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EUR/USD trimmed a major part of the previous day’s gains to a fresh nine-month peak. Rising US bond yields underpin the USD and keep a lid on any further gains for the pair. The recent hawkish by ECB officials continue to lend support to the common currency. Traders now look to the flash PMI prints from the Eurozone and the US for some impetus. The EUR/USD pair touched its highest level since April on Monday, albeit struggled to find acceptance above the 1.0900 mark and finally settled with only modest intraday gains. The shared currency was underpinned by more hawkish comments by European Central Bank (ECB) officials, signalling additional jumbo interest rate hikes in coming months. In fact, ECB governing council member Klaas Knot said that interest rates would rise by 50 bps in both February and March and continue climbing in the months after. Furthermore, ECB President Christine Lagarde repeat the recent policy guidance and said that the central bank will keep raising interest rates quickly to slow inflation, which remains far too high. Adding to this, a fall in natural gas prices helped ease fears of a recession in Europe and offered additional support to the EUR/USD pair.… Read More »EUR/USD Outlook: Bullish potential intact, eyes flash Eurozone/US PMIs for fresh impetus

Stocks have rounded off the week with gains, and it is the tech sector that has seen the strongest gains, in a change to the norm for the year so far, says Chris Beauchamp, chief market analyst at online trading platform IG. Tech stocks lead the way higher “A faint echo of the post-pandemic glory days for tech stocks was heard this afternoon, as the Nasdaq 100 led the way higher for indices following well-received earnings from Netflix and job cuts at Google. This is a notable contrast to the recent past, where tech has usually been the leader in any downward move. But it is unlikely to be the beginning of a renaissance for the sector just yet, there is still too much to worry about for investors, and even the relative cheapness of the sector versus the halcyon days of pre-2020 have yet to provide a real attraction.” Layoffs risk pushing the US towards recession “Pre-earnings redundancies seem to be the fashion in the US right now, and have been received in positive fashion by markets keen to see signs of cost-cutting among companies. But it is a tricky tightrope to walk – a wave (or waves) of… Read More »Nasdaq gets a boost from earnings and Google layoffs

Summary Weak Demand Continued to Depress Sales, but Improved Affordability Lessened the Blow Existing home sales declined for the 11th straight month, dropping 1.5% from November to December. This decline was shallower than expected and a softer drop than November, which was revised to a weaker 7.9% decline. The better-than-expected outcome for December still left existing home sales at a 4.02 million-unit annual pace, the lowest level since November 2010. Year-over-year, existing home sales were down 34.0%. While housing demand remains relatively depressed, lower mortgage rates and softer home price appreciation are likely starting to bring buyers off the sidelines. Mortgage rates started trending downward at the end of 2022 and averaged 6.36% in December. Rates have dropped even lower since then and averaged 6.15% during the week of January 19. The leg down in financing costs looks to have boosted mortgage demand. Mortgage applications for purchase jumped 24.7% in the second week of the year. The median single-family home price fell 1.6% in December to $372,700 on a not-seasonally adjusted basis. December marks the sixth straight month of falling home prices, declines that are partly influenced by seasonal factors but also driven by sellers adjusting prices lower to better… Read More »Existing Home Sales Slip in December

GBPUSD may lead to the formation of a global corrective trend – a triple zigzag w-x-y-x-z, in which the market builds the final actionary wave z of the cycle degree. The wave z most likely takes the form of a primary triple zigzag, in which we see the development of the primary wave. It may take the double zigzag pattern (W)-(X)-(Y). The formation of the intervening wave (X) has recently ended. There is a high probability that the last sub-wave (Y) will take the form of a zigzag A-B-C. The end of the first impulse wave A is expected at a minimum of 1.095. Alternatively, it is assumed that the cycle wave z could have been fully completed. Thus, we see that since the end of September, bulls have started to move the price up in a new trend. Perhaps we are seeing the development of a primary triple zigzag, where the first four parts are already formed. In the last section of the chart, the final actionary wave is formed. Most likely, it will be at 76.4% of wave and will end near 1.298.

