USDSGD Analysis: Shift in Sentiment Demonstrated with Cautious Steps (21 May 2024)

After testing lows early yesterday the USD/SGD has climbed slightly higher, this as financial institutions seemingly take on more risk appetite but wait for more impetus.

• The USD/SGD is trading near the 1.34770 mark as of this writing which continues to display some bearish sentiment over the past few weeks.
• However, after touching a low around the 1.34410 ratio yesterday, the currency pair has climbed higher.
• While financial institutions have shifted towards a weaker U.S Federal Reserve outlook, the trend of the USD/SGD is not a one way street downwards.

This morning’s early reversals higher show that a range is still being fought over and the values of the USD/SGD are now entrenched technically in the middle of its three month price range. It is clear that plenty of speculative technical support remains around the 1.34500 to 1.34400 levels which may cause gyrations when challenged over the near-term.

Lack of Big U.S Data Early this Week for the USD/SGD

The U.S will not post much in the way of earth shattering economic data early this week. On Thursday there will be Purchasing Managers Index numbers via the Manufacturing and Services sectors, but it is likely the USD/SGD will continue to be influenced by existing sentiment which has taken on a more optimistic tone regarding inflation. Last week’s CPI numbers from the U.S caused a real selloff in the USD/SGD and the low around 1.34200 tested values last seen on the 21st of March.

The question for traders of the USD/SGD will be focused on existing sentiment. The notion that the USD/SGD has been banging up against support the past handful of days is interesting, but perhaps the more solid clue for technical traders is resistance. If the 1.34800 to 1.34900 levels prove durable this could provide traders with an opportunity to look for some downturns. Unless there is a surprising development today and tomorrow, risk of upwards momentum suddenly becoming strong looks diminished.

Aiming for Realistic Targets in the USD/SGD

While risk appetite has increased in the global markets and the USD has become weaker, yesterday’s low and reversal higher serves as a reminder that ranges remain dominant. Becoming overly ambitious regarding trends is dangerous for short-term day traders. The lows seen last Wednesday may prove to be a low water mark for the USD/SGD until there is more impetus delivered for Forex.

• And for the USD to grow weaker and extend its decline, inflation reports will have to show signs of more erosion.
• On Friday the U.S will see the University of Michigan Inflation Expectations report; this could provide some power for traders.
• But if the number is higher than expected, the USD/SGD could suddenly see some buying power emerge.
• Until later this week the USD/SGD is likely to remain within its known range.

Singapore Dollar Short Term Outlook:

Current Resistance: 1.34780

Current Support: 1.34675

High Target: 1.34920

Low Target: 1.34510

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Canadian #Dollar Awaits #CPI: Forecasts for #USDCAD & #CADJPY (21 May 2024)

• The Canadian Dollar has been consolidating for several days below a key resistance level.
• The Yen has long term weakness, so long CAD/JPY could be a good trade if higher than expected Canadian CPI data is released later today, as this will likely strengthen CAD.

Canadian Dollar Index (CXY): Technical Analysis

The Canadian Dollar has been consolidating for a few days just below the key resistance level shown in the price chart below at 73.52. This follows a rise from April’s lows, which were produced by a continuing downwards trend since the start of 2024. This is an interesting recovery, and the Index now seems to be at a pivotal point, having already likely broken any convincing bearish trend line which could be drawn.

The short-term price action looks bullish as the price tests this resistance level again and again over recent days. However, if it continues to hold, the price action will eventually turn bearish.

If the price can get established above 73.52, it is likely to rise further, at least to the next resistance level at 74.11. so that could facilitate a good long trade.

The Forex market is relatively quiet right now, moving little.

Canadian Dollar Index (CXY): Fundamental Analysis

It is not surprising that the price is now at a pivotal point, as markets are awaiting the release of crucial Canadian inflation data, which is expected to show a decline in month-on-month inflation from 0.6% to 0.5%. If the number is higher than expected, it could be bullish for the Loonie.

The big surprise might be on the other side, with inflation falling even faster than expected. That could open up a real prospect of quicker rate cuts and that could see the Loonie sell off with some momentum, even if it does not last for very long.

