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GBP/USD drops to 1.2075 on downbeat UK inflationAs the UK inflation data disappoints, GBP/USD takes offers to refresh the intraday low near 1.2100, adding strength to the first daily loss in three days. Nonetheless, the UK Consumer Price Index fell 10.1% year on year in January, compared to 10.3% expected by the market and 10.5% previously. With this, headline inflation has fallen for the third consecutive month after reaching a 41-year high in October. More importantly, the Core CPI, which excludes volatile food and energy items, fell to 5.8% year on year, down from 6.2% expected and 6.3% in previous readings. Given the mostly negative UK inflation figures, as well as the mixed jobs report from the previous day, the GBP/USD could fall further, as Bank of England (BoE) officials have recently highlighted the data dependency for further rate hikes. Furthermore, a separate Reuters survey of economists predicted no more than one rate hike of 25 basis points (bps) in March before the BoE initiates policy pivot calls. Because Fed policymakers are comparatively more hawkish despite recent soft US inflation, the GBP/USD could face additional downside pressure. Alternatively, the Financial Times (FT) reported that UK Prime Minister Rishi Sunak and Finance Minister Jeremy Hunt are open to a deal with workers that includes a lump sum payment by backdating next year's pay award. This follows previous attempts by UK firms to raise labor pay in order to support inflation and put a floor under the GBP/USD price. Despite an unimpressive US Consumer Price Index (CPI), hawkish Federal Reserve (Fed) comments and a recovery in US Treasury bond yields appear to be exerting downward pressure on the Cable pair. Against this backdrop, US 10-year Treasury bond yields remain stable at around 3.75%, after rising three basis points (bps) the previous day to re-establish a six-week high, while the two-year counterpart follows suit by poking 4.62%, near 4.61% at the latest. However, the S&P 500 Futures fell half a percent, tracing Wall Street's losses and favoring the US Dollar's haven demand, allowing the US Dollar Index (DXY) to post its first daily gain in three days, up 0.27% intraday near 103.55 by press time. Following the initial market reaction to key UK data, GBP/USD traders should await US Retail Sales and Industrial Production details for January, as well as the NY Empire State Manufacturing Index for February, for clear direction. However, a few central bankers from the Fed and the BoE are scheduled to speak, which may entertain Cable traders ahead of Friday's UK Retail Sales.
Short
by FOREXN1
5
GOLD: Price Continues to Drop Also Today - SHORTGold price dropped yesterday to $1,850, its lowest level since early January. Soft United States Consumer Price Index could scale back hawkish Federal Reserve bets, allowing the yellow metal to rise, strategists at Commerzbank report. All eyes on the United States Consumer Price Index “The US inflation figures that are due to be published today could result in some price movement.” “Like our economists, the market expects the inflation rate in January to have fallen to 6.2%. If so, this would constitute the lowest increase in the CPI since October 2021. If the inflation rate turns out to be even lower, the market is likely to scale back its interest rate expectations again somewhat, allowing Gold to rise.”
OANDA:XAUUSDShort
by FOREXN1
21
EUR/USD: Possible Bearish Scenario Ahead.EUR/USD may slip back to 1.0650/1.0700 should core inflation come in at 0.4% or 0.5% MoM – ING So far, EUR/USD has advanced for the second session in a row, extending Monday's rebound past the 1.0700 level. The daily increase in the pair coincides with the continuation of selling pressure in the dollar ahead of the release of US inflation figures due later across the pond. Meanwhile, falling US yields across the curve are accompanying the daily retracement in spot, as are further range bound German 10-year Bund yields. Later in the day, another revision to Q4 GDP will be the region's only release on Tuesday. What to search for Following Monday's drop to the 1.0650 region, EUR/USD appears to have begun a decent bounce, though the resistance line around 1.0800 continues to cap occasional bullish attempts for the time being. Meanwhile, price action around the European currency should continue to closely track dollar dynamics, as well as the ECB's potential next moves after the central bank delivered a 50 basis point cut at its meeting last week. Returning to the eurozone, recession fears appear to be fading, but they remain an important driver of the single currency's ongoing recovery as well as the ECB's hawkish narrative. This week's key events in the eurozone include the ECOFIN meeting, EMU Flash Q4 GDP (Tuesday), EMU Balance of Trade, Industrial Production, and ECB Lagarde's speech (Wednesday). On the back burner: the continuation of the ECB's hiking cycle amid dwindling bets on a regional recession and still elevated inflation. The impact of the Russia-Ukraine conflict on the region's growth prospects and inflation outlook. Inflationary risks are becoming entrenched.
