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USDJPY - the Bank of Japan announced the continuation of the redemption of bonds

The changes will not affect the interest rate, which is expected to be kept at a negative level of –0.10%, but, according to the decision of the officials, the rules for the redemption of government bonds will be adjusted. Purchases of securities will continue with no volume cap, and transactions in bonds with a fixed rate of 0.25% will now take place every business day. The bank also intends to acquire shares of exchange-traded funds (ETFs) and real estate trusts worth about 12 trillion yen and 180 billion yen, respectively. In addition, corporate bond buybacks worth up to 3 trillion yen will continue. Thus, one can say with confidence that the high volatility in USD/JPY will increase, and against the backdrop of a declining US dollar, the yen has high chances for a correction.

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The trading instrument is trading in the global uptrend, below the annual high of 139.00. Technical indicators are holding a buy signal, which started to weaken: the fluctuation range of the Alligator indicator EMAs is slightly narrowing and the histogram of the AO oscillator is forming new descending bars and approaching the transition level.

Support levels: 136.7, 134.2 | Resistance levels: 139, 141​
 

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Crude Oil - lower demand for gasoline in the USA puts pressure on quotes

Earlier, data from the Energy Information Administration of the US Department of Energy (EIA) were published, which put pressure on the positions of the trading instrument. In particular, oil reserves decreased by 0.446M barrels, and distillates — by 1.296M barrels, while gasoline reserves in the USA immediately increased by 3.498M barrels, which worries investors, since such a rapid drop in gasoline demand during the summer car season can mean serious problems in the national economy. Probably, the population cannot pay for fuel at the new high tariffs, which threatens to further reduce its sales. An additional factor of pressure on prices is the resumption of production at a number of fields in Libya, where a regime of force majeure was previously announced.

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Now the trading instrument is testing the mark of 103.12 (Murray [1/8]), consolidation below which will allow the quotes to continue moving to the area of 100 (Murray [0/8], Fibo retracement 50.0%) and 96.88 (Murray [-1/8]). The key for the "bulls" is still the level of 108, the breakout of which will be a catalyst for growth to the levels of 112.5 (Murray [4/8]), 115.62 (Murray [5/8]).

Technical indicators signal the continuation of the decline: the Bollinger Bands are directed downwards, the Stochastic is reversing downwards in the overbought zone, and the MACD histogram is stable in the negative zone.

Resistance levels: 108, 112.50, 115.62 | Support levels: 103.12, 100.00, 96.88[/JUSTIFY]
 
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SOLIDECN

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Silver - demand for silver is actively declining​

To assess the current trends in the market, it is enough to refer to the statistics on the demand for the assets of the metal group on the commodity exchange. According to the latest report from the US Commodity Futures Trading Commission (CFTC), investor interest in silver contracts is so low that it could fall into negative area for the first time in three years by the end of this month. The last time such a strong negative trend was observed in the early summer of 2019, when metal quotes were around 15 dollars per ounce. It follows from the statistics that last week the number of net speculative positions on the asset was fixed at around 3.2K.

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Quotes are gradually decreasing and setting new annual lows. Technical indicators maintain the global sell signal: the range of EMA fluctuations on the Alligator indicator expands in the direction of decline, and the histogram of the AO oscillator is forming descending bars, being in the sales zone.

Support levels: 18.40, 16.81 | Resistance levels: 19.30, 20.63​
 

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USDCHF - trading instrument is preparing to continue to decline​

However, there are no prerequisites for the strengthening of the franc at the moment either. Instead, the economic situation in Switzerland is rapidly deteriorating, and in the near future the country may face an acute energy crisis. At least, this is what Michael Frank, director of the VSE association of Swiss electricity companies, said. According to him, power outages were caused by a reduction in gas supplies from Russia and the shutdown of nuclear power plants in France for maintenance. The only way to stabilize the situation, Frank sees a phased reduction in resource consumption, which, in particular, includes limiting the illuminating of shop windows and streets, and if this is not enough, then turning off individual regions for four hours in turn. The Swiss authorities predict an increase in the negative dynamics of electricity prices. According to the head of the government’s advisory commission for electricity, Elcom, Urs Meister, ordinary citizens' electricity bills could grow by an average of 20% next year. This conclusion comes from a survey of suppliers who intend to raise prices by 47% amid rising coal prices, likely problems with exports from neighboring countries and global supply uncertainty.