USD/CAD Forecast: Technical Analysis

The USD/CAD currency pair has been consolidating for the past few days. This is not surprising as the Canadian Dollar and US Dollar have both been consolidating as individual currencies, so this pair is especially range bound between $1.3590 and $1.3662.

The price is near the top of its recent range where we already see a triple top, so if the price can rise much higher now that will likely be a bullish sign.

A bullish factor is the new higher support level at $1.3627 which has been generated by the recent bullish price action rejecting an earlier minor bearish inflection. This could provide a good floor for a long trade.

If Canadian CPI is lower than expected, then a bullish breakout is likely.

If Canadian CPI is higher than expected, but not by much, the price could fall quickly to $1.3590, where it might bounce hard, giving scope for a long trade there if that happens.

Support Levels:

• $1.3627
• $1.3590
• $1.3556

Resistance Levels:

• $1.3662
• $1.3704
• $1.3738

CAD/JPY Forecast: Technical Analysis

The CAD/JPY currency cross has sold off somewhat after making a new 3-week high price. This is not surprising as although the Canadian Dollar has been consolidating over recent days, the Japanese Yen is in a long-term bearish trend.

The price is falling with short-term bearish momentum towards support at ¥114.19. We may see a bullish bounce there if the level is reached.

If Canadian CPI is lower than expected, then the price will likely fall to either of the nearby support levels, and may produce a quick bounce there, giving a chance to enter a long trade on a scalping basis.

If Canadian CPI is higher than expected, this will likely be a great currency pair to use to exploit that by going long, as the price will likely shoot up to at least ¥115.00.

Support Levels:

• ¥114.19
• ¥113.66

Resistance Levels:

• ¥115.00
• ¥116.00

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#Gold, #silver & #Indices (#DAX,#SP500,#NASDAQ100) Weekly Forecast: 20-24 May 2024

Fundamental Analysis & Market Sentiment

1. Long of the S&P 500 Index following a daily close above 5265. This set up at close on Wednesday and produced a loss of 0.02%.
2. Long of Gold following a daily close above $2400. This did not set up until the end of the week.
3. Long of Silver following a daily close above $29.00. This set up on Wednesday and produced a win of 6.16%.

The overall result was a net win of 6.14%, resulting in a win of 2.05% per asset.

Last week’s key takeaway was the strong resumption of risk-on sentiment due to lower-than-expected US CPI (inflation), which fell from 3.5% annualized to 3.4% as expected. The dovish surprise was in the monthly increase, which was only 0.3% and not the 0.4% which was expected.

It is worth noting that markets were beginning to become weakly risk-on earlier in the week before this data release, which suggests an underlying bullishness in stock markets, perhaps driven by stronger than expected corporate earnings in the USA seen over recent weeks. Anyway, the lower US inflation data sent major indices rising to new highs. This is not only happening in the USA, but also to several major global equity indices. The MSCI World Index reached a new record high last week.

There were two other highly important US data releases last week. PPI came in notably higher than expected, with markets expecting a monthly increase of 0.3% but getting 0.5%. This stoked fears on Tuesday that the CPI data the following data would be high, which turned out not to be true. Retail Sales data showed no increase at all over the past month, which boosted the effect of the lower CPI data in raising the chance of an earlier rate hike.

According to the CME FedWatch tool, about 68% expect the first rate cut to happen at the Fed’s September meeting.

Other important data releases last week were:

1. US Empire State Manufacturing Index – about as expected.
2. US Unemployment Claims – about as expected.
3. Australia Wage Price Index – just a fraction lower than expected, which is very slightly dovish for inflation and rates.
4. New Zealand Inflation Expectations – fell from 2.50% to 2.33%, which is dovish.
5. UK Claimant Count Change – slightly better than expected.
6. Australia Unemployment Rate – rose unexpectedly from 4.1% to 3.9% which may be slightly dovish for inflation and rates.

Gold

The price of Gold rose strongly last week, printing a bullish candlestick which closed near its high. It is worth noting that the price did not make a new high, although the weekly close was a record high.

