Tick tick... Historic break out of the downward channel. Only yield curve control will get yields back into the channel. Is the next phase of QE going to be yield curve control...
DXY is testing the top of the downward trendline and the July high of 103.578 which coincide with the 200-day MA level of 103.216. The DXY is looking quite overbought at the moment according to the RSI so a pullback towards the critical 61.8% Fibo retracement level of 102.277, which coincides with the 50-day MA level of 102.185, seems very likely. A failed...
If the support on the 200-day MA and 50-day MA levels of $81 and $80 holds its ground, I expect brent crude to test the 38.2% Fibo retracement level of $93.50 pb.
Nice bullish pullback on CRB core commodities index after hitting resistance on the 38.2% Fibo retracement level of 283. Golden cross is also imminent (50-day crossing 200-day MA). A break below the 23.6% Fibo level of 272 will however invalidate the idea. Fundamentally however, the weak data and economic growth from China is negative for commodities.
US 10-year bond yields have been trending lower since Oct 2022 after touching high around 4.250%. The rise in the 10-year yield from the past two weeks saw yields stop just short of the blue 61.8% Fibo level of 3.885%. Yields are currently testing the 200-day MA rate of 3.649% and a break below will allow bonds to rally further towards the 50-day MA rate of 5.525%...
It wasn’t smooth sailing for the rand last week after the local unit depreciated by roughly 3.00%. The USDZAR pair is forming a 5-wave impulse pattern which could see the rand slide further towards the 19.30’s. The MACD is holding a buy signal and the RSI still has room to move higher before hitting overbought zones. A break below 18.66 will however invalidate the idea.
The dollar had another strong week last week despite the weaker than expected US CPI results which saw the DXY maintain levels above the 50-day MA of 102.230. The DXY looks set to climb higher this week which will see the dollar test the 200-day level of 103.340. The RSI is also suggestive that the greenback has room to appreciate before sliding into overbought zones.
Checking in on the US 10-year yield it looks like yields are holding levels above 4.00% and a break above 4.20% will allow bond to bend further towards the 2022 high of 4.328%.
The US S&P 500 index is currently sitting on the crucial 50-day MA rate of $4,438. It’s difficult to predict where equities will go but a failed break below the 50-day MA could allow equities to push higher towards $4,650. A break below the 50-day MA will however invalidate the 5-wave impulse pattern which will see the index fall to the 61.8% Fibonacci retracement...
The dollar bounced higher last week, and a Fed hike coupled with strong US GDP results could allow the dollar to push the DXY higher towards the 50-day MA of 102.70. The technical indicators are also suggestive of a strong move higher for the dollar. Strong resistance is expected at 102.00
A move bellow 1.10 is on the cards. A strong break below 1.10 will allow a deeper move onto the 50-day MA of 1.09 MACD and RSI are both rolling over satisfyingly.
Choosing tops and bottoms is a risky game and it's difficult to stand in front of the freight train that is the S&P with shorts but the indes is looking top'pi. The MACD is showing signs of rolling over as well as the RSI . A pull back from here will see the index drop to $4,400 and a deeper support at the 50-day MA rate of $4,330.
The USD/ZAR pair is testing the 200-day MA of 18.02. A break above it will see the rand slide towards the 50% Fibo retracement rate of 18.29. Continued dollar strength could see a further push towards the 50-day MA of 18.77. A failed break above 18.02 will however allow the rand to re-test 17.70 but the rand’s momentum seems to be fading. MACD rolling over...
I had to invalid my previous long-term USDZAR idea for the 3Q2023 after the rand’s strong rally within the current A-B-C corrective pattern in June and July. The pair is now testing a critical support range between 17.92, the 61.8% Fibo retracement level which coincides satisfyingly with the 50-week MA rate, and 18.03, the pair’s 200-day MA. (17.92 – 18.03) A...
It looks like the pair will complete an A-B-C corrective pattern which could allow the rand to pull the pair onto the blue 50% Fibo rate of 18.22. The navy-blue channel has been broken and the bottom end of the channel now serves as a neckline resistance. This neckline also coincides satisfyingly with the 50-day MA. The failed break above the 50-day MA as well...
The DXY is still dancing with its 50-day MA and Friday’s soft PCE price index results saw the dollar give back some of its gains from earlier the week. The 50-day MA, at 103.780, held support while the 50% Fibonacci retracement level of 103.320 capped the dollar’s gains. The dollar’s direction will be dictated by the FOMC results and Friday’s non-farm payrolls...
The rand closed the week roughly 7 cents weaker against the dollar after sliding to a high of 19.04 against the dollar on Friday. The rand was boosted by the risk-on investor sentiment at the back end of the week which allowed the rand to keep the pair below the imperative 50-day MA rate of 18.82. The pair is however forming an upward channel which could allow...
Back in January I predicted that the USDZAR pair will climb to the 2020 high of 19.35 if the rand fails to hold the pair below the critical support rate of 16.80. We’ve seen this move play out, and then some, which saw the rand slide to an all-time low of 19.90 this week as the pair completed its 5th major impulse wave. Now it’s time to look at what lies ahead for...