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  • Gold Remains At Risk Ahead Of US Data, Copper Slides On China PMI Miss

    By David de Ferranti, Currency Analyst

    02 November 2014 23:50 GMT

    Talking Points

    Silver Continues Slide As Technicals Warning Of Further Weakness

    Crude Oil Awaiting Breakout Below Critical $80.00 Barrier

    Gold Vulnerable To USD Strength Over Q4 - Quarterly Forecast

    Gold and silver extended their declines on Friday as gains for the greenback dragged the precious metals lower by over 2 percent for the session. Looking ahead, the USD may offer further guidance to the alternative assets, putting US ISM Manufacturing figures in focus. The leading indicator is tipped to deteriorate slightly from its prior reading, yet remain well within expansionary territory at a healthy 56.4. Given the upside momentum for the reserve currency the bulls may be easily impressed by an upside surprise, which would spell further weakness for gold. Read more in the weekly outlook for gold and the US Dollar.

    Meanwhile, crude oil witnessed a modest decline to wrap up the week as supply glut concerns continue to keep pressure on prices. Over the past several months WTI has proven almost indifferent to robust economic releases from its largest consumer, the US. This suggests a recovery on the back of upcoming ISM data may prove challenging.

    Finally, copper is out of the gates to a rough start in early Asian trading today, which follows the release of disappointing Chinese economic data over the weekend. Official Manufacturing PMI figures from the largest consumer of the base metal slipped to their lowest since May. If the upcoming Service PMI and the HSBC Manufacturing data also miss expectations it may add to concerns over slowing growth in the Asian giant - a negative for copper.

    ECONOMIC EVENTS

    Source:DailyFX Economic Calendar, Times In GMT

    Market Movements (Fri 31 Oct, 2014, Close 5PM EST)

    Energy

    Open

    High

    Low

    Close

    $ Chg.

    % Chg

    US Oil

    80.94

    81.24

    79.51

    80.65

    (0.29)

    -0.36%

    UK Oil

    86.01

    86.22

    84.58

    85.86

    (0.15)

    -0.17%

    Natural Gas

    3.857

    3.95

    3.831

    3.87

    0.01

    0.26%

           

    Metals

    Open

    High

    Low

    Close

    $ Chg.

    % Chg

    Gold

    1,198.56

    1,202.61

    1,161.06

    1,170.95

    (27.61)

    -2.30%

    Silver

    16.48

    16.52

    15.64

    16.13

    (0.34)

    -2.07%

    Palladium

    778.7

    793.7

    769.5

    790.5

    11.80

    1.52%

    Platinum

    1,244.10

    1,247.20

    1,218.50

    1,233.30

    (10.80)

    -0.87%

    Copper

    3.06

    3.09

    3.04

    3.05

    (0.01)

    -0.36%

    CRUDE OIL TECHNICAL ANALYSIS

    Crude remains contained below the 84.00 barrier and within striking distance of the critical 80.00 floor. Alongside a core downtrend (descending trendline, 20 SMA, ROC) a daily close below the 80.00 barrier would be required to open the 2012 low near 77.00.

    Crude Oil: Awaiting Break Below Psychologically-Significant Barrier

    Daily Chart - Created Using FXCM Marketscope 2.0

    GOLD TECHNICAL ANALYSIS

    Gold remains in a short-term downtrend as indicated by the 20 SMAand ROC. Alongside the break below 1,180 this leaves a bearish technical bias intact with a target offered by the July '10 low near 1,158.

    The DailyFX SpeculativeSentimentIndex suggests a mixed bias for gold based on trader positioning.

    Gold: Trend Indicators Align With Broader Bearish Backdrop

    Daily Chart - Created Using FXCM Marketscope 2.0

    SILVER TECHNICAL ANALYSIS

    Silver remains in respect of trendline resistance alongside broader signs of a downtrend. The cut through 16.50 places the spotlight on the late February 2010 low near 15.60.

    Silver: Respect of Trendline Resistance Keeps Immediate Risks Lower

    Daily Chart - Created Using FXCM Marketscope 2.0

    COPPER TECHNICAL ANALYSIS

    An Evening Starhas emerged following copper's retreat from trendline resistance. The key reversal pattern suggests some scope for further weakness. Yet traders should be wary of prematurely adopting short positions given the indication that an uptrend from the 20 SMA persists.

