Daily Market Outlook, March 9, 2021

Daily Market Outlook, March 9, 2021 Asian equities are mixed with most markets up but Chinese indices sharply lower. Reports suggest that Chinese state funds have been buying in the market to arrest the decline. In the UK, the British Retail Consortium’s February sales measure is up 9.5%y/y, pointing to some reversal of the previous month’s plunge in spending. UK new coronavirus cases fell on Monday to their lowest since late September.The House of Representatives, the lower chamber of the US Congress, will hold what will probably be a final vote on President Biden’s fiscal stimulus package either later today or tomorrow. The Senate voted in favour of the bill on Saturday but, because it contained some amendments from the original package, another vote is required. Some ‘progressive’ Democratic Representatives have threatened to vote against the bill if they feel it has been watered down but the likelihood is that it will pass. If so, that will further boost markets expectations for US economic growth that have already been lifted by some recent stronger than expected data. However, It may also fuel concerns that the bond market sell-off still has further to run.Today’s data calendar is light with nothing of note in the UK. In the Eurozone, Italian industrial production data for January are expected to post a modest rise. However, already released data for Germany and Spain both recorded falls which may point to downside risks for Italy. French data is due tomorrow and the Eurozone aggregate on Friday. The Q4 Eurozone GDP and employment updates are both final numbers that are not expected to be revised from the previous releases. Those showed a fall in output but a modest rise in employment.In the US, the NFIB’s small business optimism index for February will be watched for further indications that US economic growth is accelerating. Some of the subcomponents regarding the labour market have already been released and they noted increases in hiring plans, wage payout expectations and the numbers of job vacancies that are hard to fill.Chin’s February CPI and PPI inflation estimates will be released overnight. So far, both have remained subdued despite the rebound in economic activity which took GDP beyond its pre-pandemic peak before the end of last year. The producer price measure is expected to have picked up sharply this month due to the rise in commodity prices but consumer price inflation is still forecast to be negative.G10 FX Options Expiries for 10AM New York CutEUR/USD: $1.1610-15(E653mln), $1.1620-25(E562mln), $1.1640-50(E552mln), $1.1800(E652mln), $1.1835-50(E710mln), $1.1880-00(E662mln)AUD/USD: $0.7700(A$524mln)USD/CAD: C$1.2450($620mln), C$1.2550($545mln), C$1.2595-00($742mln), C$1.2725-30($828mln)USD/CNY: Cny6.56($500mln)----------------Larger Option PipelineEUR/USD: Mar10 $1.2000-10(E1.3bln); Mar11 $1.1800(E1.2bln), $1.1900-15(E1.5bln); Mar12 $1.1995-1.2000(E2.1bln), $1.2100-10(E1.2mln)USD/JPY: Mar10 Y105.80($1.4bln); Mar11 Y107.75($1.7bln); Mar12 Y105.95-106.00($2.7bln), Y108.30-35($1.8bln)AUD/USD: Mar10 $0.7500(A$1.3bln); Mar11 $0.7600(A$1.7bln), $0.8000(A$1.8bln)AUD/NZD: Mar11 N$1.0730(A$1.96bln-NZD puts); Mar18 N$1.0770-75(A$1.3bln-AUD puts)USD/MXN: Mar12 Mxn20.30($1.1bln)Technical & Trade ViewsEURUSD Bias: Bullish above 1.20 bearish belowEURUSD From a technical and trading perspective, the closing breach of 1.21 and the descending trendline is a bullish development opening a retest of prior highs at 1.2350, only a move back through 1.20 would suggest further downside opening a potential test of 1.17 yearly pivotFlow reports suggest congestion through the 1.1820-1.1780 area with weak stops possibly being cleared up quickly through to the 1.1750 and again stronger congestion and likely to continue through the 1.1700 level, topside offers light back through the 1.1920 area and weak stops possibly setting up a small short squeeze through to the 1.1980 area before stronger offers start to appear.GBPUSD Bias: Bullish above 1.3750 targeting 1.44GBPUSD From a technical and trading perspective, as 1.40 now acts as support bulls will target a test of 1.44 as the next upside objective. Below 1.40 opens a retest of 1.3750 pivotal trend support.Flow reports suggest topside offers weak back through the 1.3900 level and light stops limited at best before running into light offers around the 1.3950 area and then increasing resistance through to the 1.4000 before slightly stronger stops appear and the market opens to the 1.4050-1.4100 with patchy resistance until closer to the topside of that range and stronger offers thereafter, downside bids into the 1.3800 level with weak stops likely on a dip through the 1.3780-40 levels with congestion likely to soak up much of the selling through to the 1.3700 level with possibly strong congestion then around the 1.3700 level increasing into the 1.3650 level before being able to make a move to the 1.3600 area and strong bids again.USDJPY Bias: Bullish above 107.30 targeting 109.85USDJPY From a technical and trading perspective, as 104.50 supports there is potential for a further squeeze higher to test offers towards 107. A loss of 103.50 would negate further upside and suggest a resumption of trend. Target achieved, look for a profit taking pause to develop above 108.60, as 107.30 support bulls will target a test of 109.85 nextFlow reports suggest topside congestion is likely to soak up some of the weak stops above through to the 109.50 area where strong congestion is likely to appear and increasing offers into the 110.00 and like the previous spikes at the beginning of last year any move is likely to find resistance above and continuing through the 110.00 with break out stops likely to be a little more nervous, downside bids light through to the 108.00 level with weak stops on any retrace through the 107.80 level and opening a dip to the 106.00 area possible over the coming week.AUDUSD Bias: Bullish above .7560 bullish targeting .8000AUDUSD From a technical and trading perspective, as the major trendline support at .7560 now acts as support, look for target wave 5 upside objective towards .8000. A closing breach of .7730 of the internal descending trendline will encourage the bullish thesis.Flow reports suggest topside offers through the 0.7700-20 area with limited potential for stops however, the offers don’t really look that strong until the 0.7800-20 areas with weak stops likely beyond that area to open up the potential for another higher run, downside bids into the 76 cents level with strong bids likely through to the 0.7580 area, weak stops are likely to be few and far between with stronger bids likely into the 0.7550 level and likely stronger congestion through to the 0.7500 areaDisclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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Dollar Edges Lower in Consolidation, But Remains Supported; 3Y Bond Auction Eyed