Short
by FOREXN1
14
GOLD:retreats towards $1,860 amid US inflation woesThe gold price (XAU/USD) remains depressed around $1,860 as sour sentiment underpins the US Dollar's early Monday rebound. Fears about US-China relations, as well as anxiety about the US Consumer Price Index (CPI) for January, could also put downward pressure on the XAU/USD. While expressing the mood, the S&P 500 Futures faded the previous day's corrective bounce off a one-week low, falling 0.35% to around 4,080 at the most recent close, while US 10-year Treasury yields remained sidelined near 3.73% after regaining a five-week high on Friday. It should be noted that fears about the mysterious objects flying over the United States and China have recently weighed on sentiment, even as the US General dismissed allegations against Beijing. The US General dismissed the market's fears of Chinese spying on the US and the likely rush to safe havens, saying, "(We) have no reason to believe the latest objects are Chinese." Nonetheless, the fact that the US shot down nearly four such objects while China prepares to launch one keeps the issue on the geopolitical agenda and raises the risk profile. In other news, Philadelphia Federal Reserve President Patrick Harker delayed talk of a Fed rate cut in 2023. However, the policymaker did state that the "Fed is unlikely to cut this year but may be able to in 2024 if inflation begins to fall." His remarks mostly echoed Fed Chair Jerome Powell's cautious optimism, challenging US Dollar buyers. However, the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) remain firmer around the monthly highs, supporting the hawkish Fed bias, which favors the US Dollar and puts downward pressure on the gold price. Moving forward, gold traders may see further declines, but the pace may be slow ahead of Tuesday's US CPI. If the US inflation data comes in higher than expected, hawkish Fed concerns could drown out the XAU/USD price. Alternatively, softer US CPI may rekindle policy pivot talks, causing the gold price to rise.
OANDA:XAUUSDShort
by FOREXN1
29
EUR/USD: Downside risks remain – OCBCIn the early European morning, the EUR/USD is consolidating losses below 1.0700. The currency pair is feeling the gravitational pull of a broadly stronger US Dollar and a risk-off marker profile. Investors are still concerned about the US-China trade dispute and the impending US CPI. EUR/USD lost more than 100 pips last week and is still consolidating below 1.0700 on Monday. OCBC Bank economists note that the pair is still under bearish pressure. 1.0490 is the level of support.
Short
by FOREXN1
20
USD/CAD:PULLBACK SUPPORT AREA - POSSIBLE NEW LONG The USD/CAD pair has firmly recovered after establishing a cushion of around 1.3340 in the Tokyo session. The Loonie asset has extended its recovery above 1.3370 as investors become nervous ahead of the release of the US Consumer Price Index (CPI), pouring funds into safe-haven assets due to investors' lack of appetite for risky investments. The US Dollar Index (DXY) has risen to a three-day high of 103.39, as risk appetite has weakened further. Meanwhile, the S&P500 futures have been impacted by disappointing earnings from US equities and geopolitical events such as the Pentagon shooting down two unidentified flying objects in the last week. Soaring expectations for a rise in US inflation data on Tuesday dampening demand for US government bonds, pushing 10-year US Treasury yields to 3.74%. Despite the Federal Reserve (Fed) squeezing activities and raising interest rates, the strong US labor market is bolstering expectations for a surprise upside in the inflation report. If this occurs, Fed Chair Jerome Powell may be forced to extend the Fed's policy tightening spell into its March monetary policy. In addition, Philadelphia Fed President Patrick Harker expects interest rates to rise above 5% this year. An upbeat employment report has conveyed that Canadian inflation may become more stubborn in the future. The economy added 150K jobs in January, exceeding the consensus of 15K and the previous release of 69.2K. The unemployment rate held steady at 5%. The catalyst that pleased the Bank of Canada (BoC) was a drop in Average Hourly Earnings data, which fell to 4.5% from 4.7% in the previous release. A drop in the labor cost index will squeeze consumer spending and reduce future inflationary pressures. After facing barricades of around $80.00 following a power-pack move, the oil price has dropped significantly. The upside appears to be favored, as Russia has announced a 5% cut in oil production in retaliation for the G7 price cap imposed to prevent funding for the ongoing war against Ukraine. It should be noted that Canada is a major oil exporter to the United States, and higher oil prices may strengthen the Canadian Dollar.
