Market Brief
The quiet Asia-Pacific session has allowed equities markets to follow through after the rise in the US session. Concerns over inflation have been reduced with this week’s CPI report. Patrick Harker, President of the Federal Reserve Bank of Philadelphia, predicts that inflation in the United States will amount to around 4% in 2021, “a bit over 2%” in 2022, and “right at” 2% in the following year. Also, the markets are happier since U.S. President Joe Biden signed the bill into law that will raise the federal debt limit. Under the stipulations of the law, the federal debt ceiling has been increased by $480 billion. Fiscal flows need to pick up for the stock markets to rebound further from these levels, and therefore, the reconciliation bill needs to be passed. Several sources close to President Joe Biden’s administration told CNN’s Jake Sherman on Thursday that the White House is “near the end of its patience” when it comes to bipartisan negotiations on reconciliation. Apparently, the administration is preparing to inform both the Democrats and Republicans that “soon it will be time for negotiations to conclude.” Nancy Pelosi called on Congress to agree on the size of the reconciliation package within the next couple of days. When this is passed a more permanent deal can be negotiated on the debt ceiling and we can work out how much is going to be spent on the economy compared to last year’s $7.5 trillion.
At the London open the forex heatmap indicates that today will be a continued risk-on day and that the US dollar weakening will support the higher yielding commodity pairs and possibly the equity markets.
See real-time quotes provided by our partner.
The Japanese yen has been weakening all week and the USDJPY has risen very fast since breaking out of the descending channel.
Sentiment across retail traders on the ActivTrader platform is still heavily bearish so I am assuming these traders will be stopped out before any reversal occurs. 117.00 looks like the most probable target and resistance level to test.
See real-time quotes provided by our partner.
A weaker US dollar is helping the oil markets to continue on their bull run, even though inventories in the USA are building.
See real-time quotes provided by our partner.
And the gold markets have seen $1800/oz again, which proved to be resistance yesterday. On the daily chart above I have indicated the chart pattern most retail traders are watching. The inverse head and shoulders pattern is generally a continuation pattern to the upside. What I am noticing though is that we haven’t fully retraced the move down from mid-September and that the $1800 could be where supply comes back in. There is a theory going around that $1750 is the sweet spot for traders with unallocated gold can swap out to allocated gold to comply with the Basel3 leverage ratios. What that means is for traders to sell out of one contract they need others to buy and vice versa. Anyone that is long now will puke their position on a return to the $1700’s which means they would sell spot to the futures guys, who I reckon are still waiting down there. This market mechanics will be ended sometime early in 2022 when the bullion banks etc. have to comply with Basel3 or have enough collateral to back the unallocated gold contracts on their books.
With retail sentiment growing to the bulls side, I am even more sceptical that this is the breakout everyone has been waiting for.
See real-time quotes provided by our partner.
The EURUSD is still in a down trend and yesterday’s price action failed to close above the daily 20 ema. The indecision candle and rejection of that moving average should have resulted in a sell off today if the bears were in control. If the bulls take out yesterday’s high I think not only does the EURUSD go higher to the daily 50-ema, but we could see a bearish weekly outside candle on the DXY.
The sentiment indicator on ActivTrader for the EURUSD is unfortunately signalling that the EURUSD could also be susceptible to a near term drop.
A comprehensive website for traders, both experienced and new! Checkout our content and learn how to invest and speculate in the markets using margin traded products. Our team of educators has extensive experience and is here to help. Enjoy!
© 2020 YouTrading UK - Leaders in Trader Training.
Cookie | Duration | Description |
---|---|---|
__cfduid | 1 month | The cookie is used by cdn services like CloudFare to identify individual clients behind a shared IP address and apply security settings on a per-client basis. It does not correspond to any user ID in the web application and does not store any personally identifiable information. |
_wpfuuid | 11 years | This cookie is used by the WPForms WordPress plugin. The cookie is used to allows the paid version of the plugin to connect entries by the same user and is used for some additional features like the Form Abandonment addon. |
cf_use_ob | This cookie is set by the provider Cloudflare content delivery network. This cookie is used for determining whether it should continue serving "Always Online" until the cookie expires. | |
cookielawinfo-checbox-analytics | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics". |
cookielawinfo-checbox-functional | 11 months | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". |
cookielawinfo-checbox-others | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. |
cookielawinfo-checkbox-advertisement | 1 year | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement". |
cookielawinfo-checkbox-necessary | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary". |
cookielawinfo-checkbox-performance | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". |
viewed_cookie_policy | 11 months | The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data. |
Cookie | Duration | Description |
---|---|---|
YSC | session | This cookies is set by Youtube and is used to track the views of embedded videos. |
Cookie | Duration | Description |
---|---|---|
_ga | 2 years | This cookie is installed by Google Analytics. The cookie is used to calculate visitor, session, campaign data and keep track of site usage for the site's analytics report. The cookies store information anonymously and assign a randomly generated number to identify unique visitors. |
_gid | 1 day | This cookie is installed by Google Analytics. The cookie is used to store information of how visitors use a website and helps in creating an analytics report of how the website is doing. The data collected including the number visitors, the source where they have come from, and the pages visted in an anonymous form. |
Cookie | Duration | Description |
---|---|---|
_fbp | 3 months | This cookie is set by Facebook to deliver advertisement when they are on Facebook or a digital platform powered by Facebook advertising after visiting this website. |
fr | 3 months | The cookie is set by Facebook to show relevant advertisments to the users and measure and improve the advertisements. The cookie also tracks the behavior of the user across the web on sites that have Facebook pixel or Facebook social plugin. |
IDE | 1 year 24 days | Used by Google DoubleClick and stores information about how the user uses the website and any other advertisement before visiting the website. This is used to present users with ads that are relevant to them according to the user profile. |
test_cookie | 15 minutes | This cookie is set by doubleclick.net. The purpose of the cookie is to determine if the user's browser supports cookies. |
VISITOR_INFO1_LIVE | 5 months 27 days | This cookie is set by Youtube. Used to track the information of the embedded YouTube videos on a website. |
Cookie | Duration | Description |
---|---|---|
_gat_UA-42160853-2 | 1 minute | No description |
cf_ob_info | No description | |
CONSENT | 16 years 8 months 3 days 6 hours 2 minutes | No description |