Author Archive for InvestMacro

Trade Of The Week: EURCHF to challenge major resistance?

By ForexTime 

  • EURCHF bullish on D1/W1 charts
  • Big week for minor currency
  • Watch out for EU data + SNB decision
  • Key level of interest at 0.9640
  • Bloomberg model: 76% chance EURCHF – (0.95270 – 0.97098)

Our focus falls on the EURCHF which could be rocked by the EU data dump and Swiss National Bank (SNB) rate decision this week.

The minor currency pair remains bullish on the daily/weekly timeframe with prices approaching a key resistance level at 0.9700.

Note: The last time the EURCHF secured a weekly close above 0.9700 was back in July 2023.

With volatility likely to remain the name of the game for the EURCHF, a major breakout could be on the horizon.

Here are 3 factors to keep an eye on:

  1. SNB rate decision 

The SNB is widely expected to keep interest rates unchanged at 1.75% on Thursday. So, investors will direct their attention towards the policy statement, news conference, and CPI projections for clues on the central bank’s next move.

Given how economic growth held steady and 0.3% in Q4 and inflation edged down to 1.2% in February, the SNB is expected to move ahead with its first rate cut at the next policy meeting in June.

Traders are currently pricing in a 25% probability of a 25-basis point SNB cut in March with a cut fully priced in by June 2024.

  • The CHF could weaken if the SNB strikes a dovish note and signals that the next move will be a rate cut. Such an outcome may push the EURCHF higher.
  • Should the SNB sound more hawkish than expected and offer no fresh clues on rate cuts, this may support the Swiss Franc, dragging the EURCHF lower as a result.

 

  1. Key EU data 

This is a week packed with top-tier economic data from Europe which could impact bets around when the ECB will start cutting interest rates in 2024. 

On Monday, the Eurozone inflation in February was confirmed at 2.6% year-on-year, down from the 2.8% seen in January. While this was the lowest rate in three months, it’s still above the ECB’s target of 2%. It will be wise to keep a close eye on the Eurozone consumer confidence and PMIs along with top data on Germany, the largest economy in Europe.

Traders are currently pricing in an 80% probability of a 25-basis point ECB cut by June with a cut fully priced by July 2024. 

  • Should overall data from Europe support expectations around the ECB cutting interest rates by Summer, this is likely to weaken the euro – sending the EURCHF lower.
  • A positive set of economic reports that push back rate cut bets may support the EUR, sending the EURCHF towards the 0.9700 resistance.

 

  1. Technical forces

The EURCHF is respecting a bullish channel on the daily timeframe and trading above the 50, 100 and 200-day SMA.

  • A solid breakout and daily close above 0.9640 may open a path towards 0.9700 – a level not seen since July 2023.
  • Should prices slip below 0.9590, this could trigger a selloff towards the 200-day SMA at 0.9558 and 0.9530.

Bloomberg’s FX model points to a 76% chance that EURCHF will trade within the 0.95270 – 0.97098 range over the next week.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

US stock indices are under quarterly expiration pressure. The focus of attention this week is on central bank meetings

By JustMarkets

As of Friday’s stock market close, the Dow Jones Index (US30) decreased by 0.49% (for the week +0.12%). The S&P 500 Index (US500) lost 0.65% (for the week +0.10%). The NASDAQ Technology Index (US100) closed negative 0.96% (for the week -0.49%). Last week, the real estate, health care, and technology sectors were the biggest laggards, while energy, communication services, and commodities outperformed the market. The moves came as stronger-than-expected US inflation data raised concerns that the central bank may further delay interest rate cuts. The Fed had initially planned to start cutting rates in March, but that deadline was then pushed back to June and could now be pushed back even further. The rate is expected to remain at 5.5%, but the real factor could be the conference call after the meeting. If Powell begins to back away from cutting rates this summer, it could put further pressure on the indices.

Friday saw a huge quarterly derivatives expiration in the US market, accounting for $5.1 trillion in index and equity options. Since the consensus has been bullish in equities recently, market makers now have huge hedging long positions open in equities and indices. Once the derivatives expire, market makers will get rid of this hedge and thus put pressure on the stock market. Statistically, corrections in bull markets have often occurred in periods of quarterly expirations. Perhaps now it will help the indices to let off a little steam.