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On the global chart of the asset, the price is correcting within the lateral channel, preparing to continue the local decline. Technical indicators have almost reversed and issued a sell signal: fast EMAs on the Alligator indicator came close to the signal line, and the AO oscillator histogram has already moved into the sell zone, continuing to form descending bars.

Support levels: 0.9652, 0.953 | Resistance levels: 0.9739, 1​
 

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EURUSD - the ECB raised its base rate for the first time since 2011​


Euro quotes reacted ambiguously to the decision of the European Central Bank (ECB) to tighten monetary policy at a more aggressive pace. The result of the meeting of the regulator, which took place the day before, was an increase in all three key indicators by 50 basis points at once for the first time after an 11-year break. Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 0.50%, 0.75% and 0.00% respectively, with effect from 27 July 2022. In addition, the ECB noted the expediency of continuing the "hawkish" course. In particular, the Asset Purchase Programme (APP) and the Pandemic Emergency Purchase Programme (PEPP) will continue, and the launch of Transmission Protection Instrument (TPI) will be announced, which will minimize discrepancies in borrowing costs for euro area countries. As a result, it is obvious that the ECB considers the current time to be suitable for a more serious increase in rates and hopes in this way to significantly reduce the rapid inflation by autumn, bringing it to the target of 2.0% in 2023.

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Despite the external pressure, EUR/USD is holding within the global downward channel and is now forming another wave of corrective growth. Technical indicators gave a signal for the beginning of the correction: fast EMAs on the Alligator indicator are actively approaching the signal line, and the AO oscillator histogram is forming upward bars.

Support levels: 1 , 0.9752 | Resistance levels: 1.0277, 1.0586​
 

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CAC 40 - French stock market is correcting upwards

Thales Group, a company producing information systems for aerospace, military and maritime applications, recorded quarterly revenue at the level of analysts' expectations in the region of 4.05 billion euros, surpassing the figure of the previous period at the level of 3.74 billion euros; and advertising and communication company Publicis Groupe reflected revenue of 3.07 billion euros, the best result since 2016. Macroeconomic data will also be published today, including Services and Manufacturing PMIs, where a decline to 52.7 points and 50.8 points, respectively, is projected.

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The asset quotes are in the global downtrend, approaching the resistance line. Technical indicators have already reversed and issued a new buy signal: the fast Alligator indicator EMAs crossed the signal line from below, and the histogram of the AO oscillator moved to the buy area, forming ascending bars.

Support levels: 6070, 5827 | Resistance levels: 6254, 6568​
 

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In the shares of the American company Snap, which owns the Snapchat application, a global downtrend is developing, and at the moment the quotes of the trading instrument are around 16.00.

On the daily chart, a global downtrend is forming, which is the result of the implementation of the Triangle pattern, and after the price gap with the boundaries of 15 – 22, the price makes attempts to work it out.

On the four-hour timeframe, it is clearly seen that the most serious attempt to close this price gap is taking place right now, since the quotes have already overcome the key level of 15.5 and continue to grow actively. Nevertheless, another serious obstacle for the upward movement is the resistance line of the global trend at 17.00, the overcoming of which will become the main marker of a change in the trend.

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Technical indicators are ready to issue a buy signal: the range of EMA fluctuations on the Alligator indicator is trying to begin expanding in the direction of growth, and the histogram of the AO oscillator has already moved to the buy zone.​
 

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Crude Oil​

Quotes of Crude Oil have continued to decline since the end of last month and have now left the ascending channel, testing the 95.45 mark (Fibo retracement 50.0%). Consolidation of the price below it will allow the movement to continue up to 87.5. The key for the "bulls" is a strong resistance level of 102.5 (the middle line of the Bollinger Bands), the breakout of which will act as catalysts for upward dynamics to the area of 106.25, 112, however, this option is currently estimated as less probable.



Technical indicators point out the continuation of the current trend: the Bollinger Bands and the Stochastic have reversed downwards, the MACD histogram is stable in the negative zone.

Resistance levels: 102.5, 106.25, 112 | Support levels: 95.45, 87.5, 85​
 

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AUDUSD - Upward correction in the asset​

At the recent Australian Strategic Business Forum – Melbourne, the head of the Bank of Australia, Philip Lowe, announced a preliminary forecast that inflation in the country would accelerate, and new anti-records may be reflected in the quarterly report, after which another peak in consumer prices will probably have to at the end of the year. Analysts suggest that in the second quarter, the figure will increase from the current 5.1% to 6.3% against the continued decline in key sectors of the economy. Thus, in June, Manufacturing PMI fell to 55.7 points from 56.2 points, and Service PMI – to 50.4 points from 52.6 points a month earlier. In his speech, the head of the financial department also said that the neutral key rate at the current inflation rate should be at least 2.5%, while now it consolidates at 1.35%. Faster labor productivity growth will likely be a catalyst for the higher value.



