Bullish Market Continues As Economic Expectation Improved

Commodity

Summary:

The Chinese New Year is approaching, so try to manage the risk when following the trend to go long.

BUY WTI

Close Time

CLOSED

78.000

Entry Price

83.500

75.000

75.706 +0.610 +0.81%

134.5

Pips

Profit

75.000

79.345

Exit Price

78.000

Entry Price

83.500

Fundamentals

On Jan 17th, China's National Bureau of Statistics announced that China's economic volume exceeded 120 trillion CNY in 2022, reaching 121 trillion CNY, up 3.0% from the previous year. In 2022, the national fixed asset investment scale exceeded 57 trillion CNY, up 5.1% from the previous year, with a growth rate of 0.2% faster than in 2021.

The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report that it forecasts global economic growth of 3% in 2022 (previously forecast was 2.8%). Besides, global economic growth is expected to be 2.5% in 2023 (unchanged by previous forecasts). Also, China's oil demand is expected to grow by 510,000 barrels per day this year, and global oil demand growth in 2023 will be 2.22 million barrels per day.

Some of the foreign investment banks that previously called for a very strong global recession have recently started to turn, perhaps triggered by the liberalization of the pandemic in China and the energy crisis in Europe that did not work out as expected. Even the unanimous expectation of the U.S. recession now sees the dawn of a soft landing of the economy, the number of new nonfarm payrolls is generally better than the market expectations. In addition, the unemployment rate is lower than the market expectations, meaning that the labor market is still strong, while nonfarm hourly earnings exceeded expectations and the CPI fell for 3 consecutive months, MoM. Overall, the optimistic expectations of the domestic oil market continue to strengthen, which boosted the oil market significantly, and further influenced the global market. Such a strong market is beyond many investors' expectations, which also reminds investors to maintain respect for the market. Meanwhile, the Chinese New Year holiday is getting closer, and investors shall try to manage the risk when following the trend to go long.

Technical Analysis

Regarding the daily chart, WTI surged unilaterally. Furthermore, MACD's bullish divergence signals continued, and the golden cross expanded without any overbought signals. Additionally, the moving averages are lining up in a bullish trend shortly, with the oil price expected to test the resistance near 83 above, which is near the high on December 1st last year. Moreover, the initial support below is at 80, which is also close to the 5-day moving average, and the strong support is near the 10-day moving average of 77.6. If WTI declines near this support, the short-term topping signal will be increased. WTI: Bullish Market Continues As Economic Expectation Improved_1

WTI: Bullish Market Continues As Economic Expectation Improved_1

Trading Recommendations

Trading direction: Long

Entry price: 78.000

Target price: 83.500

Stop loss: 75.000

Support: 80.000/77.600

Resistance: 83.500/93.000

Risk Warnings and Investment Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.

Uptrend supported by CPI

Saif

Forex

Summary:

The Canadian dollar Inflation rate CPI Has been released with negative results It was lower than the previous month and the expectation as well at 6.3%, On the other hand, tomorrow we have in the economic calendar inflation rate CPI in the Europe zone with Positive expectations for the euro.

BUY EURCAD

Close Time

CLOSED

1.44930

Entry Price

1.46429

1.44075

1.49145 -0.00009 0.00%

12.4

Pips

Profit

1.44075

1.45054

Exit Price

1.44930

Entry Price

1.46429

Fundamentals

Canada CPI YoY (Dec)

Previous 6.8% Actual 6.3%

Eurozone Core CPI Final YoY (Dec)

Previous 6.6% Expected —----

Eurozone HICP Final YoY

Previous 10.1% Expected 9.2%

Trading Recommendations

We can see in the four - hour diagram chart, That the Market is trending up by creating a higher high and higher low Market price is now at 1.45426 we expect the market will pull back To the previous demand zone at 1.44930 to create a new higher low and will continue climbing up to the oldest support zone at 1.46429 to make a new higher high with 20 moving average pointing up.

Trading Direction: Long

Entry Price:1.44930

Target Price:1.46429

Stop Loss: 1.44075

Risk Warnings and Investment Disclaimers

Bear Orders for Uncompleted Tests Have Led to Premiums on the Spot, while Gold Prices Are Expected to Return to the Average

Eva Chen

Commodity Central Bank

Summary:

Gold fell slightly on Tuesday for the second day in a row, remaining sluggish as it entered the European session and further away from the previous day's high of US$1,928 since April. Gold is expected to return soon as there are bear orders for unfinished tests at US$1,842. Nevertheless, gold prices have started the year strongly; With the support of China's reopening, both investment and physical demand supported the gold price in 2023.