The Nvidia GTC developer conference, which begins today, will be closely watched in anticipation of announcements related to artificial intelligence. Investors will undoubtedly want to hear announcements that keep the company’s stock skyrocketing. CEO Jensen Huang will deliver the keynote address and possibly offer attendees a first look at its newest products, including the next-generation B100 GPU for artificial intelligence and high-performance computing applications. Nvidia’s stock gains over the past year have increased its market value by $1 trillion, putting it at the top of the S&P 500 Index.

In addition to the Fed meeting, internationally, investors’ attention this week will be focused on interest rate decisions from Japan, the UK, Australia, Brazil, Turkey, Switzerland, and Norway. In addition, inflation data from Canada, the UK, South Africa, and Japan will be the focus.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) was down 0.03% (for the week +1.39%), France’s CAC 40 (FR40) added 0.04% (for the week +2.24%) on Friday, Spain’s IBEX 35 (ES35) was up 1.02% (for the week +3.09%), and the UK’s FTSE 100 (UK100) closed negative 0.20% (for the week +0.88%).

Oil prices rose nearly 4% last week as the International Energy Agency released an optimistic demand outlook and predicted a small deficit this year. WTI crude prices rose above $81 a barrel on Monday, extending last week’s gains, as heightened geopolitical risks raise supply concerns. Ukraine has stepped up drone strikes on Russian refineries over the past week, shutting down about 7% of Russian refining capacity in the first quarter. Israeli Prime Minister Benjamin Netanyahu also said he would press ahead with plans to push into the Rafah enclave in the Gaza Strip, complicating the chances of a peace deal.

Silver prices climbed above the $25 an ounce mark on Friday and were up more than 4% for the week, driven by safe-haven demand as investors sought refuge from increased military and inflation risks. The latest US consumer price index and producer price index data came in stronger than expected. At the same time, geopolitical tensions on the global stage intensified after Russia moved its tactical nuclear weapons closer to NATO.

US natural gas prices fell below $1.7 per Mmbbl on Friday, marking a more than 6% decline for the week. This was driven by forecasts of mild weather that would reduce the demand for gas for heating. Despite the larger-than-expected withdrawals, the latest EIA data shows gas in storage is still 37.1 percent above average for this time of year.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was down 1.34% for the week, China’s FTSE China A50 (CHA50) was up 2.04% for the 5 trading days, Hong Kong’s Hang Seng (HK50) was up 1.86% for the week, and Australia’s ASX 200 (AU200) was negative 1.88%. Asian equity markets mostly rose on Monday as investors were cheered by better-than-expected Chinese retail sales and industrial production figures for the first two months of this year. However, China’s urban unemployment rate stood at 5.3% in January-February 2024, up from 5.1% in December. This is the highest rate since July last year.

The all-important Bank of Japan meeting will be held as early as tomorrow. Signs that employers are planning significant wage increases seem to have inclined the central bank to finally abandon the massive monetary easing that has been applied for years to stimulate growth in the country. The last time the rate was raised was 17 years ago. The current meeting has a 56% chance of a +10bp BoJ rate hike.

S&P 500 (US500) 5,117.09 −33.39 (−0.65%)

Dow Jones (US30) 38,714.77 −190.89 (−0.49%)

DAX (DE40) 17,936.65 −5.39 (−0.03%)

FTSE 100 (UK100) 7,727.42 −15.73 (−0.20%)

USD Index 103.45 +0.02 (+0.01%)

Important events today:
  • – China Industrial Production (m/m) at 04:00 (GMT+2);
  • – China Retail Sales (m/m) at 04:00 (GMT+2);
  • – China Unemployment Rate (m/m) at 04:00 (GMT+2);
  • – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+2);
  • – Eurozone Trade Balance (m/m) at 12:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

AUD/USD Stabilizes Amid Chinese Economic Data and US Inflation Concerns

By RoboForex Analytical Department

The Australian dollar has momentarily halted its downward trajectory against the US dollar, stabilizing around the 0.6565 mark. With a lack of significant domestic data from Australia, the AUD’s movements are largely influenced by the performance of the Chinese yuan and economic developments from China. Recently, the offshore yuan weakened to its lowest in a week at 7.2 against the US dollar, following a series of macroeconomic updates from China.