Long
by FOREXN1
3
Apple | Fundamental Analysis + NEXT TARGETApple has long been regarded as the company that Wall Street despises. Sure, there are many fans of the iPhone maker, but as soon as any unfavorable factors emerge, analysts scatter, with everyone predicting that Apple has reached the end of its growth phase and that its glory days are over. Until the next earnings report, when so-called surprises about how solid its business is unavoidable. For example, iPhone sales fell 8.1 percent to $65.8 billion in fiscal Q1, and Apple's overall revenue growth was the slowest since 2016, and many believe the tech titan's future is bleak. So, where do you see Apple in a few years? Will it, as its critics claim, give up, or will it be able to overcome obstacles and maintain its long-term growth trajectory? Most people still place themselves in the latter category, and here's why. Apple's earnings report was, admittedly, a little disappointing, but not entirely unexpected. Given the consumer electronics giant's supply chain constraints, iPhone sales, for example, may be considered better than they should have been. Due to plant closures in major Chinese cities, Foxconn, Apple's largest iPhone assembler, was under severe pressure, with employees forced to sleep in the factory due to travel restrictions. However, once China lifted the restrictions, Foxconn quickly resumed much of its production, and its January revenue reached a record $22 billion. iPhone sales were likely only pushed back for the March quarter, and production increased again, with CEO Tim Cook telling analysts that production "is where we want it to be right now." While Mac revenues fell sharply in the first quarter, as did wearable device sales, iPad sales increased sharply, indicating that there does not appear to be a widespread consumer demand problem. The main issue is supply, which has, for the most part, stabilized. Despite its problems, Apple was still growing in relation to the industry as a whole, gaining market share while the industry, including the iPhone industry, was shrinking. According to Gartner analysts, the decline in PC sales outweighed the decline in Mac shipments by a factor of two. In fact, it was "the steepest annual drop in shipments in Gartner's PC tracking history." Mac shipments were down 10% during that time period, but Asus was the best PC manufacturer, with shipments down 19%. Apple was the only manufacturer to see growth in 2022. Apple's market share increased from 8.6% to 10.7%. In wearable devices, Apple has a significant advantage over its competitors, with more than twice the market share of its closest competitor. Apple Watch has a 26% market share, while Samsung has a 12% share. Apple's installed base now exceeds 2 billion active devices, more than doubling from seven years ago. In terms of Apple's future, it's worth noting that services revenue for the quarter reached a record high of nearly $21 billion. This division includes the App Store, Apple Pay, and a variety of subscription services like iCloud, Apple TV+, and Apple Music. Last year was a record year for the App Store, with subscriptions increasing 21% to 900 million from 745 million the previous year. And, while service revenue growth slowed to 14% in 2022 from 27% in 2021, that period was part of Apple's and other companies' pandemic boom. Like the supply chain situation, this is simply a return to the mean. Although Apple stock has recovered 22% from its late-December lows, it is still 15% below its August highs. While this implies that Apple was a better buy in early 2023 than it is today, the tech company's stock is still a great business to own – with plenty of growth ahead, whether in three or ten years.
NASDAQ:AAPLLong
by FOREXN1
3
GOLD:Additional downward pressure Additional downward pressure On Thursday, the gold price confirmed a Bear Flag by closing the day below the rising trendline support at $1,871. The bearish continuation pattern has given gold sellers extra zeal as they challenge the critical 200 Moving Average at $1,855. "The downside bias remains favorable, with a sustained move toward the January 5 low of $1,825 anticipated if the $1,850 support fails." "Any recovery attempts will need to retake the bear flag support-turned-resistance at $1,871. The static resistance level at around $1,885 is the next stop for gold bulls."