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Weekly Market Outlook 09-03-21

In this Weekly Market Outlook 09-03-21, our analyst looks into the trading week ahead, possible market moving data releases across the globe and the technical analysis to accompany it!Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/weekly-market-outlook-09-03-21"
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Dollar Down, but Near Three-and-a-Half Week Highs Over Rising Bond Yields

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Dollar reigns supreme on yields, recovery advantage

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Dollar Jumps to More Than 3-Month Highs, but Boost From Yields May Fade

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US Open Live Analysis | March 08

US equity futures are bouncing with the USA30 and USA500 now in the green, erasing overnight losses. The USD shrugged off the wholesale data, which revealed a spike in the sales component, and an in-line outcome for inventories.

 

Click here to access the our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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USA100 and the 50-day moving average

USA100, Daily

US equity markets continue to feature a churn from growth focused Technology stocks into cyclicals including Energy, Financials and Industrials. The logic is that  technology stocks are more vulnerable to fall in the US Bond markets as the aftereffect of the rise in yields due to their valuations being based so much on future earnings. Today the USA100 is currently trading lower again around 12,470 ahead of the cash open and remains well below the converging 20 and 50-day moving averages at the 13,200 zone.

The continued soothing words from Jerome Powell last week, possibly the last before the FOMC meeting (16-17 March), and an expected similar tone from Christine Lagarde at this week’s ECB meeting and press conference (11 march) add to the feeling of an inevitable spike in inflation and therefore the premise that the bond markets remain on course for more weakness. The continued bid on major commodities such as oil and copper simply add to this outlook.  The central bankers continue to tread a delicate balancing act between a benign attitude to rising inflation expectations and actively encouraging a spike and overheating their economies. The big beat from the US nonfarm payroll data on Friday also added to the argument that the spike in prices could come sooner than expected. However, jobs growth remains fragile; the wider U6 measure of unemployment in the US remains over 10% at 11.1% and although it is trending lower, it is still a significant caveat for the amount of slack in the economy. Friday’s payrolls showed a big welcome boost for services jobs (the hospitality sector in particular) but the workweek was trimmed in January and fell sharply in February, leaving a big undershoot for hours-worked. Payrolls over the May-February period have reclaimed 58% of the jobs lost in March and April. Hours-worked have reclaimed a larger 64% of the drop. The larger workweek surge means that hours have been recouped by fewer workers working longer hours.  The impact of the severe cold snap in the US is also yet to be fully absorbed.