China’s industrial output showed an impressive year-on-year increase of 7.0%, exceeding both the anticipated 6.5% growth and the previous rate of 4.6%. Capital investment also outperformed expectations, registering a 4.2% year-on-year rise compared to the forecasted 3.2%. Retail sales growth in February was reported at 5.5% year-on-year, albeit a slowdown from January’s 7.4% increase. Additionally, the January employment report indicated a slight uptick in unemployment, rising to 5.3% from the prior 5.1%.

Despite these positive indicators from China, the yuan’s valuation remains pressured by robust US inflation data, which complicates the Federal Reserve’s pathway to easing monetary policy. The prevailing market expectation now leans towards a potential 25 basis point rate cut by the Fed in June, with around a 60% probability of this outcome, a shift from earlier predictions of a spring rate cut.

Given Australia’s close economic and trade ties with China, these statistics from China are particularly significant for the AUD’s performance.

Technical analysis of AUD/USD

The H4 chart analysis of AUD/USD indicates a consolidation phase around the 0.6570 level, with expectations of a downward breakout leading to the continuation of the decline towards the local target of 0.6506. After reaching this target, a potential corrective movement to 0.6570 (testing from below), followed by a further drop to 0.6477, is anticipated. The MACD indicator, with its signal line pointing downwards, supports this bearish scenario.

On the H1 chart, the AUD/USD pair has concluded its declining wave structure at 0.6570, with a consolidation phase currently observed around this mark. A downward breakout from this consolidation is expected today, aiming for the 0.6506 level. Upon achieving this target, the onset of a corrective phase to 0.6570 (testing from below) may be considered. The Stochastic oscillator, currently above 80 and poised to descend to 20, corroborates the likelihood of this continuation in the bearish trend.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Week Ahead: 5 stock indices to watch

By ForexTime 

  • RUS2000 braced for Fed
  • AU200 waits on RBA
  • JP225 breakout on horizon?
  • CN50 respects bullish channel
  • UK100 set for big move?

A wave of key central bank decisions may present fresh trading opportunities in the week ahead!

Watch out for the Federal Reserve (Fed), Bank of Japan (BoJ) and Bank of England (BoE) among other heavyweights:

Monday, 18th March  

  • CN50: China industrial production, retail sales, fixed assets
  • EUR: Eurozone CPI
  • JPY: Japan machinery orders

Tuesday, 19th March

  • AU200: RBA rate decision
  • JP225: BOJ rate decision
  • CAD: Canada CPI
  • EUR: Germany ZEW survey expectations

Wednesday, 20th March

  • CN50: China loan prime rates
  • EUR: Eurozone consumer confidence
  • GBP: UK CPI
  • RUS2000: Fed rate decision

Thursday, 21st March

  • AUD: Australia unemployment
  • JPY: Japan trade, Jibun Bank manufacturing PMI
  • UK100: BoE rate decision
  • CHF: SNB rate decision
  • EUR: Eurozone S&P Global PMI’s, Germany manufacturing PMI
  • USD: US conference Board leading index, initial jobless claims

Friday, 22nd March  

  • JPY: Japan CPI
  • NZD: New Zealand trade
  • CAD: Canada retail sales
  • EUR: Germany IFO business climate
  • USD: Atlanta Fed President Raphael Bostic speech

Our focus falls on 5 indices which could be rocked by 5 central bank announcements:

    1) RUS2000 braced for Fed

The RUS2000 which tracks the underlying Russell 2000 Index could see heightened levels of volatility due to the Fed rate decision.

This index is composed of smaller stocks that are more volatile compared to those in large-cap indexes.

In fact, since the start of H2 2023 the RUS2000 has shown the most sensitivity on Fed rate decision day when compared to the S&P500, Nasdaq 100, S&P400, and even Dow Jones!

Markets widely expect the Fed to leave rates unchanged in March, so much focus will be on the updated dot plot and Powell’s press conference for clues on rate cut timings.

Looking at technical prices are under pressure on the H4 charts with support found at 2015 and resistance around 2090.

    2) AU200 waits on RBA

Despite Friday’s rebound, the AU200 which tracks the underlying ASX 200 Index is en route to ending this week on a negative note.

