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As U.S. crude oil prices rose 0.6%, more than 65% of the…

As U.S. crude oil prices rose 0.6%, more than 65% of the S&P 500 stocks rose, with energy companies leading the gains with a year-to-date increase of more than 75%

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Market Focus

Wall Street stocks rose slightly on Monday, continuing the recent record gains of major stock indexes. The S&P 500 Index rose 0.2%, the Dow Jones Industrial Average rose 0.3%, and the Nasdaq Index rose 0.6%. These gains pushed the three indexes above the all-time highs set on Friday. As U.S. crude oil prices rose 0.6%, more than 65% of the S&P 500 stocks rose, with energy companies leading the gains with a year-to-date increase of more than 75%. Exxon Mobil rose 1.8%. Companies that rely on consumers to directly consume goods and services constitute a large part of the index’s earnings. Tesla rose 8.5% and Starbucks rose 3.5%.

More than half of the companies in the benchmark S&P 500 index have already announced their results. Analysts expect that by the time the report is completed, overall profits will increase by 36%. Another 167 companies in the index will report their performance this week. Investors will also be paying attention to another Fed policy meeting, which will be discussing how to end the special support measures for the economy. The central bank will issue its latest statement on Wednesday. Investors will also get another update on the job market when the Bureau of Labor Statistics releases its report for October on Friday.

Main Pairs Movement

Compared to the last trading day of October, most currency pairs got some respite on Monday. The benchmark 10-year U.S. Treasury bond yield is trading sideways at around 1.5%, but investors are still concerned about the flattening yield curve.

The EUR/USD faced heavy bearish pressure last Friday, erasing all gains after the European Central Bank (ECB) meeting on Thursday. On Monday, the currency pair finally found support near the 2021 low of early October’s 1.1524 level, and rebounded by about 0.58%, breaking through the 1.16000 level.

Pressured by the renewed concerns about Brexit and the overall strength of the U.S. dollar, Cable was trading around 1.3660, the lowest level since mid-October.

Technical Analysis

EURUSD (4- Hour Chart)

The EUR/USD pair advanced on Monday, ending its slide that began last Friday. The pair was trading lower in the early Asian session and dropped to a daily low under the 1.155 area. But the bearish momentum didn’t persist as the pair rebounded back above the 1.157 level during the European session. The recent strength witnessed in the EUR/USD is mainly due to a weaker US dollar across the board, as the risk-on market sentiment has put some pressure on the safe-haven US dollar and assisted the EUR/USD pair to move higher.

From a technical perspective, the RSI indicator is at 44 as of writing, suggesting tepid bear movement ahead. But for the MACD indicator, the negative histogram has started to diminish, which indicates a possible upward trend for the pair. If we take a look at the Bollinger Bands, the price has risen from the lower band after touching it, so the price might move up toward the moving average, which means that the bullish momentum is likely to persist. In conclusion, we think that the market will be bullish as long as the 1.1546 support holds. The pair is now heading to test the 1.1624 resistance line.

Resistance: 1.1624, 1.1669, 1.1692

Support: 1.1546, 1.1524

AUDUSD (4- Hour Chart)

AUD/USD advanced on Monday, attracting some dip-buying and trading around daily tops at the time of writing. The pair was trading lower in the early Asian session, but then started to see some buying and climbed toward 0.752 area. The US dollar struggled to preserve its modest intraday gains and pulled back below the 94.00 level, which underpinned the riskier Aussie and assisted the AUD/USD pair to find support. AUD/USD was last seen trading at 0.7533, posting a 0.21% gain for the day. Market focus has now shifted to RBA’s interest rate decision, which is scheduled to release on Tuesday.

From a technical standpoint, the RSI indicator reads 56 as of writing, suggesting tepid bull movement ahead. As for the MACD indicator, the negative histogram has started to diminish which indicates a possible upward trend for the pair. Looking at the Bollinger Bands, the price is rising from the lower band and crossing above the moving average, as a result, the upper band becomes the profit target. In conclusion, we think that the market will be bullish as the pair is heading to test the 0.7556 resistance, a break above that level will open the door for additional near-term profits.

Resistance: 0.7556, 0.7618

Support: 0.7454, 0.7379, 0.7227

USDCAD (4- Hour Chart)

USD/CAD declined on Monday as investors looked past Friday’s downbeat Canadian GDP print for August. The pair was trading higher during the Asian session, but failed to preserve its bullish momentum. USD/CAD was surrounded by selling pressure and dropped to a daily low during the American session. The higher oil prices continue to support the pair with expectations that OPEC+ will slowly increase oil production. On top of that, a more hawkish Bank of Canada pulled forward its expected timeline for interest rate hikes, acting as a tailwind for the domestic currency.

From a technical perspective, the RSI indicator stands at 44 figures as of writing, suggesting tepid bear movement ahead. As for the MACD indicator, the negative histogram has started to diminish, which indicates a possible upward trend for the pair. Meanwhile, with the Bollinger Bands, the price has dropped below the moving average and moved toward the lower band, which indicates a bear market. In conclusion, we think that the market will be bearish as long as the 1.2432 resistance line holds.