Europe After yesterday’s little setback European markets have seen a modest rebound today, as we come to the end of what looks set to be a negative week for stock markets. Having seen such a strong start to the year there was always the probability that we’d see a little bit of profit taking, however that doesn’t mean that the early year optimism that has been the hallmark of this early year rebound is evaporating, and that we might start to see a sharp move lower. One bad day does not make a trend despite increasing evidence that the global economy is slowing down. On that basis we’re seeing a decent day for the FTSE250 with the likes of Boohoo and ASOS seeing decent gains after being upgraded to “buy” by Bank of America. We’re also seeing a strong end to the week for the likes of JD Sports, Burberry and Sports Direct owner, Frasers Group. The FTSE100 is lagging behind its European counterparts today, having found itself held back this week by weakness in some of its bigger cap components like Shell, Unilever and AstraZeneca.    SSE shares are higher after the energy utility provider revised its full year… Read More »Sterling and retailers shrug off poor retail sales numbers

In today’s live stream, Dale shared downside targets in Aussie. He’s talking Gold Top, USDJPY Bottom and he maintains his bearish view in SPX.

UK retail sales fell by 1% in December, excluding fuel by 1.1%. The data surprised analysts who had, on average, expected an increase of 0.5% last month. Sales were 5.8% lower than in the same month a year earlier, when they were 0.7% below December 2020. The retail sales index has been on a downward trend since April 2021 and, in that time, has returned to pre-pandemic levels, breaking a natural multi-year upward trend with such a sharp decline that Britain did not even see during the Great Recession. Other reports from the Office for National Statistics also point to a steady decline in industrial production, although it is smoother now than in some episodes from 2007 to 2011. Surprisingly, the labour market remains strong. A similar picture can be seen in the USA, for which we received news earlier this week. In both countries, central bankers are signalling further rate hikes and preparing for a “mild recession”. This similarity in macroeconomic conditions makes the GBPUSD dynamics a tug-of-war. However, there are more downside risks in the pair now, given how it has stalled on the approach to the highs of December and the pressure on the stock indices with… Read More »Britons tighten their belts

As 2023 gets underway, so do the central bank meetings and the Bank of Canada will be the next after the BoJ to announce its first policy decision of the year. Meanwhile, investors will be nervously awaiting the first PMI readings of 2023 next week as they juggle to reach a consensus about the recessionary risks. In the United States, there will additionally be the advance GDP estimates for the final quarter of 2022, as well as PCE inflation data. The latest CPI numbers will be at the forefront too in Australia and New Zealand.  BoC to ponder one last rate hike After having spent much of the last year front loading rate hikes, many central banks are now nearing the end of their tightening cycle and this theme is likely to dominate at least the first half of 2023. The Bank of Canada could take the lead in pausing rate hikes when it meets on Wednesday, but in all probability, it will raise its overnight rate by 25 basis points to 4.50% in one final tightening round. Inflation in Canada peaked back in June but then stubbornly hovered slightly below 7%. There was better news from the December data… Read More »Week Ahead – BoC may hike one final time, will flash PMIs spread gloom or optimism?

In this Trading Opportunities Webinar, Neerav Yadav (Author of “Think with the Markets”) has discussed charts of Forex, Commodities, Indices. All discussions are based on Advanced Elliott Wave, with detailed Wave counts as well standard Supply and Demand analysis.

US Q4 GDP – 26/01 – having started the first half of last year with two successive quarters of negative GDP growth, the US economy saw a return to positive GDP growth in Q3, of 3.2%, after a late upgrade from, 2.9% at the end of last year, with personal consumption coming in at 2.3%, a decent improvement on the 2% seen in Q2, and a significant improvement on the first iteration which only came in at 1.4%. The upward revision higher came about as a result of a rebound in consumer spending, as well as higher government spending. As we look towards this week’s first iteration of Q4 GDP is seems quite likely that we’ll see a slowdown from the strong performance in Q3. Expectations are for a modest slide to 2.5%, although with signs in recent months that consumer spending is slowing you might think that there could be considerable downside risks to that estimate.    US Personal Spending/PCE (Dec) – 27/01 – the last 2 months have seen a sizeable slowdown in US personal spending. At the beginning of the quarter, in October, we saw a very solid rise of 0.9%, however November saw that fall sharply to 0.1%.… Read More »The Week Ahead – US Q4 GDP, PCE, ABF, easyJet, Tesla and Microsoft results