SELL XAUUSD

Close Time

CLOSED

1907.58

Entry Price

1840.00

1930.00

2024.51 +10.48 +0.52%

53.2

Pips

Profit

1840.00

1902.26

Exit Price

1907.58

Entry Price

1930.00

Fundamentals

Gold prices were strong at the beginning of 2023, up 3.5% in the first two weeks. Gold will continue to be favored as inflation falls and interest rates approach their peak. We have a constructive view on gold over the next 12 months, but if the Fed acts unexpectedly hawkish, there could be an adjustment in the near term.

The recent rally in gold prices still looks vulnerable to price adjustments, as it is largely driven by expectations that the Fed will turn to doves. We expect the Fed's interest rate hike cycle to stop in the second quarter of 2023 as there are signs that inflation has exceeded its peak. At its meeting in December, the Fed raised its target interest rate band by 50 basis points, raising the cap to 4.5%. This is a modest adjustment after four consecutive 75 basis point rate hikes.

U.S. headline inflation fell to 6.5% in December from a peak of 9.1% in June. Inflation is expected to continue to fall this year as cardinal utility and commodity supply improve. However, the Fed could find it difficult to bring inflation back to its 2% target, as service sector inflation remains high and will take some time to subside. We believe that the Fed will not give up its efforts to control inflation expectations, so it should keep interest rates at 5% until 2024. This runs counter to market expectations of a rate cut by the end of 2023 and leaves room for price adjustments. We believe that the simultaneous easing cycle will begin in 2024.

With higher interest rates and lower inflation, real interest rates may rise in the near term, but we do not think this will constitute a strong resistance to gold prices, as the inverse relationship between gold and real interest rates has been weakening over the past year.

Since 2000, the price of gold has fallen by 13% for every 100 basis points increase in the real yield on U.S. 10-year Treasury Securities. Since 2018 and 2020, this sensitivity has been reduced to 3% and 1% respectively for a 100-basis-point change in the 10-year real yield. By 2022, the 10-year real yield had increased by 260 basis points, while gold remained largely unchanged. This can be explained by various shocks such as the U.S.-China trade war, the COVID-19 pandemic, and the Russian-Ukrainian war.

On the physical demand side, strong physical demand has been mitigating the impact of the institutional sell-off over the past two years as stagflation and geopolitical risks encouraged investors to buy.

With the reopening of China, we expect this demand to continue to grow in 2023. In the first three quarters of 2022, the lockdown reduced jewelry and retail investment demand by 15% YoY. With the easing of the lockdown and restrictions, we saw a moderate recovery in the third quarter, which created a favorable background for the recovery of physical gold demand this year.

In the short term, due to the replenishment before the Chinese New Year, the trading volume of gold on the Shanghai Futures Exchange showed a seasonal increase, but the trading volume was still lower than the seasonality in recent years. At the same time, net bulls of speculators increased their holdings to a 12-month high. China's traffic looks strong, well reflected in the spot premium of US$47-63.

XAUUSD: Bear Orders for Uncompleted Tests Have Led to Premiums on the Spot, while Gold Prices Are Expected to Return to the Average_1

Technical Analysis

Gold unexpectedly rebounded to US$1,928 after breaking the resistance levels of US$1,900 and US$1,878 and was well above the 200-day SMA; Before that, the momentum appeared to be quite strong before the price topped US$1,800. However, prices need to remain stable above US$1,900 to maintain this momentum. We believe that the current macro environment is not sufficient to maintain the current price level.

In the technical charts, the price shows the pattern of a rising wedge. A large part of the reason for this pattern is the increase in premiums caused by forced purchases by institutions. The upward trend was further broken after prices stabilized above US$1,900 last Friday, pushing up the premium. Before that, the bear orders of US$1,842 failed to complete the test, indicating that there is still much room for a price adjustment. We would not be surprised if the price dropped from its current to US$1,842. With the price falling below US$1,824, we expect the trend to reverse. When it is below US$1,800, it is further confirmed that a downward trend is formed. It is recommended to go short at the highs for the current premiums, thus confirming the price to fall back to US$1,730.

Trading Recommendations

Trading direction: Short

Entry price: 1912

Target price: 1840

Stop loss: 1930

Deadline: 2023-01-31 23:55:00

Support: 1902, 1891, 1886, 1865

Resistance: 1918, 1921, 1929

Risk Warnings and Investment Disclaimers

The Economy May Have a Soft Landing and the Dollar Rebound Can Be Expected

Damon

Forex Central Bank

Summary:

The performance of the US economy will gradually improve in the first quarter of 2023, and the Dollar Index may be expected to bottom out.