Nevertheless, the index could be supported by the upcoming RBA meeting in the week ahead.

The central bank is expected to leave rates unchanged at 4.35% so it’s all about the policy statement for insight into the RBA’s next move. Ultimately, any hint around rate cuts down the road may keep the index buoyed.

Traders are currently pricing in a 64% probability of a 25 basis point RBA cut by June 2024.

Looking at the charts, a technical rebound could be brewing with a breakout above 7765 bringing bulls back into the game, opening a path back towards the all-time high.

    3) JP225 breakout on horizon?

Things could get wild for the JP225 as expectations mount around the BoJ ending its negative rates.

Note: The JP225 tracks the Nikkie 225 index and tends to weaken when the Yen strengthens, vice versa.

Markets are currently pricing in almost a 60% probability that the BoJ will scrap its negative rates next week, with the probability of a hike in April jumping to 70%.

Should the central bank make a move next week or confirm that rates will be hiked in April, this may trigger a potential breakout on the JP225. Focusing on the charts, support can be found at 38300 and resistance at 39250.

 

    4) CN50 respects bullish channel

It is a big week for the CN50 due to key economic indicators from China and the loan prime rate decision from Chinese banks which is announced by the PBoC. The CN50 tracks the benchmark FTSE China A50 Index and has gained over 14% since the low back in January 2024.

Note: China’s central bank left its key policy rates unchanged today.

The index is likely to be influenced not only by fundamental forces but technical factors. Prices are bullish with further upside on the cards beyond 12240.

 

    5) UK100 set for big move?

After swinging within a range on the weekly charts, the UK100 which tracks the underlying FTSE100 index could be preparing for a breakout.

This may be triggered by the incoming UK inflation data and BoE rate decision in the week ahead.

Markets widely expect the BoE to leave interest rates unchanged at 5.25% for the fifth straight meeting, so all attention will be on the policy statement and how many MPC members voted to cut rates. Given how this event is likely to impact the pound, it may be reflected in the UK100.

Note: When the pound appreciates, it results in lower revenues for FTSE100 companies that acquire sales from overseas, pulling the UK100 lower as a result. The same is true vice versa.

Regarding the charts, a solid weekly close above 7740 could open a path back towards 7930. Should this level prove to be reliable resistance, prices may slip back towards 7575.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

This Copper Co. May Be a Perfect Proxy for 2024 Metals Advances, Expert Says

Source: Michael Ballanger  (3/14/24)

Michael Ballanger of GGM Advisory Inc. shares his take on the current copper market, as well as a few copper stock recommendations.

Copper prices rocketed up and through the $4.00/lb. level yesterday morning, sending Freeport-McMoRan Inc. (FCX:NYSE) to a new reaction high at $42.50 and the June $40 calls to $4.74.

The 52-week high at $44.70 gives way to the all-time high just above $50. Freeport-McMoRan has huge copper operations, plus the mighty Grasberg mine in Indonesia, which has the world’s largest copper and gold reserves.

With copper and gold both breaking out in recent days, FCX is a perfect proxy for 2024 metals advances.

  • Minor resistance was at $42
  • Next stop $44.70
  • Then $50

I see a $6-8/lb. copper price by year-end, which means prices are much higher for FCX.

My junior copper list focuses on:

  • Fitzroy Minerals Inc. (FTZ:TSX.V; FTZFF:OTCQB) (CA$0.19 / US$0.14)
  • American Eagle Gold Corp. (AE:TSXV) (CA$0.62 / US$0.46)
  • Sprott Junior Copper Miners ETF (COPJ:NASDAQ) (US$19.76)

Copper just traded at $4.0393/lb. Escape velocity achieved!

 

Important Disclosures:

  1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Fitzroy Minerals Inc. and American Eagle Gold Corp.
  2. Michael Ballanger: I, or members of my immediate household or family, own securities of: All. My company has a financial relationship with Fitzroy Minerals Inc. I determined which companies would be included in this article based on my research and understanding of the sector.
  3. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found  below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
  4.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

For additional disclosures, please click here.

