, the price is trading within a downwards corridor, and technical indicators are already ready for the next reversal: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram, being in the buying zone, is ready to cross the transition level.

 

Support levels: 0.9539, 0.9412 | Resistance levels: 0.9620, 0.977

 

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Dow Jones - Dynamics in the bond market hinder the growth of the index

Due to the lack of fundamental news, the focus of investors is still on the message from the manufacturer of construction and mining equipment Caterpillar Inc. on the settlement of a dispute with the US Internal Revenue Service relating to the payment of fees totaling 2.4B dollars by the Swedish division of the company. The proceedings lasted more than a year, and investors will finally be able not to fear that the issuer's debt burden will increase since all penalties have now been lifted.

 

Nevertheless, the key factor influencing the quotes of the Dow Jones index will soon be the dynamics in the bond market. Already, auctions will be held for the placement of three-month, six-month, three-year, and ten-year treasury notes and bills. Given the current high bond prices, there is no doubt that rates in all categories will significantly exceed previous performance. Thus, the last placement rate on ten-year notes was 2.755%, and now they are traded above 3.34%. The growth of yield is an unconditional negative signal for the stock market, rapidly losing its investment attractiveness.

 

 

The trading instrument shows corrective dynamics without a specific direction. Technical indicators continue to hold a sell signal, which periodically weakens: the Alligator indicator's EMA oscillation range remains quite wide, and the AO oscillator histogram forms new rising bars in the sell zone.

 

Support levels: 31813, 30990 | Resistance levels: 32557, 33300

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USDCHF - Candlestick analysis

 

H4

On the four-hour chart, a long-term downtrend is recorded. At the moment, above the level of 0.9568, a "bullish" Hammer pattern is being formed, which signals a likely reversal of quotes, and two more reversal patterns have appeared: the Inverted Hammer and the Bullish Engulfing one. Quotes of the asset are consolidating above the key support level of 0.9485, and the pressure of the "bears" is still visible. However, if the "bulls" manage to stay above this level, then, most likely, it will be possible to observe a small uptrend to the resistance level of 0.9568, after which the correction will take a reversal character, and the price will continue to recover higher to the area of 0.9694–0.9840. If the buyers fail to hold the key support level, one should expect an increase in negative dynamics to the level of 0.9222.

 

 

D1

The daily chart shows the formation of the Three Black Crows trend continuation pattern, which indicates strong pressure on the price from sellers. In the current situation, a short upward correction to the level of 0.9568 and a further reversal of the price back to the support level of 0.9485 is possible, the overcoming of which will allow the "bears" to go lower to the range of 0.9366 – 0.9222.

 

Support levels: 0.9485, 0.9366, 0.9222 | Resistance levels: 0.9568, 0.9694, 0.984

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Shares of Pfizer, the largest US pharmaceutical company, are trading around 48. On the daily chart, a global corrective trend is forming, and the price is clamped within the Triangle pattern with dynamic boundaries of 45 – 51.

On the four-hour chart, it is seen that the local decline ended with the support line at 45, after which a reversal was formed, and the quotes of the trading instrument are heading towards the resistance line at 50.3. Taking into account the lengths of local waves, the moment of the pattern implementation will not come soon, and the asset is expected to decline after the end of the current upward impulse.

At the moment, fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram is forming up bars in the sell zone.
 

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NZDUSD - New Zealand food prices hit a 13-year high

Today, Statistics New Zealand (Stats NZ) released a report on food prices, which rose 8.3% in August, reflecting the biggest correction since July 2009. Most of all, vegetables and fruits went up in price, adding 15%, the cost of grocery sets increased by 8.7%, fish and poultry – by 7.6%, restaurant dishes – by 6.5%, and prices for soft drinks rose by 4.1%. %. The negative dynamics are primarily due to disruptions in supply chains caused by the COVID-19 pandemic, the development of the energy crisis, and the rise in the cost of transport services. Thus, inflation in August exceeded the previous month by 1.1%, confirming the slowdown in the national economy.

The US currency fell below 108.000 in the USD Index. Markets are awaiting the publication of data on consumer prices in the US for August: analysts suggest that the dynamics will be negative at –0.1% MoM and slow down to 8.1% YoY from 8.5% earlier. However, the Core figure, which excludes fuel and food prices, could rise by 0.3% MoM, reflected in an increase to 6.1% YoY from 5.9% a month earlier.

