Articles

Polkadot price keeps support structure, targets $32

January 22, 2022 06:29   FXStreet   Market News  

  • Polkadot price pushed to five-month and 2022 lows.
  • DOT enters a supportive buy zone.
  • Powerful bullish reversal pattern on the Point and Figure chart is now active.

Polkadot price has come a long way since its all-time high, trading nearly 61% below the all-time high in under three months. Unfortunately, this week’s price action added a considerable amount to that loss, with a drop nearing a 25% weekly loss. However, support is likely coming in soon.

Polkadot price creates a rare and powerful bullish reversal signal

Polkadot price has a very exciting and bullish development on its Point and Figure chart, despite the current bearish sentiment. In Point and Figure analysis, two primary patterns signal bearish extremes. The first is a bearish Spike Pattern – any column with fifteen or more Os. The second is a Bearish Shakeout.

A Bearish Shakeout pattern occurs at the beginning of an uptrend but initially acts as a short signal. The Bearish Shakeout requires a multiple-bottom followed by at least two, but no more than three Os below the multiple bottom. Polkadot price has fulfilled this pattern.

A phenomenal hypothetical long setup now exists with a buy stop order at $30, a stop loss at $22, and a profit target at $82. This trade represents a 6.5:1 reward/risk setup with an implied profit target of 200% from the entry. The probability of a profit target so far from the entry getting hit is low, but the range should give traders an idea of how expansive the move higher can be. A three-box trailing stop would protect, and profit made post entry.

DOT/USDT $2.00/3-box Reversal Point and Figure Chart

There is no invalidation level for the buy entry on this hypothetical long setup. Because it is also a Spike Pattern, the entry is always on the three-box reversal no matter how low it moves.

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Forexlive Americas FX news wrap: Stocks get hammered & close near session lows for 3rd day

January 22, 2022 05:56   Forexlive Latest News   Market News  

How can you not start the end of day and week summary by not speaking to the beating the US stocks took.

For the 3rd day in a row the major indices are closing at or near their lows. The Dow and S&P had their worst week since October 20, 2020 (the Dow fell 1600 points or -4.57%). The S&P fell -5.68% on the week..

The Russell 2000 closed at its 52 week low.

The NASDAQ index is down 15.1% from its all-time high reached in November and is trading at its lowest level since June 2021. For the week the NASDAQ fell -7.53%

Technical levels were broken with the 200 day moving average breached in all three major indices.

The stock market was the focus this week, and with the earnings calendar just getting underway (with largely disappointments from the financials and Netflix so far), one has the wonder will it get any better?

By the way, the Fed is on tap for their rate announcement on Wednesday. The chatter is centered on whether they speed up the taper so that they could be in position to tighten policy quicker. The Fed is behind the curve with regard to its inflation mandate although the yield curve has done some of the tightening already. Nevertheless the Fed is still buying bonds and mortgage-backed securities (which does not make sense).

It is always darkest before getting pitch black, but the optics are certainly not great.

In other markets:

  • Spot gold is trading down $7.70 at $1831.20. For the week, the the price is up $14 after closing last week around $1817. The high price reached $1847.94 on Thursday. The low price was at $1805.78 on Tuesday.
  • Crude oil is trading down $0.78 at $84.75. The high for the week reached $87.10 on Thursday the low was today at $82.78 before rebounding back higher into the close. For the week, the inventory data this week showed builds in crude and gasoline stocks.

In the US debt market,

  • The 10 year yield reach day high of 1.902% on Wednesday. Last week the yield closed at 1.788%. The current yield is at 1.758% which is down three basis points from last week’s close. The run to the upside earlier this week got the bears going in the stock market. Since peaking however, and coming down, the stocks have divorced themselves from the bond market as traders become more focused on how higher inflation will lead to a tighter Fed will turn lead to lower growth and lower stock prices.
  • The two year yield is trading at 1.004% after reaching its Wednesday high at 1.076%. Last Friday the two year yield closed at 0.969% so yields are higher in that part of the yield curve.

For the day, the change in yields shows the following:

US yields
US yields move lower on expectations of lower growth

How did the volatility in the market play out in the forex market today?