The price remains inside the Expanding formation pattern on the global chart, rising within the local trend. Technical indicators signal the presence of an upward correction: fast EMAs on the Alligator indicator have almost reached the signal line, and the AO oscillator histogram has approached the transition level.

Support levels: 0.6855, 0.671 | Resistance levels: 0.6978, 0.712​
 

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XAUUSD - Investors are actively reducing short positions​

The current growth was the reaction of traders to the slowdown in the USD dynamics, which has been putting pressure on the quotes of the precious metal for two months now. The proximity of the US Federal Reserve meeting, scheduled for Wednesday, July 27, provoked an outflow of investor capital into conservative gold, which traditionally acts as a safe-haven asset in situations of uncertainty. Of course, if the interest rate is increased by 75 or even 100 basis points, a short-term decline in the trading instrument is inevitable, but after that, the global correction may resume.

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On the weekly chart, the formation of a long-term downward channel continues, with dynamic boundaries of 1800.0–1650.0. The price is trying to start a new wave of growth. Technical indicators are holding a sell signal, which is slightly weakening: fast EMAs on the Alligator indicator have begun to approach the signal line, and the AO oscillator histogram is forming new rising bars in the sell zone.

Support levels: 1695, 1650 | Resistance levels: 1741, 1786
 

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USDJPY - correction after a five-month uptrend​

Despite the decision of the Bank of Japan to leave the interest rate unchanged at a negative level of –0.10%, the trading instrument failed to strengthen its position. Instead, the quotes began to decline and broke through 136.7, initiating a correction after a strong five-month uptrend. At a subsequent press conference, the head of the regulator, Haruhiko Kuroda, said that the country's financial authorities would continue the current "dovish" course and maintain an ultra-loose monetary policy, responding appropriately if the market situation required it. According to Kuroda, the economic risks are currently skewed to the downside, as growth rates are not keeping with the acceleration of inflation but will eventually be balanced. The main goal of the current policy is to increase the population's income and fix inflation above 2%, the official stressed.

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The long-term trend remains upwards. However, the instrument is heavily overbought, which led to an inevitable correction, as a result of which the traders broke through the support level of 136.7. Now the decline target is 134.55. In case of its breakdown, the downward dynamics will intensify to the area of 131.4. The medium-term trend is upwards. At the moment, the instrument is correcting, trying to test the key trend support 135.24 – 134.84, after which traders should consider new long positions with the target at the July high of 139.30.

Resistance levels: 136.7, 139, 141 | Support levels: 134.55, 131.4

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USDCAD - The pair is down 2.3% from July highs​

On July 13, the regulator raised the interest rate by 100 basis points to 2.5%. However, the markets expected conflicting inflation figures. According to macroeconomic statistics, CPI was recorded at 6.2% YoY, higher than the analysts' forecast of 5.9% and the previous value of 6.1%, but standard inflation slowed down in June. The indicator was lower than the forecast of 0.9% MoM and the May value of 1.4%, probably due to the seasonal factor and the adaptation of enterprises to the new conditions of monetary policy.

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The long-term trend in the USDCAD pair remains upward. The key support for the trend is at 1.2835, and market participants tested it last Friday, which resulted in quotes rising to the 1.2938 area. Accordingly, for the upward dynamics to continue, buyers need to break through it. Otherwise, the USDCAD pair is expected to decline and renew the July low of 1.2835.

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The mid-term trend changed to a downtrend last week. Traders broke through the key trend support 1.2996–1.2974. The sell target zone is 1.2777–1.2756. The key trend resistance is shifting to 1.3064–1.3042. If the participants overcome it within the correction, it will be possible to consider short positions with the first target at the last week's low.