The trading instrument is moving within the global downtrend, away from the year's low. Technical indicators maintain a weakening sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram forms upward bars in the sell zone.

Resistance levels: 0.6194, 0.6330 | Support levels: 0.6096, 0.6000
 

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AUDUSD - The market is waiting for the US inflation data

The Australian Bureau of Statistics released its second-quarter housing stock data today, showing total home values down 162.4 billion Australian dollars for the first time since March 2020 after peaking in the previous quarter. The number of residential buildings increased by 45.2 thousand, while the average price of a house decreased by 18.9 thousand Australian dollars. In addition, the Westpac Consumer Sentiment Index showed positive results, adding 3.9% in September after falling 3.0% in the previous month.

 

The key influence on the AUD/USD pair is provided by the US dollar, which for the first time since the beginning of August corrected below 108 in the USD Index. Today at 14:30 (GMT+2) the market will follow the data on the dynamics of consumer prices for August, and analysts predict a decline in inflation to 8.1% from 8.5% a month earlier. The current indicator is also important as a key benchmark for the US Federal Reserve, which is going to continue the aggressive tightening of monetary conditions. Investors hope that positive macroeconomic statistics may act as a driver for the revision of plans to raise interest rates, which will ease the pressure on the economy, which is at risk of recession.

 

 

On the daily chart of the asset, the price is correcting upwards, moving away from the lows of the year. Technical indicators start to reverse towards growth: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram started reversing towards the transition level while forming new ascending bars.

 

Support levels: 0.6829, 0.6698 | Resistance levels: 0.6916, 0.7050

 

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XAUUSD - demand for gold is gradually increasing

Although the quotes of the trading instrument are near the annual lows, the demand for both physical gold and contracts remains high. Thus, the Australian Mint reported that in August, it sold 84.9K ounces of metal in the form of bars and coins, which is 57.4% higher than the same indicator last year and 7.2% higher than in July. The US Mint sold 857.0K ounces of gold as coins in the first eight months of this year, up 1.2% from last year, while Canada sold CAD 31.9M worth of coins in the second quarter compared to 24.8M Canadian dollars a year earlier.

 

The latest report from the US Commodity Futures Trading Commission (CFTC) last week recorded active closing of transactions by sellers, and the trend is observed in all categories: in positions backed by money, the “bulls” increased their superiority, reaching 1.294K contracts, while the “bears” there is a decrease by 4.035K. In the positions of swap dealers, buyers added 2.064K contracts, and sellers liquidated 10.359K contracts.

 

 

On the daily chart of the asset, the price moves in a downward channel, and after reaching the low of the year, it again approaches the resistance line. Technical indicators maintain a weakening sell signal: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram is forming upward bars in the sell zone.

 

Resistance levels: 1734, 1780 | Support levels: 1696, 1650

 

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CAC 40 - French stock market is recovering

The quotes of the trading instrument were supported by the decision of the European Central Bank (ECB) to raise the interest rate by a record value of 75 basis points. At the same time, not all officials of the regulator are confident in the need to continue such a "hawkish" course. Thus, ECB Governing Council member Edward Scicluna recognized the adjustment as necessary in the current economic conditions, noting that the maximum level of correction of the indicator will probably not be applied in the future. European officials intend to focus on inflation statistics and do not rule out a slowdown to 25 basis points.

The index quotes have reversed and continue to show active growth. Technical indicators are preparing to issue a new buy signal: fast EMAs on the alligator indicator are rapidly approaching the signal line, and the histogram of the AO oscillator, being in the sales zone, forms ascending bars.

Support levels: 6234, 5871 | Resistance levels: 6408, 6624

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MasterCard, shares set to continue rising

It became known that Bitso, a dynamically developing cryptocurrency exchange in Latin America, which processes up to 5% of all money transfers to Mexico, has signed an agreement with the issuer: the exchange intends to use MasterCard payment cards, which will support payment for purchases in Mexican pesos.

 

Investors expect the situation to continue developing with the decision of the International Organization for Standardization (ISO), which on Friday approved the creation of a special code for implementation in all payment systems to track suspicious arms transactions. So far, only Visa Inc. has supported the proposal, but MasterCard Inc. has already commented on the situation, saying that the corporation is carefully studying the initiative since it is focused on conducting operations within the legal framework.