Michael Ballanger Disclosures

This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

Rising US producer inflation may reduce the number of scheduled Fed rate cuts

By JustMarkets

As of Thursday’s stock market close, the Dow Jones Index (US30) was down 0.35%, the S&P 500 Index (US500) decreased by 0.29%, and the NASDAQ Technology Index (US100) closed negative 0.30%.

The US weekly initial jobless claims fell by 1,000 to 209,000, indicating a stronger labor market than expectations of a rise to 218,000. Thursday’s US retail sales report for February 0.6% m/m was weaker than market expectations of 0.8%, while the January figure was revised downward to 1.1% m/m from 0.8%. The February PPI reading of 1.6% y/y was stronger than market expectations of 1.2% and exceeded the revised January reading of 1.0% y/y (preliminary 0.9%). However, February core PPI fell to a 2-year low of 3.8% y/y. Either way, February’s core CPI and PPI remain above the Fed’s 2% inflation target.

After the release of macro statistics, UST yields started to rise, and stock indices were corrected. Investors fear that amid high inflation, the Fed may reduce the number of scheduled rate cuts this year from three to two. So far, this is unlikely, but any hints from Mr. Powell on this trend at the upcoming meeting may trigger the beginning of a correction in the indices.

Shares of Tesla (TSLA) closed 4.12% lower, adding 4.81% to Wednesday’s losses. UBS lowered its price target for Tesla on Thursday from $165 to $225 but maintained a neutral rating. The bearish sentiment on TSLA has persisted since Wednesday, when Wells Fargo downgraded Tesla to “underweight” from “equal-weight” due to its view that electric vehicle sales will remain flat in 2024 and decline in 2025.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) was down 0.11%, France’s CAC 40 (FR40) added 0.29%, Spain’s IBEX 35 (ES35) lost 0.66%, and the UK’s FTSE 100 (UK100) closed negative 0.37%.

ECB Governing Council spokesman Stournaras said on Thursday that he favors two interest rate cuts before the ECB’s August break and two more before the end of the year. He also said a rate cut in June is more likely than one in April. Swaps estimate the odds of a 25 bps ECB rate cut at 10% at the next meeting on April 11 and 90% at the next meeting on June 6. In Europe today, investors will assess final inflation data in France and Italy.

Oil prices rose because of an IEA report released on Thursday that said oil markets will face a supply shortage by the end of this year due to OPEC+ production cuts. On Thursday, the International Energy Agency (IEA) predicted that global oil markets would be in deficit by the end of 2024 if OPEC+ maintained its current production cuts. However, the balance would become a surplus if OPEC+ started pumping more oil. OPEC+ will meet on June 1 to decide on production levels for the second half 2024.

Natural gas prices rose Thursday after the EIA’s weekly report showed US gas inventories fell by 9 billion cubic feet, which was higher than market expectations of 2 billion cubic feet. Natural gas prices are also under pressure after the Freeport LNG natural gas export terminal in Texas shut down one of three production units on March 1 due to damage caused by freezing weather in Texas. The unit is scheduled to resume operations this week.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.29% on the day, China’s FTSE China A50 (CHA50) declined 0.23%, Hong Kong’s Hang Seng (HK50) gained 0.71% on Thursday, and Australia’s ASX 200 (AU200) was positive 0.20%.

Major Japanese companies have already agreed to meet union demands for wage increases. This raises the possibility that the central bank (BoJ) could exit its negative interest rate policy as early as next week due to rising wages, high inflation, and a stable economy.

Australia’s economy grew less than expected in the fourth quarter, supporting bets that the Reserve Bank of Australia (RBA) may start cutting rates this year. Markets currently estimate a 70% probability of the RBA starting to cut the money rate in August, with 40 basis points of easing this year.

The National Bureau of Statistics released Chinese house price data for February for a sample of 70 cities, which showed continued price declines in line with expectations. Average primary market prices fell 0.36% month-over-month, while average secondary market prices fell 0.62% month-over-month. Both figures were similar to the January decline.