Overall, we see bullish signs, but the price is not trading in “blue sky”. Note also that Silver outperformed Gold last week and has looked more bullish than Gold for a while longer than that.

Another bullish factor for Gold is the strength in major stock markets, many of which are rising to new record highs. Gold, contrary to widespread belief, is positively correlated with stock markets.

I think Gold looks like a buy right now, although more conservative traders might want to see a New York close above the record high at $2431 before entering.

Silver

The price of Silver rose very strongly last week, printing the largest bullish candlestick seen in years. The candlestick closed very near the high of its range, which is a bullish sign. There is no doubt there is strong bullish momentum here, but over the long and short term.

Silver is trading in blue sky now at a new 11-year high price, well above the major round number at $30.

Another bullish factor for Silver is the strength in major stock markets, many of which are rising to new record highs. Gold, contrary to widespread belief, is positively correlated with stock markets.

I think Silver looks like a strong buy immediately.

S&P 500 Index

After making a fairly deep bearish retracement in April following new all-time highs, the S&P 500 Index rose again last week to again break into new record territory.

There is a small upper wick, but the key things to note are that the weekly close was above the previous record high, and that the wick is nothing out of the ordinary.

It makes sense to be bullish on this major stock market index when it is rising firmly to make new record highs. Historic precedent shows this tends to produce further gains quickly.

It is worth noting that this index is outperforming the NASDAQ 100 Index, suggesting a broad market rally driven by higher than expected earnings outside the tech sector.

I see the S&P 500 Index as a buy.

NASDAQ 100 Index

After making a fairly deep bearish retracement in April following new all-time highs, the NASDAQ 100 Index rose again last week to again break into new record territory.

There is a small upper wick, but the key things to note are that the weekly close was above the previous record high, and that the wick is nothing out of the ordinary.

It makes sense to be bullish on this major stock market index when it is rising firmly to make new record highs. Historic precedent shows this tends to produce further gains quickly.

However, it is worth noting that this index is underperforming the broader S&P 500 Index, suggesting that the performance here could be relatively weak as it is more of a wide market rally than a tech-driven one.

I therefore see the NASDAQ 100 Index as a buy, but only after a daily close above the record high at 18613.

DAX

The German index initially tried to rally during the week but gave back gains as we continue to see a little bit of noise in general. That being said, Friday did show a significant amount of support, and I think this suggest that there are plenty of buyers underneath, so you certainly want to follow the trend, meaning that you want to be a buyer overall. I have no interest in shorting the DAX and do believe that we eventually get to the €20,000 level over the longer term. Buying on the dips is my favorite strategy here.

Bottom Line

I see the best trading opportunities this week as follows:

1. Long of the S&P 500 Index.
2. Long of the NASDAQ 100 Index following a daily close above 18613.
3. Long of Gold.
4. Long of Silver.

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CrudeOil Weekly Forecast: Lower Value Tested and Limited Buying Ignited (20-24 May 2024)

The price range of WTI Crude Oil was a rather polite affair for speculators this week after mid-term lows were challenged on Wednesday of this past week.

• The price of WTI Crude Oil went into this weekend near the 79.460 ratio; this after a low around the 76.700 value was touched on Wednesday.
• While the lows challenged in the middle of the week hit prices last seen in late February, some buying did generate and on Thursday and a high of 79.800 came into sight.
• However, the range of WTI Crude Oil remained within a fairly solid channel taking into consideration the results seen in the commodity since the start of this month.

Since the beginning of May, when WTI Crude Oil literarily dropped below the 80.000 USD price, the commodity has actually seen a rather tight price range which has allowed day traders to test their technical perspectives. The finish for WTI Crude Oil going into the weekend essentially closed trading near marks the commodity was testing on Monday and Tuesday of last week. The move lower needs to be considered and what happens next will be intriguing. The price of WTI Crude Oil has not traversed above 80.000 USD since the 1st of May.

U.S Economic Data and Demand for WTI Crude Oil

As the price of WTI Crude Oil remains within sight but below the 80.000 USD mark, supply and demand for the commodity remains durable. U.S demand for energy over the mid-term may come into question taking into consideration signs the U.S economy is dampening, but having closed the week of trading within sight of 80.000 USD should be considered by speculators. And experienced traders know Crude Oil demand is unlikely to suddenly vanish.