The CHF and JPY attracted the safe haven money today, while the AUD, CAD and NZD so risk off flows exit those currencies. The USD was caught between those flows and is ending the session mixed.

forex
The USD is ending the session mixed

Some technical levels in play for next week:

  • EURUSD: The EURUSD had one quick look above it’s falling 100 hour MA today. That MA comes in at 1.1348 (and moving lower). The price is just below it at 1.1342. For the week, the EURUSD is down from the last Friday closing level of 1.1414.
  • GBPUSD: The GBPUSD moved closer to its 100 day MA today (at 1.3539). The low today reached 1.35446. Next week, that MA will be a barometer for buyers and sellers.
  • USDJPY: The USDJPY held a swing low area between 113.58 and 113.629. The price is trading at 113.68 going into the weekend. The swing level will be its barometer for buyers and sellers in the new trading week.
  • USDCAD: The USDCAD stretch to the highest level since January 11and also to the 38.2% retracement of the move down from the January high to the January low at 1.25871. The price currently trading at 1.2580, a few pips below that retracement level. Move higher in the new trading week would have traders looking toward the 100 day moving average at 1.26182. The price move below the 100 day moving average on January 11. A move back above give the buyers something to shout about.
  • AUDUSD: The AUDUSD is trading near session lows for the week in what was an up and down week. The low price was reached on Tuesday at 0.7169. The high price was reached on Thursday at 0.7276. That was just short of its 100 day moving average at 0.7277. Yesterday and today, the price retraced nearly the entire move with the price low reaching 0.71709. Moving below the 0.7169 level would increase the bearish bias, while holding support could see a rotation back up (why not?)

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AUD/USD Weekly Forecast: Unreliably optimistic Australian data hides a nearby crisis

January 22, 2022 05:26   FXStreet   Market News  

  • Australian employment and inflation figures beat expectations in December.
  • The focus now shifts to the US Federal Reserve and upcoming rate hikes in the US.
  • AUD/USD may shortly resume its long term decline, according to technical readings.

The AUD/USD pair is trading below 0.7200 heading into the close, unchanged for the week. The pair peaked at 0.7276 on Thursday, helped by encouraging Australian data that, nevertheless, fell short of overshadowing the greenback’s renewed bout of demand.

Risk aversion and soaring yields

Risk-related sentiment was sour throughout the week, as market participants became increasingly concerned about slowing economic progress in a rising inflation scenario, or stagflation. Global indexes came under pressure, with Wall Street finishing the week with substantial losses. Gold prices, on the other hand, jumped to fresh two-month highs, retaining gains at the end of the week as per trading at around $1,840 a troy ounce.

Finally, government bond yields soared, unusual behaviour in a climate of risk-off, but quite a normal one since 2021, as stagflation spreads globally. The economic recovery slowed amid the spread of Omicron, while employment figures began to disappoint for the same reason. Price pressures remained unchanged, with most developed countries seeing inflation reach multi-decade highs.

Australian data released these days hides the fact the country is also heading into stagflation, just because it took longer to put the machine in motion. Australia has had lockdowns through most of 2021 and has only just begun reopenings by the end of the year. That’s why it is experiencing a “boom,” with outstanding job creation in November, followed by an upbeat December report released this week. The country added 64.8K positions in the month, more than doubling the market’s expectations. The Unemployment Rate contracted to 4.2%, much better than the 4.5% expected, while the Participation Rate remained steady at 66.1%.

Additionally, January Consumer Inflation Expectations contracted to 4.4% from 4.8% previously, not bad news at all. However, it is yet to be seen if the country will be able to sustain steady job creation and inflation within decent levels.

Busy calendar ahead

As opposed to what was seen in the last few days, the upcoming week will be a busy one in terms of macroeconomic releases. On Monday, it will be the turn of the preliminary estimates of January PMIs for both economies, while Australia will release December NAB’s Business Confidence and the Q4 Consumer Price Index on Tuesday. Later in the week, the country will offer the December Westpac Leading Index and the Q4 Producer Price Index.

The US Federal Reserve will announce its decision on monetary policy on January 26. No action is expected at this time, although market participants are hoping for clearer hints about upcoming rate hikes. Investors are pricing in a first rate hike for March 2022 and at least three hikes through the year. Also, the country will publish the first estimate of Q4 Gross Domestic Product,  foreseen at 5.8% QoQ, and December Durable Goods Orders. At the end of the week, the US will release the Core Personal Expenditures Price Index, the Fed’s favourite inflation measure.

AUD/USD technical outlook

The weekly chart for the AUD/USD pair shows that it remains trapped between directionless moving averages, with a bearish 20 SMA capping the upside. The Momentum indicator is heading south within negative levels, while the RSI indicator is consolidating around 45, skewing the risk to the downside. Additionally, the pair is battling around the 38.2% retracement of its 0.7555/0.6992 decline.

The daily chart offers a neutral-to-bearish stance. A mildly bearish 100 SMA is converging with the 50% retracement of the mentioned decline at 0.7275 providing resistance, while the pair is trading below a flat 20 SMA. In the meantime, technical indicators seesaw around their midlines, lacking directional strength.

