Wed. Oct 27th, 2021

Hello and welcome to next week’s Key To Markets preview.

If you have any questions about this information, please contact your KTM Account Manager who will be happy to help.

Contents

  • Currency pair yield
  • 10 great stories last week
  • Graph of the week
  • Highlights of the economic calendar
  • 5 things to see this week
  • Technical analysis: EUR / USD GBP / USD | USD / JPY | AUD / USD | Or | Oli | S&P 500 | DAX
  • Trading signals

Currency pair yield

Representation of 5 days from the June 24, 2021. 20:00 GMT

Source: finviz.com


10 great stories last week

In case you missed it….

Delta variant. The new strain of COVID-19 from India threatens European reopening, with the UK listing it as the reason to extend its blockade for another 4 weeks.

Withdrawal of the dollar. The major currency pairs rallied as the US dollar returned some of its post-Fed gains. Numerous Fed speakers backed the “falconry” FOMC meeting that sparked the recovery of the dollar.

Inflation in the 1970s “is very unlikelyFed Chairman Jerome Powell told the U.S. Congress that the current price jump is due to temporary supply bottlenecks.

Bitcoin under $ 30,000. The largest cryptocurrency by market capitalization reached $ 28,000 before investing rapidly on the rise. Many have called the 30k level a “line in the sand” for the bullish market.

Nasdaq sets a new record. Technology stocks rose and the Dow Jones had its best day since March, as investors bought the fall after the worst weekly fall since October.

Brent crude reaches $ 75 per barrel. Oil traders have been bullish following declining U.S. inventories as travel resumes ahead of this week’s OPEC + meeting.

Amazon Prime Day sales hit a new record, up 6% from 2020 levels as consumers continue to shift their online purchases, even as brick-and-mortar stores reopened after closing.

Retail investors participate. Retailers now account for 20% of U.S. daily market turnover, more than double what it was a decade ago.

Cathie Wood bought BTC. The famed technology investor took advantage of the 50% + drop and doubled its bullish Bitcoin bet with an additional million shares of the Grayscale Bitcoin Trust.

John McAfee died in Spanish prison. The legendary crypto software engineer and enthusiast was found dead in his prison cell, hours after his extradition to the United States was approved in Spain.


Graph of the week

Source: LPL Research

A comparison of the current stock market rally with previous “strong starts” with a bullish market in 1982 and after the financial crisis of 2009 shows that a larger correction of the S&P 500 is far behind. Choosing the top of the stock market is a task, but understanding the big picture that such gains have been historically unsustainable should play an important role in your trading and investment plan.


Highlights of the economic calendar

Source: FX Street


5 things to see this week

The Federal Reserve has just told us that it will adjust its policy to suit the data, so we do what they do, and we’ll see the biggest data point of the month. Growth, jobs and inflation have been warmer than expected by the Fed, so they duly advanced their projected times to reduce QE and for the first rate hike. If the data continues to improve, we would be right to assume that the Fed’s timeline could be even shorter.

Reuters reports suggest Moscow is pushing to further cut production cuts from August. Russia has been trying to withdraw from production quotas for months, but Saudi Arabia has been more conservative, preferring a slower production expansion due to uncertainty surrounding the pandemic and economic reopening. With Brent crude in the two-year highs at $ 75 a barrel, the weight of the tests is on the Russians.

Time passes quickly, even with blocking. Thursday will be the first of July and the first day of the third quarter of 2021. The timing of the Fed meeting and the resulting consequences suggest that repositioning at the end of the quarter and the portfolio showcase may have already taken place. Window dressing is when fund managers buy high-yield shares just before they have to report their holdings to investors so that their stock selection is better than it really was.

Much emphasis has been placed on high inflation data in the United States. But what about the pond? This week, Germany and the Eurozone publish CPI data. If the figures exceed expectations, pressure on the ECB will begin to rise. Christine Lagarde and the company have so far dismissed the “reduced talks” due to the dullest European inflation. This only works if the data is muted.

True, scientists have already discovered a “variant of the variant” that – you guessed it – could be even more transmissible and deadly. Unfortunately, it could mean a third wave that would cross India in the coming weeks. While we are at RoW, we continue to observe the Delta variant for the increase in covid cases and hospitalizations and what this means for government policy. Portugal’s local governments, including Lisbon, have already tightened restrictions in response; this is a move by the UK that has just slowed its slackening.


Technical analysis

Here you can find analysis of the main asset classes, including the major forex, gold, oil, S&P 500 and Germany’s DAX index.

EUR / USD (H4 candlestick chart)

The EUR / USD is recovering some of its losses from 16/17 June and the setback could be about to end. The strong break below the 1.21 support has reversed the bearish trend.

GBP / USD (H4 candlestick chart)

The GBP / USD is down 1.40, as is the 61.8% Fibonacci retracement of its sharp decline on 16/17 June. The broader bearish trend remains in play as long as the price is below 1.41.

USD / JPY (H4 candlestick chart)

The USD / JPY remains on a turbulent upward trend, but has failed in two attempts to surpass 111, hitting the March 31 high. A break above 111 would open a new long-term uptrend.

AUD / USD (H4 candlestick chart)

AUD / USD tests the level of 0.76 as resistance to the price rebound as it fell below 0.75. The broader trend remains bearish, below 0.765.

USD / CAD (H4 chandelier chart)

The USD / CAD has retreated from a high above 1,248 and has so far stopped at 1,225 with a decline above 1.23. The uptrend continues in play as it is above 1.22

Gold (H4 chandelier chart)

The fall below 1855 has turned gold into a downward trend. The price consolidates near the lows at $ 1760. A break above the highs in 1795 could lead it to the supply zone around 1820.

Brent Oil (H4 chandelier chart)

Brent crude has hit the big round of $ 75, but so far no major level sales have taken place. Having broken and maintained the resistance of 74.35, it seems likely that there will be more rise.

500 US (H4 chandelier chart)

The US500 has recovered its full decline from June 16/17 and is at record highs. If held, the break means that the upper double pattern has been canceled.


Trade alerts

You can set up price alerts on the MT4 platform in the potential support and resistance areas shown in the charts above to inform you when there could be a potential trading opportunity.

See the table below for possible alerts to use this week.

From the MT4 platform you can enable push notifications to receive these alerts on your mobile phone.

Thank you so much for reading and have a great week negotiating.

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