 

 

The trading instrument is moving within the global Triangle pattern with dynamic boundaries of 300.00–355.00, forming a new growth wave. Technical indicators are ready to react and are reversing upwards: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram forms upward bars in the sell zone.

 

Resistance levels: 345, 363 | Support levels: 321.7, 303.3

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NZDUSD - Candlestick analysis

H4

On the four-hour chart, a Bearish Marubozu pattern formed at 0.6018. In addition, above the support level of 0.5963, a reversal "bullish" candlestick analysis model, Inverted Hammer, was formed, which signals the weakening potential of the "bears". In this situation, a scenario with an uptrend from the support level of 0.5963 to the resistance level of 0.6073 seems likely, overcoming which will allow buyers to restore the price higher to the area of 0.6258–0.6528. An alternative scenario is possible if the "bears" can overcome the support level of 0.5963, then the negative dynamics may intensify up to the level of 0.5577.

 

D1

On the daily chart, a Falling Wedge price pattern is forming, and a Hammer pattern has formed above the support level of 0.5963, signaling that the price has bottomed and is ready for a quick reversal. In turn, the Bearish Marubozu pattern, having blocked the previous five-day growth of the asset, warns of a change in market sentiment. In the current situation, a scenario is likely with the recovery of the asset's positions to the resistance level of 0.6073, overcoming which will allow the "bulls" to head higher to the range of 0.6258–0.6528.

 

Support levels: 0.5963, 0.5845, 0.5577 | Resistance levels: 0.6073, 0.6258, 0.6528

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Crude Oil - OPEC+ forecasts supported oil quotes

Against the background of the discussion of the initiative proposed by the G7 and partners to introduce a ceiling on prices for Russian oil, experts and officials are making more and more new assumptions regarding restrictions. Yesterday, Bloomberg described the situation that could arise around the transportation of energy resources through the Danish straits: the EU proposes to introduce a ban on insurance services and the provision of foreign pilots, and the Danish maritime department practically obliges all ships to take on board a local specialist, and failure to comply with these decisions can eventually completely block the passage of tankers on this segment.

As for the positive impact on quotes, it became possible after the Organization of the Petroleum Exporting Countries (OPEC+) maintained its forecasts regarding the demand for "black gold": this year, the figure is expected to be at 3.1M barrels, and in 2023 – at 2.7M barrels, while the total volume of world demand can reach 102.7M barrels, exceeding the values of 2019. According to the cartel, positive dynamics will be ensured by restoring the air transportation market and transport activity. As expected, the key importers of oil during this period may be the countries of Latin America.

On the daily chart of the asset, the price is falling within a dynamic downward channel, approaching the resistance line. Technical indicators confirm the high probability of corrective growth: fast EMAs on the Alligator indicator began to actively approach the signal line, narrowing the range of fluctuations, and the AO oscillator histogram forms ascending bars, approaching the transition level.

Resistance levels: 89.11, 94.2 | Support levels: 84.62, 80.83

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ASX 200 - Australian stock market continues to decline

The leading index of the Australian economy, the ASX 200, is trading around 6840, being under pressure from the increasing upward dynamics in the bond market: the yield of popular 10-year treasury securities adjusted to 3.657% from 3.56%, conservative 20-year ones – to 3.95% from 3.884%, and global 30-year ones – to 3.921%. from 3.856%.

In turn, the Australian labor market shows positive results, which, however, could not reverse the current trend in the asset: the total number of jobs in Q2 increased by 2.5% to 15.5M, and the number of filled vacancies — by 2.2%, amounting to 15.0M, while the share of unfilled positions reached 3.1%. The number of residents of the country occupying several jobs also increased to 898.9K, exceeding the figure of Q1 by 4.3%.

The asset is held in the ascending channel, having reached the support line. Technical indicators have reversed and given a signal for the start of active sales: the fast EMAs of the alligator indicator are below the signal line, and the histogram of the AO oscillator forms ascending bars while being deep in the sales zone.

Support levels: 6754, 6577 | Resistance levels: 6917, 7130
 

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EURTRY - The price rushed to the historical high around 18.6

Lira quotes are strengthening after President Recep Tayyip Erdogan unveiled a plan to allocate 50.0B dollars for the construction of new residential buildings and office buildings. As part of the initiative, the government will extend the mortgage repayment period to 20 years to keep monthly payments below 125.0 dollars at a minimum monthly salary of 300.0 dollars. If we pay attention to macroeconomic statistics, then according to the July report, the volume of industrial production in Turkey slowed to 2.4% from 8.8% earlier, and retail sales decreased by 0.3%, which led to a slowdown in the annual rate to 2.0 %.