Bulls may take over on a break above the aforementioned 0.7275 level, with the next relevant level at 0.7340, the 61.8% retracement of the same slide. Beyond the latter, the pair may extend its rally up to the 0.7400 region. Below 0.7130, the risk should turn to the downside, with scope for a test of the 0.7000 threshold.

AUD/USD sentiment poll

The FXStreet Forecast Poll hints at further declines for AUD/USD. Bears are a majority in the three time-frame under study, although they decrease as time goes by, and only in the weekly view they reach 50% of the polled experts. On average, the pair is seen stable at around 0.7190 in the next three months.

The Overview chart replicates the neutral stance, although the near-term moving average ticks lower, which may spur some selling next week and see some long-term position readjustments in the next one. Worth noting that in the quarterly perspective,  the number of those looking for lower lows sub-0.7000 continues to rise.

Related Forecasts: 

EUR/USD Weekly Forecast: Federal Reserve between a rock and a hard place

Gold Weekly Forecast: XAU/USD could turn south on a hawkish Fed surprise

GBP/USD Weekly Forecast: Sterling set rebound with help from the Fed, ignoring Boris’ travails

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United States Baker Hughes US Oil Rig Count declined to 491 from previous 492

January 22, 2022 05:21   FXStreet   Market News  

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Another bloodbath as the S&P 500 closes below the 200-DMA Worst week since March 2020

January 22, 2022 05:17   Forexlive Latest News   Market News  

The 200-day moving average in the S&P 500 is not to be taken lightly. The last time we had a genuine break below was at the start of the pandemic and it was a free fall from there. Notably, a few minor incursions (pun intended) below have ultimately been buying opportunities.

SPX daily

On the day:

  • S&P 500 down 85 points, or 1.9%, to 4397
  • Nasdaq -2.4%
  • DJIA -1.1%
  • Russell 2000 -1.4%

On the week:

  • S&P 500 -5.7%
  • Nasdaq -7.6%
  • DJIA –4.6%
  • This is on track to be the worst January for the Nasdaq ever.
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    GBP/JPY slumps back to 154.00 level as risk-off flows, weak UK data hit sterling and lower yields, safe haven demand help yen

    January 22, 2022 05:17   FXStreet   Market News  

    • GBP/JPY dropped 0.7% on Friday, falling from above 155.00 to around 154.00.
    • Risk-off flows and soft UK data weakened sterling while safe-haven demand and lower global bond yields strengthened the yen.

    GBP/JPY fell sharply on Friday and heavy downside in the global equity market and commodity space weighed on more risk-sensitive currencies such as sterling, whilst a sharp drop in global bond yields on safe-haven demand boosted the rate-sensitive yen. Much worse than expected UK Retail Sales figures for December made things worse for GBP and, though it wasn’t the worst performing G10 currency on the day, it fell 0.7% against the yen, which was the second-best performing G10 currency after its safe-haven counterpart the CHF. The net result for GBP/JPY was that it dropped sharply from above 155.00 all the way to 154.00 where it is currently stabilising ahead of the weekend FX market close.

    After GBP/JPY broke below the 155.50 level on Thursday, above which it had been consolidating within a descending trendline for the past few sessions, the pair’s technical momentum has taken a marked turn for the worse. As poor earnings and Fed tightening fears drive losses in US (and global equities) that may continue into next week, GBP/JPY bears will be eyeig a test of the 50 and 200-day moving averages in the 153.00 to 153.40 area ahead of key support in the 152.50 zone. Amid a lack of notable economic events to distract from these themes, aside from maybe flash UK January PMIs on Monday, fundamental catalysts for GBP outperformance are few and far between. The BoE will probably hike interest rates again in February, which might reignite some GBP/JPY upside on central bank divergence, but this could still be some weeks away.

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    United Kingdom CFTC GBP NC Net Positions increased to £-0.2K from previous £-29.2K

    January 22, 2022 05:17   FXStreet   Market News  

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    United States CFTC Oil NC Net Positions increased to 385.8K from previous 360.5K

    January 22, 2022 05:12   FXStreet   Market News  

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    If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

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    European Monetary Union CFTC EUR NC Net Positions up to €24.6K from previous €6K

    January 22, 2022 05:12   FXStreet   Market News  

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    Japan CFTC JPY NC Net Positions rose from previous ¥-87.5K to ¥-80.9K

    January 22, 2022 05:09   FXStreet   Market News  

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    FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

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    United States CFTC S&P 500 NC Net Positions: $125.2K vs $77.4K

    January 22, 2022 05:09   FXStreet   Market News  

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    If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

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    United States CFTC Gold NC Net Positions: $194.2K vs previous $199.7K

    January 22, 2022 05:05   FXStreet   Market News  

    Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

    If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

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