    Copper: Awaiting Greater Confluence Of Technical Signals

    Daily Chart - Created Using FXCM Marketscope 2.0

    PALLADIUM TECHNICAL ANALYSIS

    Palladium's rebound from the 775 floor has left an Evening Starformation lacking confirmation suggesting the bulls are unprepared to relinquish their grip on prices. Moreover, trend indicators (20 SMA and ROC) are pointing higher, suggesting the possibility of a revisit of the 800 barrier. A climb above the nearby hurdle would be required to open the 820 handle.

    Palladium: Bearish Reversal Signal Fails To Find Confirmation

    Daily Chart - Created Using FXCM Marketscope 2.0

    PLATINUM TECHNICAL ANALYSIS

    Platinum has finally closed outside its1,242 to 1,289 range that had contained the precious metal over the past several weeks. Alongside signs of a short-term downtrend a bearish technical bias is preferred, placing the spotlight on the recent lows near 1,187. A climb back above 1,242 and bullish reversal signal would be required to warn of a base for the metal.

    Platinum: Breakout Places Focus On 2014 Lows

    Daily Chart - Created Using FXCM Marketscope 2.0

    Written by David de Ferranti, Currency Analyst, DailyFX

    To receive David'sanalysis directly via email, please sign up here

    Contact and follow David on Twitter: @DaviddeFe

    Business relationship disclosure: The article has been written by FXCM/DailyFX, David de Ferranti. FXCM/DailyFX is not receiving compensation for it (other than from Seeking Alpha). FXCM/DailyFX has no business relationship with any company whose stock is mentioned in this article.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Nov 03 5:50 PM | Link | Comment!
  • Weekly Forex Trading Forecast - Nov.2, 2014

    Written by David Rodriguez, Quantitative Strategist ; Ilya Spivak, Currency Strategist ; Michael Boutros, Currency Strategist ; Christopher Vecchio, Currency Strategist and David de Ferranti, Currency Analyst

    Nov.2, 2014

    Symbol

    Forecast

    Outlook

     

    US Dollar Aiming Higher as Upbeat Jobs Data Fuels Fed Hike Bets

    Bullish

     

    No QE This Week from ECB, but Prospect of Easing Haunts Euro

    Neutral

     

    USD/JPY to Eye Fresh Highs on Less-Dovish FOMC, More BOJ Easing

    Bullish

     

    British Pound Holds on by a Thread - What to Watch in Week Ahead

    Neutral

     

    Gold Plummets to 4-Year Lows as Fed Ends QE- $1206 Resistance

    Bearish

     

    Canadian Dollar Faces Conflicting Cues from BOC, Key US Data

    Neutral

     

    AUD Poised For Intraday Volatility On Torrent Of Top-Tier Data

    Neutral

     

    New Zealand Dollar at Risk on Dovish RBNZ, Status-Quo FOMC

    Bearish

    US Dollar Aiming Higher as Upbeat Jobs Data Fuels Fed Hike Bets

    Fundamental Forecast for US Dollar: Bullish

    · US Dollar to Advance as Upbeat Payrolls Data Fuels Fed Rate Hike Bets

    · Softer ISM Data May Be Offset by "Fed-Speak" Pointing to Steady Outlook

    · Help Identify Critical Turning Points for the US Dollar Using DailyFX SSI

    The US Dollar continued to reassert itself in the final days of October, rising for a second consecutive week to produce the largest advance in over a month against its leading counterparts. The move was primarily driven by a comparatively hawkish FOMC monetary policy announcement. The markets were positioned for a dovish rhetorical shift reflecting a desire to safe-guard the US recovery from knock-on effects of slowing growth in the Eurozone and Asia. As we suspected, Janet Yellen and company opted to stay the course, concluding the QE3 asset purchase program and delivering a broadly status-quo policy statement.

    This makes for a data-sensitive environment going forward as speculation about when normalization will commence continues. Priced-in expectations telegraphed in Fed Funds futures shifted one month forward in the aftermath of the FOMC meeting, with investors now expecting the first rate hike by December 2015 compared with a call for January 2016 prior to the policy announcement. The week ahead will offer ample opportunities for this to evolve further as a slew of high-profile economic data points cross the wires.