The US Senate passed the $1.9 tln rescue plan over the weekend, and it is expected back on the floor of the House on Tuesday to add to the wall of money being pumped into the US economy. The vote was on strict party lines with all Democrats supporting the bill and all Republicans opposing. A few changes were made to the size of unemployment funding, hence the return to the House. The bill includes $1400 checks to individuals earnings less than $75,000, along with $300 per week in enhanced unemployment benefits (versus $400 previously). The additional stimulus should help boost equities near term, though it’s been largely priced in and the probable rise in bond yields could limit the upside and weigh value stocks to make for choppy action as we have seen so far today with all three major US equity markets lower.

The USA100 broke below the 20-day moving average (13,525) on February 22, the 50-day moving average 3 days later and then gained momentum last week to post a new 2021 low at 12,205. Next support is at the 12,000 level, a psychological round number, with the confluence of the daily S2 and 161.8 Fibonacci extension close to it. Below the latter lies the 200-day moving average at 11,750 and then the October low at 11,000.  RSI and MACD both continue to track lower. To move higher again, 13,200 is now key, with the convergence of the 20 and 50-day moving averages and the 61.8 Fibonacci level. Above here resistance lies at 13,500 and the all-time high at 13,920.

Click here to access the our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Eyes on central banks

The markets are looking ahead to the ECB meeting this week. Over recent days, the ECB officials have been trying to manage reflation trades and slow the ascent in yields, although most recent comments have backed the view that the central bank will leave policy settings unchanged. Both the Fed and ECB have been to implicitly endorsing the trajectory of rising yields amid expectations for a strong rebound in growth later in the year, even if policymakers are clearly eager to prevent excessive moves. Against that background the ECB is unlikely to deliver anything but soothing words for bond markets this week but Lagarde will stress the flexibility on asset purchases that the PEPP program provides already.

It’s highly possible President Lagarde will deliver a dovish presser but at the same time, she is likely to re-affirm the central scenario of strengthening growth in the second half of the year. Indeed, updated staff projections are unlikely to bring major revisions and on the inflation front could actually come in a tad higher than in December — at least for this year, as cost pressures in supply chains are building.

Ongoing virus restrictions are still likely to see the Eurozone posting another quarter of negative growth in Q1 this year, but even if vaccinations are slow, they are proceeding, and consumption is set to bounce again later in the year, while manufacturing is already expanding at a solid pace. Key ECB figures have reiterated that the central scenario remains for a strong rebound in H2 and against that background, dovish comments mean the ECB won’t exit the extremely generous monetary policy settings any time soon, rather than the central bank will add to existing measures.

ECB’s Panetta said recently that “we are already seeing undesirable contagion from rising US yields into the euro area yield curve” and that “the steepening in the nominal GDP-weighted yield curve…is unwelcome and must be resisted“. Similarly, Executive Board member Schnabel said last Friday that “a rise in real long-term rates at the early stages of the recovery, even if reflecting improved growth prospects may withdraw vital policy support too early and too abruptly given the still fragile state of the economy” adding that “policy will then have to step up its level of support”.

Meanwhile ECB’s Villeroy recently flagged the possibility of a deposit rate cut, and clearly at the current juncture it remains crucial to assure markets that the ECB hasn’t run out of options should things take another turn for the worse. However, that doesn’t mean these options will be used. Indeed, ECB’s Weidmann actually played down the rise in yields, saying that he “would tend to argue that the size of the movements is not such that this is a particularly worrisome development“. And while one could dismiss this as a hawkish minority view from the Bundesbank President, Vice President de Guindos also sounded relatively relaxed yesterday when he stressed that in terms of spreads the situation is very calm, while highlighting that the recent increase of nominal yields came on the back of very low levels.

Indeed, real rates have actually declined since the end of last year, thanks to a jump in Eurozone headline inflation as Germany’s temporary VAT cut fell out of the equation. Eurozone HICP inflation stood at 0.9% in February, after ending 2020 in negative territory. Note that, for the ECB the 10-year spread over the German benchmark is below the average over the past year for France, Spain, Italy, Portugal and essentially most Eurozone countries.