Early trading this week should be watched to see if risk appetite continues to creep into the broad financial markets, if the price of WTI Crude Oil remains comfortably below the 80.000 ratio this may be viewed as a positive by participants in equities and Forex. Tomorrow’s opening in WTI Crude Oil should be examined and if trading remains polite, and sees the commodity pushed backwards to support levels again, this could open the door for more selling to be generated. The price range of WTI Crude Oil is traversing the higher elements of its range for May and resistance levels around the 79.500 to 79.650 values should be monitored early.

Lingering Price Range and Technical Perspectives

If trading early this week continues to demonstrate a top level of WTI Crude Oil that continues to get pushed backwards when current resistance levels are tested, this could open the door for lower values. However, the ability of WTI Crude Oil to bounce with price velocity on Wednesday after seeing sharp selling may be a sign that sentiment remains nervous.

• Once again the 78.000 to 77.000 price levels below could provide intriguing windows to test additional support levels lower.
• If WTI Crude Oil opens with lower values early this week and support levels see sustained tests but do not falter, technical traders may start to look for reversals higher to simply see if the price range remains intact.

WTI Crude Oil Weekly Outlook:

Speculative price range for WTI Crude Oil is 75.800 to 81.300

WTI Crude Oil has seen rather quiet trading the past few weeks and this may continue in the coming days unless there is a sudden news development from the Middle East. Traders may want to use current support and resistance levels in order to test market conditions and the prevailing range. Traders are advised to continue to practicing the use of stop losses to guard against unknown developments which could cause a sudden spike in the price of WTI Crude Oil.

Energy traders are among the most experienced commodity speculators around, and know how to remain tranquil. The price of WTI Crude Oil the past few weeks has shown a lower range with occasional tests of new lows. If the world stays quiet in the coming days, technical traders may enjoy speculative opportunities in the commodity.

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EURUSD Weekly Forecast: Push Upwards and Sustained Higher Technical Values (20-24 May 2024)

The EUR/USD went into this week keeping its optimistic bullish sentiment on display as the closing value of 1.08670 remained within sight of near-term highs.

• The 1.08000 ratio in the EUR/USD was penetrated higher on Tuesday the 14th of May and prices were sustained above this key psychological level the remainder of the week.
• The EUR/USD has been enjoying bullish sentiment in a sustained manner most of May as financial institutions have begun shifting their sentiment towards a weaker USD outlook.
• Economic data from the U.S this past week via the Consumer Price Index coming in under expectations, provided additional impetus for the EUR/USD to maintain its higher price ratios.

On Wednesday of this past week the EUR/USD touched the 1.08965 ratio which had last been seen on the 21st of March. And although the high water mark for the EUR/USD was not able to sustain the loftier speculative highs, the currency pair closed trading on Friday still within eyesight of the marks as it went into the weekend near the 1.08670 ratio. Technical traders who are wagering on fractional values via pips might look at the differential as it having closed significantly lower, but financial institutions who have shifted towards bullish sentiment will likely not be disappointed because they tend to hold positions for the mid and long-term.

EUR/USD Shift in Sentiment and Considerations to Come

The EUR/USD upwards swing has correlated to the broad Forex market, which is no surprise since the currency pair is a catalyst in the financial markets. While behavioral sentiment has taken an optimistic outlook regarding the potential of the U.S Federal Reserve to now consider interest rate cuts, the U.S central bank is unlikely to lower its Federal Funds Rate in June.

This means there is the potential that financial institutions may be getting too far ahead of economic data which could still provide shocks in the coming weeks and months. While the EUR/USD has certainly attained a solid amount of gains, questions regarding resistance now need to be contemplated. Is the 1.09000 level a bit too high for the EUR/USD still, last week the currency pair was certainly pushed back when it came within sight of the higher value.

Technical Perspectives Test are Coming for the EUR/USD

Having made solid gains the past two and a half weeks, the EUR/USD will now have to deal with a rather quiet week of economic data ahead. This means technical traders are likely to take control of the Forex market and existing behavioral sentiment will get tested. Resistance levels will be targeted by those with bullish sentiment, but the question is if there will be enough momentum to drive values above the highs made last week.