    Needless to say, the spotlight will be on Friday's Employment report. Nonfarm payrolls are expected to register an increase of 235,000 in October, marking a bit of a slowdown following the 248,000 gain in September. Theunemployment rate is seen holding steady at 5.9 percent. Leading surveys suggests that the pace of hiring across the manufacturing and services sectors was unchanged compared with the prior month however. Furthermore, data compiled by Citigroup shows that US economic news-flow has broadly outperformed relative to consensus forecasts since August, hinting analysts are under-appreciating the recovery's vigor. On balance, this opens the door for an upside surprise.

    A medley of activity indicators will precede the jobs report, with October's factory- and service-sector ISMreadings, September's Factory Orders data and the leading ADP estimate of hiring activity taking top billing. The twin ISM reports may prove most problematic, reflecting a slowdown in economy-wide activity. A dip in the pace of expansion compared with the peaks seen in the second quarter is not news at this point however, emerging leading survey figures some months ago and confirmed in last week's third-quarter GDP report.

    The Fed has clearly opted to look past this deceleration and will likely tolerate a steeper slowdown still before adjusting policy considering its steady hand through a far more dismal first quarter. A packed schedule ofcommentary from Fed officials including Chair Yellen will probably help hammer this point home in the days ahead. With that in mind, the greenback looks poised to continue higher (albeit not in a straight line) as firmer jobs data suggests stimulus withdrawal may arrive sooner rather than later.

    Business Relationship Disclosure: The articl has been written by FXCM/DailyFX, Currency Strategist/Analyst team. FXCM/DailyFX is not receiving compensation for it ( other than from Seeking Alpha). FXCM/DailyFX has no business relationship with any company whose stock is mentioned in this article.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Nov 03 5:32 PM | Link | Comment!
  • Gold At Risk On Hawkish FOMC Tilt, Crude Rebounds Ahead Of Inventories

    By David de Ferranti, Currency Analyst

    29 October 2014 00:21 GMT

    Talking Points

    · WTI Rebounds From Critical Barrier Ahead Of Inventories Data

    · Gold & Silver Brace For Volatility On Upcoming FOMC Decision

    · Gold Vulnerable To USD Strength Over Q4 - Quarterly Forecast

    Crude oil witnessed another volatile session on Tuesday with WTI rebounding by over 1 percent. Newswires cited a climb in US Consumer Confidence as a potential catalyst behind the recovery. However, given disappointing Durable Goods Orders data also crossed wires, a more likely explanation for the climb may be profit-taking near the critical $80.00 a barrel barrier.

    The DOE's Weekly Petroleum StatusReport due over the session ahead is tipped to reveal the fourth consecutive rise for total crude stocks. Recent figures from the government agency have been overwhelmingly bearish, this includes a climb in the rate of US production to near multi-decade highs. Another round of negative data points may limit the scope for a corrective bounce for WTI.

    Natural gas also rebounded strongly in recent trade, which may reflect repositioning from traders following several preceding sessions of steep declines. However, the potential for a sustained advance may be limited if storage data due later in the week keeps ample supply expectations alive. Recent injection figures have remained well-above the seasonal average, which has dragged the commodity lower by more than 14 percent since its September peak.

    Turning to the precious metals; gold and silver are bracing for volatility on the back of the upcoming FOMC decision. The central bank is widely expected to continue tapering its asset purchase program, turning the focus to the accompanying statement for clues on the timing of an eventual rate rise. If the central bank downplays subdued inflation expectations and highlights the continued progress in the US labor market it would likely firm policy normalization expectations. This in turn may reinvigorate the USD and weigh on gold.

    Finally, copper continued its climb on Tuesday as newswires offered fresh reports on the rapidly evolving miner's strike story in Indonesia. Workers at one of the world's largest extraction facilities for the metal are reportedly readying for a potentially month-long strike that threatens to slow production. Further speculation over supply disruptions may offer short-term support to copper. However, as proven by similar scenarios (e.g.South African platinum worker's strike) the lasting influence on markets is often limited.

    ECONOMIC EVENTS

    Source:DailyFX Economic Calendar, Times In GMT

    Market Movements (Tue 28 Oct, 2014, Close 5PM EST)

    Energy

    Open

    High

    Low

    Close

    $ Chg.