Even if there was a problem, as ECB officials have pointed out, the PEPP program, which was strengthened again at the end of last year, offers sufficient flexibility to react, should it be necessary. The overall envelope for asset purchases under the PEPP program is already quite generous and also allows the central bank to target yields if necessary, by diverging from purchases according to the capital key. No need to tweak official policy settings then, especially as the central bank’s central scenario remains for a marked recovery in the second half of the year.

PEPP purchases will likely become more important to manage yields in coming months, especially if cost pressures, which are evident in survey findings, feed through to headline inflation. Overall activity may be set to contract again in the first quarter, but the manufacturing sector is already seeing very strong demand and while labour costs are likely to remain subdued, input price inflation is picking up sharply, not just in the Eurozone. That will likely continue to underpin volatility in global markets with risks of overshooting in yields as it increasingly becomes clear that monetary policy won’t get any more relaxed than it is at the moment. Central banks meanwhile have the difficult task of trying to lay the ground for a turnaround in policy without spooking markets too much, but also without letting inflation expectations run higher, which could happen if and when economies have re-opened and consumption bounces back. Just when and to what extend that rebound in consumption will unfold remains uncertain at the moment and that will leave central banks essentially in wait and see stance and hedging their bets in either direction.

Click here to access the our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Major Global Funds Could Start Portfolio Rebalancing Soon. What Does it Mean for Stocks?

China strengthened investors’ conviction in the global recovery with the latest trade data released on Sunday. The volume of exports gained impressive 60% YoY in January-February period. The reading was way ahead of market projections (40%). The February figure is a huge gain - 150% YoY. Undoubtedly, growth of China exports is also a merit of its trading partners, especially the United States, where economic growth in February could be the highest on record. This can be seen, for example, in the surge of GS Analytic Index to the highest level in many years:A similar jump is in the NY Fed Nowcast GDP forecast for the 1Q of 2021:The forecast was revised sharply higher thanks to strong incoming data and now stands at 8.5%. And that's without taking into account forthcoming government spending stimulus!Congress approved support measures of $1.9 trillion, but Monday moves in the US futures indicate that approval of the bill apparently has been priced in valuations.Equities remain under pressure as the stressful situation in US long-term rates has not gone anywhere. Moreover, last week's events (Powell speech, NFP release) only fueled the trend. I agree that the topic of erratic moves in the Treasury rates has set the tongue on edge, but the markets, in a sense, are now in unchartered waters – the good old Fed which expressed concerns about every ebb and flow in the market, has apparently gone. Therefore, repeated shocks in rates, such as the recent ones, should not be ruled out. We’ve seen their impact on equities and the risk of repeated volatility keeps buying pressure effectively in check.JP Morgan has discovered another channel of the impact of the recent Treasury selloff on the stock market – coming portfolio rebalancing of large pension and mutual funds. They will most likely significantly adjust the proportions of assets in the portfolio, due to accumulated overweight in equities as well as favorable conditions - stocks became quite expensive while bonds have fallen a lot.There are 4 big players to watch out for - balanced Mutual Funds (60:40), US Pension Funds, Norwegian Oil Fund and Japan Pension Fund. They make portfolio rebalancing at different intervals, but since some of them have called off the move, there is a risk of combined sell-off. For example, US mutual funds have a noticeable overweight in equity, which sooner or later will have to be adjusted:JP Morgan estimates cumulative potential outflow from stocks caused by the sale of these funds at $316 billion. Since the event (rebalancing) is more or less likely (the fund's strategy periodically requires this procedure), other market participants may be inclined to try to get ahead of the whales, which may increase near-term pressure on equities.Key events to watch this week:EURUSD – the weekly report of the ECB’s purchases within PEPP (pandemic QE” program) which is due today - will the ECB respond to the rise of EU bond yields? Increased bond purchases by the ECB should have negative impact on the Euro as it will signal that the ECB is concerned. On Thursday - the ECB meeting and again the question, what does the regulator think about the recent moves in bond yields?USD index - on Wednesday and Thursday - major auctions of 10- and 30-year Treasuries bonds. Week demand on these auctions (low bid-to-cover ratio) will likely add upward pressure on the yields, and vice versa, strong demand will bring welcomed relief to risk assets. Another report to watch is US CPI in February, which is due on Wednesday. Given the latest data on the NFP, a positive surprise is likely and should support upside movement in the USD.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/major-global-funds-could-start-portfolio-rebalancing-soon-what-does-it-mean-for-stocks"
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GBPUSD Weekly Outlook