Resistance levels: 1.2938, 1.3065, 1.3157 | Support levels: 1.2835, 1.2525​
 

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EURUSD - The development of the energy crisis increases pressure on the euro

The European economy continues to slide smoothly into recession, and one of the key factors in the current downturn is the rapid development of the energy crisis. So, yesterday, the Russian company Gazprom, which supplies gas to the EU countries, announced that one of the turbines of the gas pipeline would be stopped for repair, and the total volume of pumping from July 27 will decrease to 33M cubic meters per day. Thus the low level of supplies will be corrected by almost half. The head of the European Commission, Ursula von der Leyen, called on the leadership of the EU states to prepare for a complete halt in supplies from Russia against the background of the sanctions policy. To avoid critical consequences, the official announced the need to save resources even in those territories where dependence on Russian resources is insignificant. Earlier, a document was presented: it obliged all states of the region to submit projects for a voluntary reduction in gas consumption by 15% by the end of March next year by the end of September this year, which was criticized. Yesterday, there were reports of numerous adjustments being made to adapt to a particular country's needs. Today, the project was agreed upon at a special meeting of EU energy ministers in Brussels.

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Despite serious pressure, the EUR/USD pair is within the global downward channel, approaching the resistance line. Technical indicators continue to hold a sell signal, which is gradually weakening: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram continues to form upward bars.

Support levels: 1.0130, 0.9952 | Resistance levels: 1.0278, 1.0494​
 

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NZDUSD - New Zealand households face rising cost of living

Yesterday, Statistics New Zealand (Stats NZ) published data on the cost of living index for various household groups, noting an increase in the indicator in June of this year by 7.4% compared to the same period in 2021. Thus, the cost of living for households with high average expenses increased by 8.1%, and for households with low expenses – by 6.5%, reflecting the most rapid negative dynamics since 2008, the key drivers of which, as noted, were high tariffs for gasoline and utilities.

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The NZDUSD pair continues to trade within a global downtrend, gradually rising towards the local resistance level. Technical indicators are ready to reverse and signal to start buying: fast EMAs on the Alligator indicator have almost reached the signal line, and the AO oscillator histogram has moved into the buying zone, having formed the first rising bar.

Support levels: 0.6213, 0.6062 | Resistance levels: 0.6315, 0.6421​
 

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Crude Oil - Demand for oil contracts is still strong​

Oil quotes began the morning session with growth after Reuters reported a drop in US strategic reserves (SPR) to its lowest level since 1985. Thus, according to the national Ministry of Energy report, for the week from July 16 to July 22, the indicator decreased by 5.6M barrels. Thus, the total volume of stocks in storage facilities fell to 474.5M barrels, and this figure will continue to decrease since, according to the plans of the US government, the launch of sour oil on the market is scheduled before the end of this year.

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On the weekly chart, the price, having rebounded from the support line of the wide channel, turns in the direction of growth, forming a local Head and shoulders pattern. Technical indicators keep a sell signal but have already started a reversal: fast EMAs of the Alligator indicator are approaching the signal line, and the histogram of the AO oscillator, being in the sell zone, is forming new upward bars.

Support levels: 96.93, 92.4 | Resistance levels: 103.61, 112.32​
 

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The ETHUSD pair continues to trade within a wide long-term downward channel. However, over the past two weeks, the cryptocurrency has shown significant growth, adding about 66%, and consolidated at 1660. However, the quotes failed to stay in this area and resumed the decline.

For the development of downward dynamics, the digital asset needs to fall below the support zone of 1375 − 1345 (the middle line of Bollinger bands). In this case, the downside targets will be 1250 and 1125, and 1000. The key “bullish” level is 1625, the breakout of which will allow quotes to continue moving to the area of 1750, 1885 Fibonacci correction 38.2%).

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Technical indicators do not give a single signal: Bollinger bands are directed upwards, Stochastic reversed downwards, while the MACD histogram is stable in the positive zone. Given the long-term trend, a continuation of the price decline soon seems to be a more likely scenario.

Resistance levels: 1500, 1625, 1750, 1885 | Support levels: 1345, 1250, 1125, 1000​
 

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AUDUSD - Inflation in Australia may accelerate​


The AUDUSD pair started the week with an upward movement and is currently testing the level of 0.6958. However, consolidation above it seems less likely, as investors refrain from opening new trading positions, waiting for two key releases on Wednesday – the publication of inflation data in Australia and the decision of the US Federal Reserve on the interest rate.

Thus, Q2 CPI is likely to be poor: the indicator will consolidate around 6.1–6.3% YoY, which is twice the target of the Reserve Bank of Australia (2.0–3.0%) and thus will reach the high since 1990. Implementation of the forecast or its exceeding will confirm the fears of the head of the regulator, Philip Lowe, who recently stated that “psychological inflation” is forming in the country when consumers rush to spend available capital, expecting further price increases, which only exacerbates the negative dynamics, which, in turn, could push agency officials to accelerate the pace of interest rate adjustments to 75 basis percentage points, increasing the risks of the national economy going into recession.