Resistance: 1.2432, 1.2499, 1.2648

Support: 1.2288, 1.2013

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The US Core Personal Consumption Expenditures accelerated 3.6% YoY in September, reaffirming…

The US Core Personal Consumption Expenditures accelerated 3.6% YoY in September, reaffirming the theory that the Fed will be forced to accelerate its monetary normalization plans

20211101
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Market Focus

Stocks ended at records on Friday as investors digested disappointing earnings results from Apple (AAPL) and Amazon (AMZN) that came during an otherwise solid quarterly reporting season from many major companies. The S&P 500 set record intraday and closing highs. The index posted a monthly gain of over 6.5% in October, or its best single-month advance since November 2020. The consumer discretionary, energy and information technology sectors outperformed the others during the month. The Nasdaq also eked out a fresh record level, even as a couple of heavily weighted technology giants saw their shares dip.

While it seemed like Apple had avoided the chip shortage, the company’s fortunes have now changed. On Apple Inc.’s quarterly earnings call Thursday, CEO Tim Cook was quick to tell investors and analysts that the company’s product shortages aren’t the result of a “fundamental error”, and that its supply chain strategy didn’t create the current troubles.

Instead, he laid the blame on suppliers. While Apple designs its products in-house and relies on contract manufacturers like Foxconn Technology Group to assemble its devices, it is dependent on hundreds of global suppliers to provide it with the parts and chips that make up an iPhone, iPad, Apple Watch, or other devices. If just one part is in tight supply, Apple can’t build and ship that device. Therein lies the problem—not Apple’s scrutinized manufacturers in China, Cook seemed to imply.

It’s not surprising to see Cook defend Apple’s supply chain strategy. After all, he was the one who helped forge the partnership with Foxconn and build its supply chain empire two decades ago. If it were not for its current problems, Apple would have reported a record $90 billion for its fiscal fourth quarter. And instead of missing analyst expectations for total sales—as well as falling short in revenue from the iPhone, Mac and accessories—it probably would have had a clean sweep of beating Wall Street forecasts.

Main Pairs Movement

The US dollar appreciated hugely on Friday as the market positions for the Fed’s meetings next week amid higher US Treasury yields. The dollar index surged 0.83% at the end of the week, with the Greenback beating all of its major rivals. The US Core Personal Consumption Expenditures accelerated 3.6% YoY in September, reaffirming the theory that the Fed will be forced to accelerate its monetary normalisation plans, which, less than one week ahead of November’s meeting, has boosted demand for the USD.

The shared currency erased all of its gains against its rivals as the GDP figures appeared disappointing. Cable closed the day in the red, dropping 0.76% throughout the day. Commodity-linked currencies are also lost significantly against the Greenback, as did the USD/JPY pair.

Gold slid to $1783/ounce amid the broader dollar strength. Crude oil prices closed mixed, with WTI posting a modest rise to $83.28, and Brent dropping over 1% to $83.62 after Iran’s return to the Joint Comprehensive Plan of Action (JCPOA), a nuclear agreement between Iran and some major countries, became possible.

Technical Analysis

USDJPY (4- Hour Chart)

USDJPY gained positive traction after the release of the US PCE Price Index, and is trading at 114.0215. The US dollar revived as a strong pickup in the US Treasury yields, boosting the demand for the Greenback. From a technical perspective, USDJPY remains supportive on Friday after the pair traded above the midline of the Bollinger Bands. However, from a broader outlook, the pair still maintained its bid tone as October’s trend is still in the descending mood. Thus, it will be prudent to wait for a strong breakthrough. The pair will need to break above 114.699, the next resistance, in order to reverse its current trend. The RSI indicator has not reached the overbought territory, giving room for the pair to extend further north.

Resistance: 114.699

Support: 113.38, 112.57, 111.91

EURUSD (4- Hour Chart)

After the release of US inflation data, EURUSD pushed lower toward 1.1580 at the time of writing. From a technical perspective, EURUSD lost its upside momentum after attempting to contest the resistance at 1.1685 on Thursday. It can be viewed as a technical correction as the RSI indicator on the 4- hour chart edged lower after reaching above 70, which is overbought territory. The outlook of the currency pair turned bearish as it traded below the Simple Moving Averages. At the same time, bears are supported by the negative MACD. On the downside, the pair is expected to head toward the next immediate support level at 1.1524.

Resistance: 1.1624, 1.1685, 1.1735

Support: 1.1524

GBPUSD (4- Hour Chart)

GBPUSD is on the back foot and is trading below 1.3700 as the US dollar rebounds in the American trading session. From the technical aspect, the outlook of the currency pair remains on the downside as it falls within the lower bounds of the Bollinger Bands and below the Simple Moving Averages. The RSI indicator has returned below 50, suggesting that buyers remain hesitant when it comes to a steady advance. At the moment, the pair is heading to the next immediate support level at 1.3673, while downside momentum continues to exist as the RSI has not yet reached the oversold territory, providing rooms for further southern movement.