This week will be  quiet  for England. One of the data releases on Friday is January GDP which is expected to fall by 5%, which is driven by the closure of several consumer service sectors at the beginning of the year. It is likely that these data will not have a major impact, given the fast-running vaccination program and the anticipated strong economic rebound in the second quarter. The general risk sentiment and the swift UK vaccination process will still dominate the pound’s movements. The decline in the last 2 weeks, apart from the technical factor of the price  having peaked which makes it likely that there will be a  corrective action,  is also influenced by the sharp increase in US yields. However, it has improved relatively recently, compared to other European currencies.

Today (8 March) BoE Governor Bailey will present his views. At the end of February he confirmed that the UK economy is likely to be negative in the first three months of 2021, but he expects the economic contraction to be lighter than the record decline recently in GDP.

If you pay attention to past risk sentiment,  GBPUSD seems to be into corrective action compared to trend changes. After the sharp spike in yields subsides and risk appetite stabilizes, the pair is still likely to move upwards again. This week, if there is a further increase in yields this will still be a threat to the Pound.

GBPUSD’s correction from the new peak of 1.4240 continued to the 1.3777 level  last week on the FE projections of 61.8. Initial bias still points to the downside this week for further projections in FE 100.0 (1.3635) to coincide with January 2021 opening prices. Temporary downside moves were constrained by minor support. On the upside, a break of the minor resistance 1.3905 will target the continued resistance near the psychological level of 1.4000. A break of this level would denote that the temporary correction has been completed, and the possibility of a retest of the 1.4240 peak.

Technically, intraday is still in risk sentiment as seen from the AO bar below the neutral zone, but if there is an increase it could form a divergence bias. Obviously the price is forming a pattern a, b, c and is below the Kumo after the “dead cross” of Tenken sen and Kinjun sen twice in the intraday period, but the thin January transaction range will be a strong equilibrium level; meanwhile the ascending trendline will be  additional support.

 

Click here to access the our Economic Calendar

Ady Phangestu

Market Analyst – HF Indonesia

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

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Chart of The Day USD Index

Chart of The Day USD IndexUSD Index Probable Price Path & Potential Reversal ZoneThe U.S. employment data was better than expected, and the U.S. Treasury bill yield rate rose. Among them, the 10-year Treasury bill yield rate rose by nearly 6 basis points to 1.624% last Friday, setting a new high for more than a year. The rise in yields drove the exchange rate of the U.S. dollar. The U.S. dollar index closed up 0.4% to 92, a three-month high. The weekly increase of 1.2% was also the largest since the end of October last year.U.S. employment data improves. The number of non-agricultural jobs increased by 379,000 in February, which was higher than the 200,000 expected by the market. The increase in non-agricultural employment in January was revised upward from 49,000 to 166,000. The unemployment rate fell from 6.3% to 6.2%, the lowest since the outbreak of the epidemic in March last year. The market will pay attention to the inflation data released this week, including the February consumer price index released on WednesdayThe Senate passed 50 votes in favor to 49 against, and passed the $1.9 trillion rescue plan. American nationals with an annual income of less than US$80,000 will receive a maximum of US$1,400 in cash. The income ceiling is lower than the plan passed by the House of Representatives. The plan also includes US$160 billion for vaccines and testing, and US$360 billion for assistance to state and local governments, but the proposal to raise the federal minimum hourly wage to $15 was rejected. The House of Representatives is expected to vote on the amendment on TuesdayFrom a technical and trading perspective, Bearish USD sentiment was pared back again this week, reversing the minor increase in the prior week. The aggregated short USD position reflected in the currencies we monitor in this report was reduced by USD1.3bn to a little over USD29.1bn, still significant but the lowest bear bet on the USD since the start of December. This position reduction could allow for some fresh supply to enter the market at current levels.Technically the USD Index is testing a pivotal resistance cluster, 92.23 represents and symmetry swing versus the last corrective in September of 2020, 92.63 in the 61.8% Fibonacci retracement of the late 2020 decline, while 92.53 represents projected monthly range resistance and ascending trendline resistance. Watch for bearish reversal patterns to develop in this zone as an opportunity to deploy short exposure initially targeting 91.50 and 91.00 in a three wave pattern, through here can open a test of monthly projected range support below 90.50. A closing breach of 93.00 on the upside would open further upside extension to test the pivotal 94.70 level.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