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The trading instrument is within the long-term downward channel, and now the price is testing 0.6958, consolidation above which will allow quotes to strengthen to the area of 0.708. Otherwise, the price decline will resume to 0.6835, 0.6713. Technical indicators do not give a single signal: Bollinger bands are horizontal, Stochastic is leaving the overbought zone, forming a sell signal, and the MACD histogram is preparing to move into the positive zone.

Resistance levels: 0.6958, 0.708 | Support levels: 0.6835, 0.6713, 0.6591​
 

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Silver Technical analysis​


H4
On the four-hour chart, there is a long-term consolidation of the asset in the range of 18.12–20, and at the moment, above 18.12, the quotes have formed a Morning star candlestick analysis model, which is a reversal formation at the bottom. Also, an Inverted hammer pattern has formed, the green color of which emphasizes the "bullish" strength. The combination of these figures indicates that the trading instrument has reached the bottom and a high probability of further recovery to the resistance level of 20.56, the breakout of which will increase the upward dynamics to the zone of 22.16−24.22. An alternative scenario is possible if the "bulls" fail to hold the key level of 18.12. The instrument may drop to the range of 16.57–14.6.

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D1
On the daily chart, the falling Wedge price pattern is being completed. The fact that the asset has reached the bottom is also indicated by the appearance above the support level of 18.12 of a series of Hammer and Inverted hammer figures. Also, the confirmation of the increasing activity of buyers can serve as a model of a "bullish" Belt hold. In this situation, the probable scenario of the price movement seems to be the breakout of the upper border of the Wedge with further growth to the area of 20.56−24.22.

Support levels: 18.12, 16.57, 14.6 | Resistance levels: 20.56, 22.16, 24.22

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GBPUSD - The market is waiting for the US Federal Reserve meeting

However, the current trend is not a consequence of the strengthening of the British currency since the fundamental background is still rather negative. Yesterday, Reach, the publishing house that owns the Daily Mirror and Daily Express newspapers, reported a significant reduction in the number of pages in printed versions due to a record increase in the cost of paper, which in turn is a consequence of the current energy crisis and rapid inflation. According to The Guardian, the publisher's newsprint spending increased by 65%, leading to a 6.0% decline in pages in popular newspapers in the second quarter, the lowest since the acute phase of the COVID-19 pandemic. The increase in the cost of consumables was the driver of Reach Plc. profit drop by 31% in six months. As for the macroeconomic statistics, yesterday, July data on the change in the volume of retail sales from the Confederation of British Industrialists (CBI) were presented, which was poor: the indicator strengthened the negative dynamics from –4 points to –5 points but preliminary estimates for August statistics were even worse, reaching –14.0 points.

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The trading instrument moves within the global downward channel, reversing upwards. Technical indicators continue to weaken the current sell signal: indicator Alligator’s EMA oscillation range narrows, and the histogram of the AO oscillator forms ascending bars, approaching the transition level.
Support levels: 1.1992, 1.1762 | Resistance levels: 1.2107, 1.2355
 

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USDJPY - Bank of Japan continues buying bonds​


As previously reported, officials kept the interest rate at a negative value of –0.1% and announced their intention to continue buying government bonds from the market without setting a cap to consolidate their yield around 0 %. In particular, the bank will purchase 10-year bonds every working day at a consolidated rate of 0.25% for an unlimited amount. In other words, the agency will continue to provide over-issuance, which is observed at the moment and may be one of the reasons for the local strengthening of the yen against the major world currencies.

Yesterday, the Japanese government, in its economic report, gave an optimistic assessment of the development of the national economy against the backdrop of increased consumer activity. Indicators are expected to return to growth in the second quarter after falling at the beginning of the year, although the pace continues to be affected by prolonged disruptions in the supply chains of high-tech devices that are exported from the country, rising raw material costs, and fluctuations in financial markets.

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The trading instrument moves within the global uptrend. Technical indicators keep a weakening buy signal: indicator Alligator’s EMA oscillation range narrows and the AO oscillator histogram forms new downward bars, approaching the transition level.

Support levels: 136.05, 133.78 | Resistance levels: 137.77, 139.39​