BUY USDX

Close Time

CLOSED

101.800

Entry Price

106.000

99.000

103.098 -0.154 -0.14%

157.4

Pips

Loss

99.000

100.226

Exit Price

101.800

Entry Price

106.000

Fundamentals

Generally speaking, the market in January and February has extended the trading logic of the Fed’s decelerating rates hiking, which is close to the end. Coupled with the relative weakness of the US economy and the Fed's rates hiking overtaken by the European Central Bank, the Dollar Index is still dominated by shock bottoming. However, New Non-Farm Payrolls reported in January 2023 were better than market expectations, with the unemployment rate being lower than anticipations, which reflects the fact that the labor market remains strong. Meanwhile, the dawn of a soft landing for the economy has appeared, as Non-Farm Hourly Wages fell more than expected, and CPI kept sliding for three consecutive months year-on-year. Therefore, current issues on the direction of interest rates will trigger a fierce game between the market and the Fed, which will be determined by the resilience of the US economy and the stickiness of inflation. As the Fed not only focuses on core inflation but also on core services as well as wages, it is necessary to pay close attention to the relevant economic data released before the March interest rate meeting.

Technical Analysis

Trading at the daily chart, the Dollar Index has now retraced to important support levels. The 102 line is a 50% retracement of the upward band launched in 2021, with lower support located around the 100 integer mark. If the Dollar Index can gradually pause falling and stabilize at 100-102, it is still more likely to rebound. For now, the price is temporarily supported at 102, which cannot be ruled out for the chance to fall around 101.3 in the later period. However, since the MACD indicator has been hovering in the oversold zone for a long time, resulting in a lack of energy, further external stimuli are required to continue the down trend.

USDX: The Economy May Have a Soft Landing and the Dollar Rebound Can Be Expected_1

Trading Recommendations

Trading Direction: Long

Entry Price: 101.800

Target Price: 106.000

Stop Loss: 99.000

Support: 101.500/100.000

Resistance: 105.800/109.300

Risk Warnings and Investment Disclaimers

Markets Focus on Central Bank Meeting, Beware of Big Swings

King Ten

Forex

Summary:

The current market is overly traded, and we should be wary of a stampede after the market's overly consistent expectations fall through.

BUY USDJPY

Close Time

CLOSED

128.000

Entry Price

135.000

124.000

148.401 -0.229 -0.15%

281.9

Pips

Profit

124.000

130.819

Exit Price

128.000

Entry Price

135.000

Fundamentals

This week's main focus remains on the Bank of Japan (BOJ) 's meeting on Wednesday. The market expects that the yield curve control (YCC) policy may be adjusted again at this BOJ meeting, short-Japanese-bonds traders pressed on and traded early. The Japanese 10-year bond yield rose for the second day in a row above the ceiling set by the Bank of Japan at 0.5%, and CFTC positions also showed that yen longs are increasing. The end of the YCC will prompt bets that the Bank of Japan will soon exit the era of negative interest rates. This will become a new catalyst for long yen trading, most likely after Kuroda's term ends in April. The real volatility will spike again, with overnight USDJPY volatility rising to 54.35%, the strongest level since the global financial crisis. This week's yen is destined to be a big volatility market.

Overall, the recent long yen and short-Japanese-bonds market trading is overfull, which means to kidnap BOJ to withdraw from YCC. However, BOJ has always acted by surprise. In case the meeting has a dovish tone, there will be a great contraction of the short position of USDJPY. We should be wary of a stampede after the market's overly consistent expectations fall through.

Technical Analysis

In the daily chart, the current trend is still short. From the USDJPY market, the previous double-bottom pattern was broken in the short term, falling below 130 and completing the fifth wave of decline after which the downward momentum will slow down. At the same time, it is noted that the MACD has been oversold at the bottom for nearly 2 months. In the short term, there is a greater downward resistance, and the market is inclined to further bottoming out later. The big upper resistance is around the 135 mark and the high of 138.17 on December 15; in the short term, the resistance above is near the 130 integer mark. USDJPY: Markets Focus on Central Bank Meeting, Beware of Big Swings_1

USDJPY: Markets Focus on Central Bank Meeting, Beware of Big Swings_1

Trading Recommendations

Trading Direction: Long

Entry Price: 128.000

Target Price: 135.000

Stop Loss: 124.000

Support: 125.000, 120.000

Resistance: 130.000, 135.000

Risk Warnings and Investment Disclaimers

Weak Trend Is Emerging with Struggling High Levels of Copper Prices

King Ten

Commodity

Summary:

Copper prices are strong in performance, supported by strong expectations, but the weak trend is difficult to change in the short term. Copper's supply and demand may gradually show a surplus, and the risk of short-term retracement is gradually intensifying.