S&P 500 (US500) 5,150.48 −14.83 (−0.29%)

Dow Jones (US30) 38,905.66 −137.66 (−0.35%)

DAX (DE40) 17,942.04 −19.34 (−0.11%)

FTSE 100 (UK100) 7,743.15 −29.02 (−0.37%)

USD Index 103.36 +0.57 (+0.55%)

Important events today:
  • – US NY Empire State Manufacturing Index (m/m) at 14:30 (GMT+2);
  • – US Industrial Production (m/m) at 15:15 (GMT+2);
  • – US Michigan Consumer Sentiment (m/m) at 16:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Yen Weakens Despite Japan’s Deflation Exit

By RoboForex Analytical Department

The USD/JPY pair is rising, reaching 148.28 on Friday. The US dollar is strengthening across the market following the release of US retail sales data.

This information is prompting market participants to reassess their expectations for the future of the US Federal Reserve’s interest rate policy. The Fed could interpret strong retail sales as a significant inflationary factor, potentially delaying the timing of any rate cut.

On Friday, Japan’s Finance Minister Shunichi Suzuki stated that the Japanese economy is no longer suffering from deflation, as there is a strong trend towards wage growth. This statement is particularly noteworthy as previous comments from officials, including the Prime Minister, suggested the country had yet to fully emerge from a deflationary state.

According to Suzuki, the government has mobilised all efforts to support this wage growth trend.

The next Bank of Japan (BoJ) meeting is scheduled for next week, and high expectations surround its outcome. The interest rate could finally move out of negative territory, currently at -0.1% annually. The BoJ remains the only major central bank that maintains negative borrowing costs.

Technical Analysis of USDJPY

On the H4 chart, USDJPY has completed a growth wave to 148.64. Today, we consider the likelihood of forming a consolidation range below this level. Exiting upwards from this range could open the potential for a growth wave to 149.20, with the trend possibly continuing to 150.00. The MACD oscillator confirms this scenario, with its signal line breaking above zero and aiming for new highs.

On the H1 chart, USDJPY is forming a consolidation range around 148.22. We expect an upward exit from this range and the continuation of the growth wave to 149.20. Following the completion of this level, a correction back to 148.22 (testing from above) is possible. Subsequently, the growth is expected to reach the main target of the wave at 150.00. The Stochastic oscillator supports this scenario, with its signal line above the 20 mark and ready to move towards 80.

 

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Silver prices have reached a one-year high. Oil is growing amid a decline in inventories

By JustMarkets

At Wednesday’s close of the stock market, the Dow Jones Index (US30) was up 0.09%. The S&P 500 Index (US500) decreased by 0.19%. The NASDAQ Technology Index (US100) closed negative 0.54%. The Dow Jones Industrials Index received support from companies such as 3M (MMM) with a gain of 5.42%, as well as Chevron (CVX), Caterpillar (CAT), Home Depot (HD), NIKE (NKE), Goldman Sachs (GS) and Coca Cola (KO) with gains of more than 1%.

Fed Chairman Powell said last week that the Fed is “not far” from being confident enough to cut interest rates. However, markets rate the Fed’s probability of cutting interest rates at its meeting next week as near zero, as inflation is still too far above target. Markets estimate the odds of a 25 bps rate cut at next week’s March 20 FOMC meeting at 1%, the May 1 meeting at 13%, and the June 12 meeting at 73%.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) was down 0.02%, France’s CAC 40 (FR40) added 0.62%, Spain’s IBEX 35 (ES35) index increased by 1.65%, and the UK’s FTSE 100 (UK100) closed positive 0.31%. The FTSE Index closed at 7,772 on Wednesday, the highest in ten months and marking the third consecutive session of gains. Market sentiment was driven by positive economic data that boosted hopes that the UK is recovering. UK Gross Domestic Product rose by 0.2% month-on-month in January, driven by strong retail and house-building performance.

ECB council spokesman Martins Kazaks said Wednesday that rate cuts could come within the next few meetings. His counterpart, Bank of France Governor Francois Villeroy de Galhau, said the ECB’s first rate cut is more likely in June than April.

WTI crude oil prices rose to $80 a barrel on Thursday, extending gains from the previous session, as an unexpected drop in US crude inventories signaled strong demand in the world’s top oil consumer. EIA data showed US crude inventories fell by 1.536 million barrels last week, contradicting expectations of a 1.338 million barrel increase. It was the first decline in seven weeks, confirming industry data reported Tuesday by API. In addition, the report noted a decline in inventories at the Cushing hub in Oklahoma and a decrease in gasoline inventories.