Resistance: 1.3735, 1.3835

Support: 1.3673, 1.3623, 1.3573

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Facebook’s CEO, Mark Zuckerberg, has announced that beginning on December 1st, Facebook…

Facebook’s CEO, Mark Zuckerberg, has announced that beginning on December 1st, Facebook will be rebranded as Meta Platforms Inc and will be switching the ticker FB to MVRS

20211029
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Market Focus

U.S. equity markets bounced back strongly on Thursday as upbeat economic data and stellar corporate earnings results boosted market sentiment. The S&P 500 gained 1% to close at another record high of 4596.42. The Nasdaq gained 1.4% to close at 15448.12, and the Dow gained 0.7% to close at 35730.48. Since earnings season began, 82% of the companies that make up the S&P 500 has been able to report earnings that beat analyst estimates.  

The U.S. GDP grew by 2% quarter over quarter, marking the weakest quarter of growth since mid-2020. A surge in COVID cases and the supply chain crunch both hindered the growth over the past quarter. On the other hand, the Initial Jobless Claims figure hit a fresh pandemic low at 281,000. 

The 10-year Treasury yield increased slightly to settle at 1.578% and the 30-year Treasury yield increased slightly as well to settle at 1.979%.  

Facebook’s CEO, Mark Zuckerberg, has announced that beginning on December 1st, Facebook will be rebranded as Meta Platforms Inc and will be switching the ticker FB to MVRS. The new parent company will be devoted to creating a more immersive experience of the world wide web by combining virtual reality and building a virtual world where all media sources can be combined and utilized. 

Main Pairs Movement

The Greenback declined sharply at the onset of the Q3 GDP data release. The U.S. recorded a 2% growth in GBP, quarter over quarter, weaker than analyst estimates. Despite record-low jobless claim figures, the Dollar continued to dive as the DXY hit the intraday low of around $93. 

The Japanese Yen weakened as BoJ governor Haruhike Kuroda reiterated the central bank’s dovish monetary policy despite inflation rising to a 13-year high in September. The Euro traded higher against the Greenback, mainly due to the Dollar’s weakness as the ECB left monetary policy unchanged. The Sterling traded lower against the Dollar as well due to Dollar weakness across the board. 

Technical Analysis

USDJPY (4- Hour Chart) 

USD/JPY is hanging near two-week lows, trading around 113.41 at the time of writing. After Bank of Japan’s Haruhiko Kuroda’s commented on the outlook of Japan’s GDP and inflation, the currency pair witnessed some selling pressure. 

From the technical perspective, USDJPY remains depressed, hovering near the lower bound of the Bollinger Band and trading in the descending trend. However, the immediate support level at 113.38 would be a possible turning point as the RSI indicator has nearly reached the oversold territory, and is currently at the 36.6 mark, giving the pair room to rebound. At the same time, the MACD is nearly flat, indicating a possible direction change from sell to buy.  

Resistance: 114.70 

Support: 113.38, 112.57, 111.91 

EURUSD (4- Hour Chart) 

EUR/USD is trading monthly highs above 1.1680 as the US dollar sell-off picks up steam. The US dollar has lost strength and is having a hard time finding demand after the ECB’s cautious tone on European inflation outlook. From a technical standpoint, the 4-hour chart outlook for EUR/USD has provided a mildly bullish stance since mid-October. Today’s bullish move has breached the monthly highs, providing some supports to bulls. At the same time, the pair has recovered above its 20 Simple Moving Average, indicating a neutral-to-bullish trend. At the moment, the pair is heading to its next immediate resistance at 1.1697, which would be an obstacle to overcome as the RSI has nearly reached the overbought condition. At the same time, the currency pair has traded above the upper band of the Bolliger Bands. If EUR/USD can successfully breach the resistance level, then it will head toward the next level at 1.175. On the contrary, if the pair fails to penetrate the level, it will possibly consolidate for an adjustment.  

Resistance: 1.1697, 1.1750, 1.1180 

Support: 1.1631, 1.1524 

GBPUSD (4- Hour Chart)

GBP/USD extended, and is trading around the 1.3800 region as the US dollar loses traction after the disappointing Q3 GDP data. From the technical perspective, despite the recent recovery, the currency pair remains on the downside and is trading in a descending trend. However, the pair still has the potential to move further north as the RSI is only at the 59 level, with plenty of room to extend further. The short-term bulls are supported as the pair has traded above the 20 Simple Moving Average at the time of writing. For the upside, if the pair can break the next immediate resistance at 1.3801, then the bullish momentum would have a chance to bring the pair further toward 1.3835.

Resistance: 1.3801, 1.3835

Support: 1.3735, 1.3673, 1.3623

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