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Precious Metals Monday 08-03-2021

Gold Gold prices have been under heavy selling pressure recently amidst the ongoing rally in US treasury yields. Yields on both the 10- and 30-year notes have been appreciating quickly amidst the continued pickup in US inflation expectations. The better spate of data released recently as a result of the positive impact from the $900 billion package agreed in December has amplified expectations for the US economic recovery.With the government vaccination drive progressing quickly, traders are anticipating that the US economic recovery will gather pace of Q2 and beyond. With the president’s $1.9 trillion fiscal package having now passed through Congress, traders are anticipating an even greater boost to spending. With this in mind, traders have been bidding up yields under the view that the Fed is likely to begin scaling out of asset purchases this year, ahead of schedule. While the Fed has so far downplayed this view, continued data strength and positive vaccination headlines are adding weight to this view.This week traders will be looking at the latest set of US inflation data for last month. If CPI comes in stronger than expected this is likely to fuel a further push higher in US yields, taking USD further higher also Weekly unemployment claims will also be on watch given the Fed reiterating its focus on achieving full employment.Silver Silver prices have also been hard hit recently with the resurgence in the US Dollar sending prices back down towards 2021 lows. The weakness in equities over recent weeks has also destabilised silver prices. With gold sinking and the Dollar rallying, the near-term outlook looks skewed towards further losses though the decline could be stemmed this week if inflation comes in lower than expected, causing the Dollar rally to pause.Technical Views GOLDFollowing the breakdown through the bottom of the contracting triangle pattern, gold prices have broken below the big 1764.98 level support and are now close to testing the 1669.42 level. While below the 1764.98 level, the outlook remains bearish with an eventual break below the 1669.42 level the next objective for sellers.SILVERThe failure at the 29.8611 level has seen price reversing heavily and selling off back down towards the 25.0756 level, breaking through the rising trend line from December lows. If price breaks back below the level, the next support region to note is down at the 22.5950 level.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/precious-metals-monday-08-03-2021"
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Market Update – March 8 – Yields Sharply into Focus

Market News Today – The $1.9t stimulus package passes Senate with few changes, final ratification could be this week. Strong NFP on Friday boosted Stocks (+1.95%), Yields (1.554%) and USD (91.90) into close. Yield differentials now coming sharply into focus. Houthi missile attack on the key Ras Tanura oil refinery spiked USOil prices 2.2% to within 4 cents of $68.00. Gold ($1700) remains weighed by rising yields and BTC pivots around 50k. China is aiming for 6%+ growth in 2021, (2.3% 2020), with manufacturing still 25% of GDP. Trade balance +119% vs Feb 2020. JPY data better than expected (Nikkei down 0.42%), but German Industrial Production missed significantly.

European stock markets are broadly higher, with the DAX and FTSE 100 posting gains of 0.6% and 0.7% respectively. US futures and in particular the NASDAQ are underperforming as improved confidence in the US recovery is hastening the rotation out of tech stocks. Bonds meanwhile are under pressure again, with the German 10-year rate up 2.0 bp at -0.285%, the Treasury yield 2.8 bp at 1.594%.

This week – ECB & BOC along with Inflation from US & China and GDP data from UK & Japan.

Today – ECB asset purchase data, BoE’s Bailey.

Biggest (FX) Mover @ (07:30 GMT) USDCHF (+0.39%) Moved higher on open over 20 MA and 0.9300, now breached R1 at 0.9320. Faster MAs aligned and trending higher, RSI 66 and rising, MACD histogram & signal line aligned lower but appear to be turning higher, well above 0 line. Stochs. into OB zone. H1 ATR 0.0010, Daily ATR 0.0067.

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Stuart Cowell

Head Market Analyst

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from HF Analysis /219270/
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