Silver prices (XAGUSD) rose to $24.7 an ounce, the highest since early December. They followed gains in other precious metals amid growing expectations that major central banks will soon start cutting interest rates. The Fed and ECB are expected to begin easing monetary policy in June, while the Bank of England will likely make its first rate cut in August.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was down 0.26% on the day, China’s FTSE China A50 (CHA50) was up 0.89%, Hong Kong’s Hang Seng (HK50) lost 0.07% on Wednesday, and Australia’s ASX 200 (AU200) was positive 0.22%. The Hang Seng Index (HK50) moved further away from the 3-month highs reached earlier in the week after Wall Street fell from recent highs overnight due to losses in chipmaker stocks, and market participants were wary of new key US economic data ahead of next week’s FOMC meeting.

The US House of Representatives passed a landmark bill that gives Chinese TikTok owner ByteDance six months to sell a controlling stake or the app will be blocked in the US.

Investors remain cautious amid growing speculation that the Bank of Japan (BoJ) could adjust its monetary policy as early as next week due to rising wages, inflation, and a strong economy. The country also concluded this year’s spring wage talks on Wednesday, with several major Japanese companies agreeing to solid wage increases.

S&P 500 (US500) 5,165.31 −9.96 (−0.19%)

Dow Jones (US30) 39,043.32 +37.83 (+0.097%)

DAX (DE40) 17,961.38 −3.73 (−0.021%)

FTSE 100 (UK100) 7,772.17 +24.36 (+0.31%)

USD Index 102.80 -0.16 (-0.16%)

Important events today:
  • – Switzerland Producer Price Index (m/m) at 09:30 (GMT+2);
  • – US Producer Price Index (m/m) at 14:30 (GMT+2);
  • – US Retail Sales (m/m) at 14:30 (GMT+2);
  • – US Initial Jobless Claims (w/w) at 14:30 (GMT+2);
  • – US Natural Gas Storage (w/w) at 16:30 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Target Thursdays: USDJPY, Silver & Crude reach targets!

By ForexTime

Check out these potential profits that you may have missed from our Daily Market Analysis.

  • USDJPY bulls lock in 80 pips
  • Silver up almost 3% this week
  • Crude hits all bullish targets   

 

    1) USDJPY rebound lends bulls support

  • Where and when was Target Price (TP) published?

In our Trade of The Week article on Monday 11th March:

We cautioned around the possibility of a “technical rebound” and highlighted how the USDJPY’s “14-day relative strength index (RSI) was already flirting with the 30 level”.

Note: When the 14-day RSI hits or goes below 30, this signals that prices are oversold.  

 

  • What happened since TP was published?

After failing to push lower, the USDJPY experienced a technical rebound on Tuesday thanks to the hotter-than-expected US inflation data.

This report cooled hopes around the Fed cutting interest rates in the coming months, boosting this dollar – which sent the USDJPY higher as a result.

Prices shot past the 147.20 resistance with the momentum briefly taking the currency pair above 148.00.

 

  • How much in potential profits?

Traders who took advantage of the breakout above 147.20 and exited at 148.00 would have been rewarded with 80 pips.

Note: The USDJPY could be injected with fresh volatility on Friday due to the results of Japan’s wage negotiations.

 

    2) Silver hits fresh 2024 high

  • Where and when was Target Price (TP) published?

In our article covering Silver on Wednesday, March 13th we maintained a bullish outlook for the precious metal due to technical forces.

“Silver is currently in a daily uptrend after breaking out of a ranging period…, if the price reaches the $24.676 level, a long scenario becomes feasible.”

 

  • What happened since TP was published?

Silver prices rallied higher, hitting a fresh 2024 high above $25 and gaining almost 3% since the start of the week.

 

  • How much in potential profits?

440 points for traders who bought silver at $24.676 and locked in profits at the second bullish price target at $25.116.

 

    3) Crude bulls enter the scene

  • Where and when was Target Price (TP) published?

This technical scenario (Crude) is based on the FXTM Signals that are posted twice a day (before the London and New York sessions) for all FXTM clients to follow.

It can be found in the MyFXTM profile under Trading Services… FXTM Trading Signals.

 

  • What happened since TP was published?

Oil prices initially rallied on Wednesday due to a surprise drop in U.S crude stockpiles and geopolitical risks concerning Ukraine/Russia.