• Opening price action in the EUR/USD should be watched closely to see if existing sentiment continues to create some upwards mobility.
• The 1.08800 level may prove a testing ground for higher values and it this level is penetrated and sustained it may attract more bullish wagering.

EUR/USD Weekly Outlook:

Speculative price range for EUR/USD is 1.08070 to 1.09045

The trend upwards in the EUR/USD has been strong, but recent memories and glances at technical charts should be a swift reminder that momentum higher has run out of power throughout trading early this year. However, some traders may be counting on the notion that a psychological shift is taking hold which will allow for higher prices to be sustained.

Support levels should be watched and if the 1.08500 to 1.8400 values can hold onto their strength, reversals which seek buying positions may be seen. Early this week the range of 1.08400 to 1.08800 should be watched. If financial markets remain calm and U.S Treasury yields continue to show signs of erosion, the USD may remain within a weaker perspective and allow for the EUR/USD to climb higher. However, traders should not get overly ambitious regarding their higher targets and be willing to use take profit orders before sudden momentum reverses.

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USDCAD Analysis: Bearish Move Lower as Speculative Wagers Increase (15 May 2024)

The USD/CAD has continued to move lower since last week when the currency pair was traversing near the 1.37625 ratio on the 8th of May.

• As of this morning’s trading the USD/CAD is showing that financial institutions are leaning into their weaker USD centric positions.
• The gradual downturn in the USD/CAD the past week has now put the currency pair near interesting mid-term support levels.
• The USD/CAD is near the 1.36340 ratio as of this writing, the currency pair challenged these lows on Friday of last week and yesterday too.

Although the U.S printed a stronger than expected Producer Price Index yesterday, financial institutions continue to show a desire to maintain their bearish positions in the USD/CAD. Support levels should be watched carefully; on the 3rd of May the currency pair did approach 1.36050 before producing a buying surge.

USD/CAD and Today’s U.S Consumer Sentiment Report Data

While the USD/CAD is technically intriguing because it is bouncing up against rather strong support levels in the short-term, today’s CPI numbers from the U.S will deliver a definite impetus into Forex and volatility should be expected. The stronger than expected inflation numbers yesterday in the U.S did not dampen the enthusiasm of bearish traders who seem to be once again taking on the perspective the U.S Federal Reserve will need to cut its interest rate at some point.

However, if the Consumer Price Index numbers come in with a stronger than anticipated outcome today in the U.S, this could provide an additional shockwave into Forex. Perspective will certainly get tested later today depending on the readings from the U.S inflation reports. Traders with open positions in the USD/CAD before the CPI release should be extraordinarily careful regarding their risk taking tactics.

Reactions and Speculation to Come in the USD/CAD

If the U.S produces weaker than expected inflation numbers today this would seemingly help traders with a weaker USD centric perspective. Yesterday’s PPI data caused a short-term wicked storm in the USD/CAD and broad Forex market, but within about half an hours volatility subsided and the USD returned to its weaker stances against many major currencies. However, if the CPI statistics today are stronger than expected (on top of yesterday’s outcome) this could rattle the confidence of financial institutions which may need to reconsider their mid-term outlooks regarding the Federal Reserve.

• Traders need to be ready for volatility today and the use of stop loss and take profit orders are urged for speculators without deep pockets.
• Traders should anticipate the price range of the USD/CAD to widen before and after the release of the U.S CPI data.
• The 1.36000 ratio is certainly within the sights and goals of bearish USD/CAD traders, but they will likely need weaker U.S inflation numbers to attain this lower level in a sustained manner.

Canadian Dollar Short Term Outlook:

Current Resistance: 1.36455

Current Support: 1.36310

High Target: 1.36920

Low Target: 1.35970

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MARKET UPDATE: #Saudi #Arabia Wholesale #Inflation Ticks Down (15 May 2024)

The annual wholesale price inflation in Saudi Arabia edged down to 3.4% in April 2024 from 3.8% in the previous month.

