The major commotion of the week was the massive rise in gas prices. What prompted such a strong bull market, and what to expect next? Don’t miss this edition of the digest.
- Alibaba -7.53%.Trading for a fall with $100 and a multiple of X20 could have made $150.6.
- ETH/USD +5.09%. Trading up with $100 and a multiple of X10 could have earned $50.9.
- Apple -3.92%. You could have earned $78.4 by trading short at $100 and a multiple of X20.
Among the “majors,” we observed the most substantial movements in the AUD/USD currency pair – the pair dropped 0.72%. Also, in USD/CHF – The pair added 0.83%.
Out of the cross-currency pairs, the currency pair NZD/CHF (+ 0.95%) and CAD/CHF (+ 1.06%) rose sharply. Thus, as you can see, over the past week, the most “affected” currency was the Swiss franc.
The decline in the Swiss franc can be explained as a reaction to insufficiently vital GDP statistics for the second quarter. The GDP in Switzerland grew by 1.8%, while economists expected growth of 2%. In annual terms, the increase was 7.7%, with expectations of + 9%.
The belief that the Central Bank would be in favor of further monetary tightening has increased significantly. As a result, many currencies are starting to rise in price relative to the “haven” – CHF.
The most exciting currency from the point of view of technical analysis is the NZD/CHF pair. On 20.08, a relatively strong reversal took place in the pair. The NZD broke through the 0.64800 resistance level and successfully exited through the widening triangle. We believe 0.66200 will be the critical target for the bulls.
The American stock market remained practically unchanged during the week. The Dow Jones fell slightly over the week, dropping 0.19%. The S&P 500 also decreased 0.28%, the Nasdaq100 index “suffered” a little more, dropping by almost 0.6%.
Let’s look at the shares of the FAANG stocks – Facebook, Apple, Google, Netflix, and Amazon.
Facebook shares have been moving down all week, dropping from $381.7 to $370.5. It lost about 2.9%. However, from a technical analysis point of view, the long-term trend continues to be bullish. Although it would seem “now” is the time to buy, we think it is still worth waiting for the rebound and confirmation of the resumption of the bullish trend.
Apple shares have dropped nearly 4% over the past week. The new release did not save the company’s capitalization even by unveiling the new iPhone 13, which took place on September 14. The shares continued to decline. From the point of view of technical analysis, the target for the bears may be the level of $145. Firm fundamental news that could somehow rectify the situation is not expected soon.
Google‘s stock price moved in different directions. At the beginning of the week, a slight increase in capitalization began, but the share price began to decline on Thursday, falling to $2850.
Netflix shares are down massively to $ 575.5. According to the technical picture, the target of the downward movement is the level of $574.20 (38.2% Fibonacci retracement level). Likely, the streaming company will achieve this goal very soon.
Amazon shares created a “gap” starting at 30.07, but the bulls failed to eliminate it on 09.09 completely, and the capitalization began to decline.
In general, the American stock market is beginning to slowly reverse, which is rather unpleasant news for the bulls. We are closely monitoring the situation.
Brent crude oil continues to grow closer to the local maximum of the year. The asset broke its downtrend line and has come out of the converging wedge, signaling the continuation of its uptrend. With a high degree of probability, the oil will renew its high above $77.5 in the short term.
Quotes are pushed up by the new tropical storm “Nicholas,” heading towards the Gulf of Mexico. At the same time, the oil-producing region has not yet fully recovered from the aftermath of Hurricane Ida, which hit the production platforms a few weeks ago.
OPEC, in turn, raised its forecast for global oil demand for 2022 to 100.8 million barrels per day. The estimate has been increased by nearly one million barrels.
The price of natural gas continues to grow, reaching the price of 5.685. The last time we observed such a gas price was in 2014.
Gas reserves in storage remain at record low levels, and winter is approaching. Weather conditions are challenging to predict. It is not known how cold this winter will be and how the price of gas will behave. However, such uncertainty is likely to push energy prices only upward.
It is worth remembering that, like many other commodities, gas can be highly volatile. Parabolic growth, which has already been observed more than once on the asset, will undoubtedly lead to a similar fall, and the price will return to the normal range. It is too early to talk about reversals, but you need to keep this in mind for now.
Bitcoin (BTC) found support at $44,000. The price action has entered a sideways phase, and the next few weeks will be crucial for the cryptocurrency market. If BTC fails to gain a foothold above $50,000 and continues the uptrend, a new wave of selling will begin in the market.
First of all, the selling will impact altcoins. The last time we had a similar situation was at the beginning of 2018, when, after falling from $20,000 to $6,000, bitcoin recovered to $12,000. However, it turned out to be a bullish trap. Altcoins, which both then and now recovered much faster than the leading cryptocurrency, eventually collapsed when the web slammed shut.
So far, the BTC dominance index remains at 41%, which is very close to the local minimum from May this year. The fear and greed indicator is at the neutral level of 53 points, which also speaks of the uncertainty of the current situation.
Binance is becoming a centralized business. Chanpen Zhao spoke of this in an interview. The reason is regulatory attacks from many countries around the world. It has already been seen that the company is moving in this direction, for example, after mandatory verification. Now, this has been officially announced.
The founder of Bridgewater Associates, Ray Dalio, thinks that cryptocurrencies will have massive success, the regulators will eventually take it under control. The path Binance is taking could become the norm in this kind of situation.
Not everyone in El Salvador agrees with the legalization of BTC as a legal tender. Residents of the country took to the streets on September 15 to protest against the legalization of cryptocurrency in the country and recent government actions. President Nayib Boekel has already admitted that they will not be able to create new infrastructure in 3 months. The registration of new users in the digital wallet Chivo has been suspended.
The bullish sentiment continues in the commodity market. Given historical examples, parabolic uptrends can be expected for certain assets. Usually, such a movement is typical for the cryptocurrency market. However, in the last week, the cryptocurrency market has gone into an indefinite sideways trend.
The stock market began to decline slightly, while the foreign exchange market is trading in different directions with the strengthening of the USD.