The global commodity extended gains this morning (Thursday) after the International Energy Agency warned of a supply deficit throughout 2024.

 

  • How much in potential profits?

Crude has hit all its profit targets.

Traders who entered at $79.49 and exited at the final target level of $79.83 would have gained 34 points.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Robo-advisers are here – the pros and cons of using AI in investing

By Laurence Jones, Bangor University and Heather He, Bangor University 

Artificial intelligence (AI) is shaking up the way we invest our money. Gone are the days when complex tools were reserved for the wealthy or financial institutions.

AI-powered robo-advisers, such as Betterment and Vanguard in the US, and finance app Revolut in Europe, are now democratising investment. These tools are making professional financial insight and portfolio management available to everyone. But although there are plenty of advantages to using robo-advisers, there are downsides too.

Since the 1990s, AI’s role in this sector was typically confined to algorithmic trading and quantitative strategies. These rely on advanced mathematical models to predict stock market movements and trade at lightning speed, far exceeding the capabilities of human traders.

But that laid the groundwork for more advanced applications. And AI has now evolved to handle data analysis, predict trends and personalise investment strategies. Unlike traditional investment tools, robo-advisers are more accessible, making them ideal for a new generation of investors.

A survey published in 2023 showed that there has been a particular surge in young people using robo-advisers. Some 31% of gen Zs (born after 2000) and 20% of millennials (born between 1980 and 2000) are using robo-advisers.

Another survey from 2022 found that 63% of US consumers were open to using a robo-adviser to manage their investments. In fact, projections indicate that assets managed by robo-advisers will reach US$1.8 trillion (£1.4 trillion) globally in 2024.

This trend reflects not only changing investor preferences but also how the financial industry is adapting to technology.

Tailored advice

AI can tailor investment advice to a person’s preferences. For example, for investors who want to prioritise ethical investing in environmental, social and governance stocks, AI can tailor a strategy without the need to pay for a financial adviser.

AI can analyse news and social media to understand market trends and predict potential movements, offering insights into potential market movements. Portfolios built by robo-advisers may also be more resilient during market downturns, effectively managing risk and protecting investments.

Robo-advisers can offer certain features like reduced investment account minimums and lower fees, which make services more accessible than in the past. Other features such as tax-loss harvesting, a strategy of selling assets at a loss to reduce taxes, and periodic rebalancing, which involves adjusting the proportions of different types of investments, make professional investment advice accessible to a wider audience.

These types of innovations are particularly beneficial for people in underserved communities or with limited financial resources. This has the potential to improve financial literacy through empowering people to make better financial decisions.

AI’s multifaced role

AI’s impact on investment fund management goes way beyond robo-advisers, however. Fund managers are using AI algorithms in a variety of ways.

In terms of data analysis, AI can sift through vast amounts of market data and historical trends to identify ideal assets and adjust portfolios in real time as markets fluctuate. AI is also used to improve risk management by analysing complex data and making sophisticated decisions.

By using AI in this way, traders can react and make faster decisions, which maximises efficiency. Other mundane tasks like compliance monitoring are increasingly automated by AI. This frees fund managers up to focus on more strategic decisions.

What are the disadvantages?

One of the biggest concerns regarding AI in this sector is based on how having easy access to advanced investment tools may lead some people to overestimate their abilities and take too many financial risks. The sophisticated algorithms used by robo-investors can be opaque, which makes it difficult for some investors to fully understand the potential risks involved.

Another concern is how the evolution of robo-advisers has outpaced the implementation of laws and regulations. That could expose investors to financial risks and a lack of legal protection. This is an issue yet to be adequately addressed by financial authorities.

Looking ahead, the future of investment probably lies in a hybrid model. Combining the precision and efficiency of AI with the experience and oversight of human investors is vital.

Ensuring that information is accessible and transparent will be crucial for fostering a more informed and responsible investment landscape. By harnessing the power of AI responsibly, we can create a financial future that benefits everyone.The Conversation

About the Author:

Laurence Jones, Lecturer in Finance, Bangor University and Heather He, Lecturer in Data Science/Analytics, Bangor University

This article is republished from The Conversation under a Creative Commons license. Read the original article.