Prices slowed for other transportable goods except metal products, machinery & equipment (8.1% vs 9.2% in March), while remained unchanged for food products, beverages, and tobacco & textiles (2.4% vs 2.4%) and agriculture & fishery products (0.2% vs 0.2%).

Additionally, costs dropped for metal products, machinery & equipment (-0.6% vs -0.7%) and ores & minerals (-2.2% vs -2.2%). On a monthly basis, wholesale prices decreased by 0.4% in April, after a 0.4% rise in March.

Saudi Arabia Wholesale Inflation Advances in March

The annual wholesale price inflation in Saudi Arabia advanced 3.8% in March 2024, up from 3.1% rise in the previous month, driven by a faster increase in the prices of other transportable goods except metal products, machinery & equipment (9.2% vs 7.5% in February).

At the same time, costs continued to rise for food products, beverages, and tobacco & textiles (2.4% vs 2%). In contrast, prices slowed for agriculture & fishery products (0.2% vs 0.6%), while declined further for ores & minerals (-2.2% vs -2%) and metal products, machinery & equipment (-0.7% vs -0.6%). On a monthly basis, wholesale prices rose 0.4% in March, rebounding from a 1.2% fall in the prior month

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XAUUSD #Gold Price Analysis Today: Selling Pressure Exposure Despite #Dollar Losses (14 May 2024)

• Gold prices have declined to around $2,332 an ounce as of the start of trading this week.
• This is as investor focus shifts to key US inflation reports due out this week to seek further clues about the Federal Reserve’s monetary direction amid mixed signals from Fed officials.
• The US Producer Price Index is scheduled for release today, Tuesday, followed by the Consumer Price Index tomorrow, Wednesday.
• After the weaker-than-expected US jobs report for April and the disappointing job report last week, expectations for US rate cuts this year have increased.
• Markets expect the Fed to start easing monetary policy in September.

In recent months, gold prices have risen, driven by strong investment demand in the over-the-counter market, continued buying by global central banks, and increased demand from Asia. Escalating tensions in the Middle East also continue to support the safe-haven appeal of gold. In the latest development, Israel deployed tanks into eastern Jabalia in northern Gaza on Sunday after a night of heavy airstrikes and ground fire.

On the front of factors influencing the gold market, the 10-year US Treasury yield started the week’s trading below 4.5% as traders eagerly await the release of key economic data. The focus will be on CPI and PPI data, as well as retail sales and industrial production figures, to gauge inflation and economic strength. In the meantime, investors will be paying close attention to comments from various Fed officials for clues about when the Fed may start cutting rates, particularly Fed Chairman Powell’s appearance at the annual general meeting of the Association of Foreign Banks in Amsterdam today, Tuesday.

Overall, comments made by several policymakers last week indicated that rates would remain high for some time. Furthermore, the odds for Fed easing in September are currently 61% and 74% for November.

Another factor affecting the gold market is that the US dollar index fell to 105 on Monday as investors await key US inflation data this week which could impact Fed monetary policy expectations. Last week, the index ended with modest gains as Fed officials urged caution before cutting rates. In this regard, Fed Governor Michelle Bowman said she did not expect it would be appropriate to cut rates in 2024, while Dallas Fed President Lorie Logan said it was still too early to think about cutting rates.

Meanwhile, data on Friday pointed to a jump in consumer inflation expectations, although a sharp decline in US consumer confidence added to evidence that the economy is losing momentum. Also, markets are still pricing in September as the start of the easing cycle. Concurrently, investors are now looking to April inflation data to further guide interest rate expectations.

Gold Price Forecast and Analysis Today:

The decline in gold prices is natural, and the overall trend remains upward. The retracement may provide opportunities to buy again, and currently, the nearest support levels for gold are $2318 and $2285 per ounce, respectively. Conversely, on the same time frame, the daily chart below indicates that returning to the resistance area at $2375 is crucial for bullish movement towards the psychological resistance at $2400 per ounce once more. Evidently, gold prices may continue to move within narrow ranges until reacting to US inflation figures and statements from Federal Reserve policymakers led by Jerome Powell.

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