 

Despite the decline of the euro against the backdrop of yesterday's report on the index of economic sentiment from ZEW to –60.7 points from –54.9 points, it is the European currency that controls the dynamics of the asset, which will not change soon due to the too large gap in the strength of the economies of the two countries. Until Friday, the current trend may continue, and at the end of the week, statistics on consumer prices in the EU will be released and judging by the strong reaction of the market to yesterday's similar data from the US, we can assume that if the indicator drops below 9.1%, the pair EUR/TRY is expected to rise again.

 

 

The trading instrument demonstrates positive dynamics as part of the next wave of global growth, approaching the all-time high around 18.6. Technical indicators keep a stable buy signal: the Alligator indicator's EMA oscillation range is directed upwards, and the histogram of the AO oscillator forms rising bars in the buying zone.

 

Resistance levels: 18.6, 19.3 | Support levels: 17.923, 17.241

 

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USDJPY - The yen continues to resist the growth of the US dollar

Japanese Finance Minister Shunichi Suzuki announced the regulator's readiness to take decisive steps to stabilize the national currency, not excluding foreign exchange interventions. At the same time, the yen has become more competitive, positively impacting the tourism industry's development, as more and more travelers want to visit Japan due to a significant reduction in the cost of such tours in dollars or euros. Locally, the yen quotes were also supported by statistics on basic orders in engineering, which rose by 5.3% in July, up by 12.8% YoY.

The trading instrument is moving within the global uptrend, having reached the maximum of the year around 145. Technical indicators do not react to local dynamics and keep a stable buy signal: the EMA fluctuation range on the Alligator indicator is directed upwards, and the AO oscillator histogram forms new bars well above the transition level.

Resistance levels: 145, 147 | Support levels: 142.08, 138.9

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Gold - Candlestick Analysis

H4

On the four-hour chart, there is the formation of an Inverted Hammer reversal pattern at the level of 1696.34; however, the attempt of the "bulls" to seize the initiative in the XAU/USD pair was unsuccessful. This can be seen in the formation of a Bearish Engulfing pattern, which showed that the market is still under the influence of sellers. The appearance of opposite figures states uncertainty, and in the current situation the price may reverse at the support level of 1682.63 and head higher to the resistance level of 1732.43, overcoming of which will open the way for the "bulls" to the zone of 1808.60–1879.88. An alternative scenario is likely if the price breaks down the support level of 1682.63, then the instrument may drop to the area of 1628.66–1551.08.

 

D1

On the daily chart, at the level of 1696.34, there is the formation of Inverted Hammer and Hammer candlestick analysis patterns, which warn of a likely price reversal upwards, and at the moment, at the level of 1717.8, another Inverted Hammer model is being built. After a long decline in the asset, the price has probably reached the bottom and is preparing for a reversal. In the current situation, it seems possible to restore quotes to the level of 1732.43, overcoming which will allow the price to strengthen to the area of 1808.6 – 1879.88.

 

Support levels: 1682.63, 1628.66, 1551.08 | Resistance levels: 1732.43, 1808.6, 1879.88

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Netflix - Technical analysis

On the daily chart, the price continues its poor upward trend, trying to reach the price gap closing level of April 20 between 250 – 330. The four-hour chart shows that the upside potential is quite high, despite the unsuccessful test of the key resistance level of 250. Soon, another attempt to reach it may follow. Otherwise, the quotes may return to the support level at 207.

Technical indicators have changed the upward signal to neutral: the Alligator indicator's EMA oscillation range has narrowed almost completely, and the histogram of the AO oscillator is forming ambiguous bars in the buying zone.
 

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Apple - technical analysis

On the daily chart, the quotes remain within the global Expanding formation pattern, forming a new downward wave, which has already almost reached its intermediate target at the 61.8% Fibonacci full retracement around 146. On the four-hour chart, it can be seen that the current movement is developing according to the classical structure. After rebounding from the initial correction of 23.6% Fibonacci around 163.8, the price continued its global decline, almost breaking the intermediate correction of 50.0% Fibonacci around 151.50, which is key support for the current trend.

Technical indicators confirm the high probability of continued decline: the Alligator indicator's EMA oscillation range expands downwards, and the histogram of the AO oscillator forms downward bars in the sell zone.