SELL COPPER

Close Time

CLOSED

9120.000

Entry Price

8200.000

9500.000

8447.695 +67.200 +0.80%

38000.0

Pips

Loss

8200.000

9500.005

Exit Price

9120.000

Entry Price

9500.000

Fundamentals

Foreign media on January 8: Copper prices will fall 5.7% in 2023 due to weak growth and high energy prices putting pressure on demand, according to the Australian government's resources quarterly released last month. The report noted that the weak economic outlook could affect copper growth. Global inflation continues to plague major economies. Central banks in most developed countries continue to tighten monetary policy, which could affect economic growth and copper demand. While many U.S. macroeconomic indicators remain strong, signs of weakening demand are beginning to emerge. Europe's growth weakness is more pronounced because of the impact of the Russian-Ukrainian conflict. China is an exception, however, with low inflation allowing for greater flexibility in economic stimulus measures. The report expects global copper consumption to increase by 2.9% in 2023 and 3.0% in 2024, both up from 2.4% in 2022.

Industry: According to media reports, the technical improvement project of the Kamoa Project has advanced beyond schedule, and the final stage of loading work is being carried out. It is planned to conduct a joint trial in April 2023, to accelerate the realization of the comprehensive design capacity of Phase I and Phase II processing plants to increase to 9.2 million tons/year, and the copper capacity to about 450,000 tons/year. With the increasing production capacity, the project team estimates a target of 390,000 to 430,000 tons of copper-bearing concentrate from Kamoa-Kakura in 2023. China's copper resources are relatively poor, accounting for approximately 3% of the global total, and have poor resource endowment conditions. However, China is the world's largest copper consumer, and the huge volume of production capacity in China's refined copper industry brings huge demand for copper concentrate, and the degree of foreign dependence on copper concentrate is increasing year by year. Kamoa-Kakura copper mine is becoming the biggest guarantee for China's copper consumption.

Overall, the current Chinese Spring Festival holiday is approaching, and downstream consumption is becoming more sluggish. In January, the weak demand in China and the recovery of supply will lead to a seasonal increase in inventory. The overseas economy continues to be weak with signs of recession, and the supply and demand may gradually show a surplus. The current copper market is strong under the support of strong expectations, but the weak trend is difficult to change in the short term. Later, it is needed to pay attention to the degree of the realization of strong expectations. The recent surge in copper price has been weak, and the risk of short-term retracement is intensifying. Copper prices may be volatile accompanied by a dip, and the gradual realization of the weak trend is accompanied by a sharp decline on the plate. This stage may occur in the obvious accumulation period.

Technical Analysis

In the daily chart, copper prices on January 5 from around 8200 increased to a high level near 9250, up nearly 1050 points or nearly 13%. Driven by the current sentiment, copper prices have seen six consecutive long white bodies. However, after the Doji appeared on January 13 consecutive downward 2 days, the top form is obvious, and copper prices are relatively weak. Given that prices are at the upper edge of the box and the MACD is still in overbought territory, it is recommended to beware of a continued retracement. COPPER: Weak Trend Is Emerging with Struggling High Levels of Copper Prices_1

COPPER: Weak Trend Is Emerging with Struggling High Levels of Copper Prices_1

Trading Recommendations

Trade Direction: Short

Entry Price: 9120

Target Price: 8200

Stop Loss: 9500

Support: 8500, 8200

Resistance: 9200, 9500

Risk Warnings and Investment Disclaimers

King Ten

Analyst

Focus on macroeconomic analysis with extra attention to the geopolitical impact on financial markets.

Ranking

Articles

316

Win Rate

0.00%

P/L Ratio

0.34

Focus on

XAUUSD, WTI, COPPER

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Bullish Market Continues As Economic Expectation Improved

Fundamentals

Technical Analysis

Trading Recommendations

Uptrend supported by CPI

Fundamentals

Trading Recommendations

Trading Direction: Long

Bear Orders for Uncompleted Tests Have Led to Premiums on the Spot, while Gold Prices Are Expected to Return to the Average

Fundamentals

Technical Analysis

Trading Recommendations

The Economy May Have a Soft Landing and the Dollar Rebound Can Be Expected

Fundamentals

Technical Analysis

Trading Recommendations

Markets Focus on Central Bank Meeting, Beware of Big Swings

Fundamentals

Technical Analysis

Trading Recommendations

Weak Trend Is Emerging with Struggling High Levels of Copper Prices

Fundamentals

Technical Analysis

Trading Recommendations

Strong Support Bulls Taking Over

TRADE RECOMMENDATION

Risk Disclosure