    % Chg

    US Oil

    80.65

    81.64

    80.34

    81.53

    0.88

    1.09%

    UK Oil

    85.36

    86.35

    85.07

    86.16

    0.80

    0.94%

    Natural Gas

    3.564

    3.672

    3.537

    3.67

    0.10

    2.86%

           

    Metals

    Open

    High

    Low

    Close

    $ Chg.

    % Chg

    Gold

    1,226.28

    1,235.51

    1,222.37

    1,228.27

    1.99

    0.16%

    Silver

    17.11

    17.39

    17.06

    17.19

    0.08

    0.49%

    Palladium

    784.1

    799.8

    778.3

    792.5

    8.40

    1.07%

    Platinum

    1,255.80

    1,271.00

    1,250.10

    1,265.40

    9.60

    0.76%

    Copper

    3.058

    3.095

    3.055

    3.089

    0.03

    1.01%

    CRUDE OIL TECHNICAL ANALYSIS

    Crude remains within striking distance of the critical 80.00 floor. While a Hammerformation has been left in its wake, the bullish signal may find limited follow-through given recent reversal patterns have been met with a lackluster response from traders. Alongside a core downtrend (descending trendline, 20 SMA, ROC) a daily close below the 80.00 barrier would be required to open the 2012 low near 77.00.

    Crude Oil: Awaiting Break Below Psychologically-Significant Barrier

    Daily Chart - Created Using FXCM Marketscope 2.0

    GOLD TECHNICAL ANALYSIS

    Gold's slide below the 1,241 mark has helped confirm an Evening Starformation which may warn of a deeper setback. Trend indicators also appear to be shifting with prices testing the 20 SMAand the ROCprodding at the zero bound. Confluence of the signals would be required to offer a more concrete bearish technical bias.

    The DailyFX SpeculativeSentimentIndex suggests a mixed bias for gold based on trader positioning.

    Gold: Awaiting Alignment From Short-Term Trend Indicators

    Daily Chart - Created Using FXCM Marketscope 2.0

    SILVER TECHNICAL ANALYSIS

    Silver remains in respect of trendline resistance and its retreat under the 17.30 floor has generated anEvening Starpattern. While typically a reversal signal from a preceding uptrend, the formation indicates the bears are unprepared to relinquish their control of the precious metal. This casts the immediate risk lower for a revisit of the 16.70 floor. Traders should be mindful that subdued negative momentum reflected by the ROC indicator suggests a clean descent may be difficult.

    Silver: Respect of Trendline Resistance Casts Immediate Risks Lower

    Daily Chart - Created Using FXCM Marketscope 2.0

    COPPER TECHNICAL ANALYSIS

    Copper is at a critical juncture as it faces a retest of its descending trendline on the daily. Trend indicators have recently turned upwards, leaving the metal to await a breakout to offer a bullish technical bias. In the alternative scenario if a pullback and reversal candlestick formation emerges it would turn the risks lower.

    Copper: Awaiting Guidance Near Trendline Resistance

    Daily Chart - Created Using FXCM Marketscope 2.0

    PALLADIUM TECHNICAL ANALYSIS

    Palladium has bound some buying interest renewed at the 775 handle as the 20 SMAturns upwards. While this offers a positive signal some skepticism over a sustained advance is warranted, given recent choppy price action. Further, sellers appear intent on capping the precious metals' advance at the 38.2% Fib. near 800.

    Palladium: Rise Encounters Sellers At 38.2% Fib.

    Daily Chart - Created Using FXCM Marketscope 2.0

    PLATINUM TECHNICAL ANALYSIS

    Platinum continues to consolidate within the 1,242 to 1,289 range that has contained the precious metal over the past several weeks. With trend indicators swaying a breakout from the recent trading band would be desired to offer a clearer directional bias.

    Platinum: Awaiting Breakout From Narrow Trading Band

    Daily Chart - Created Using FXCM Marketscope 2.0

    Written by David de Ferranti, Currency Analyst, DailyFX

    To receive David'sanalysis directly via email, please sign up here

    Contact and follow David on Twitter: @DaviddeFe

    Business relationship disclosure: The article has been written by FXCM/DailyFX, David de Ferranti. FXCM/DailyFX is not receiving compensation for it (other than from Seeking Alpha). FXCM/DailyFX has no business relationship with any company whose stock is mentioned in this article.

    Oct 29 4:29 PM | Link | Comment!
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