OANDA:XAUUSD
by FOREXN1
22
EUR/USD:Breaking below 1.0681 would allow for another leg lowerBreaking below 1.0681/69 would allow for another leg lower. The EUR/USD has maintained key support at 1.0681/69. This supports our base case scenario of a long period of ranging, with this level expected to define the low end of a new range. The recent false breakout above key resistance at the 50% retracement of the 2021/2022 fall at 1.0944 adds to the possibility of a rangebound phase, with the sharp fall likely cleansing positioning significantly. The top of the range is now expected to be 1.1000/35. A break below 1.0681/69, on the other hand, would open up another leg lower, with no meaningful support until 1.0483/0463, where we would look for a floor if reached.
by FOREXN1
16
USD/JPY rises to 132.00 amid gloomy market sentiment.In the Tokyo session, the USD/JPY pair is approaching the critical resistance level of 132.00. The asset is seeing significant strength as a result of the risk-aversion theme and Bank of Japan (BoJ) Governor Haruhiko Kuroda's preference for expansionary monetary policy. The US Dollar Index (DXY) is aiming to break through the 103.00 resistance level as demand for safe-haven assets grows. Despite a two-day sell-off, risk-perceived assets such as S&P500 futures are seeing selling interest. The focus has shifted to the United States Consumer Price Index (CPI) data, which will be released on Tuesday. The consensus predicts that headline inflation will fall further to 5.8% on an annual basis, down from 6.5% in the previous release. In addition, core inflation, which excludes the impact of oil and food prices, is expected to be 5.3%, down from 5.8% previously. However, remarks from Richmond Fed President Thomas Barkin and the lowest January unemployment rate could surprise investors. Fed According to Reuters, Barkin argued that the Fed should steer "more deliberately" from here due to the lag effects of policy. "While average inflation has peaked, the decline has been distorted by a few goods, and the median has remained high," he added.
by FOREXN1
10
GOLD:Bear flag, hawkish Federal Reserve concerns tease sellersFollowing a three-day uptrend, the gold price (XAU/USD) struggles to extend week-start recovery moves, making rounds to $1,875 during Thursday's Asian session. The lack of buying interest in gold could be attributed to hawkish Federal Reserve (Fed) comments, as well as statements from US diplomats highlighting inflation fears. However, the easing of US-China ties and a light calendar test the XAU/USD bears, while technical analysis teases the Gold sellers. Technical analysis of the gold price The gold price (XAU/USD) remains within the weekly ascending trend channel, while the hourly chart displays a "Bear flag" bearish chart pattern. The bearish bias on the XAU/USD is bolstered by negative signals from the Moving Average Convergence and Divergence (MACD) indicator, as well as the steady Relative Strength Index (RSI) line at 14. However, a downside break of $1,870 appears to be required for Gold sellers' conviction, while the weekly bottom around $1,860 can act as an additional filter to the south. Following that, the XAU/USD bear focuses on the theoretical target of the stated "Bear flag," which is around $1,780.
OANDA:XAUUSD
by FOREXN1
21
After reversing the corrective bounce, the EUR/USD remains lowerEUR/USD remains under pressure around 1.0710, following a reversal from 1.0760, as bears maintain control for the fifth consecutive day on Thursday. In doing so, the major currency pair validates policymakers at the European Central Bank (ECB) and the Federal Reserve (Fed). It is worth noting that the relatively upbeat US data compared to Europe appears to support the Fed's hawkish comments and weigh on the EUR/USD price. However, Federal Reserve Governor Christopher Waller hinted at a protracted battle with a 2.0% inflation target by citing expectations of tighter monetary policy for a longer period of time than expected. In a similar vein, Governor Lisa Cook stated that the central bank is still focused on restoring price stability because inflation is still too high.
by FOREXN1
14
XAU/USD in correction mode – CommerzbankThe US dollar maintained its gains from February during the first half of the day, but lost ground unevenly in the last trading session when Jerome Powell, the chairman of the US Federal Reserve, took part in a presentation at the Economic Club of Washington, DC. Jerome Powell, the chairman of the Federal Reserve, began reiterating his hawkish stance, saying they would likely need to make additional interest-rate rises and adding that the process will be "bumpy." The market accepted Powell's idea that the Fed would raise rates in response to data that were stronger than expected. As an instant response, Wall Street surged while the US dollar sank.
OANDA:XAUUSDShort
by FOREXN1
12
EUR/USD: The Exchange is fluctuating between the 50% and 61.8%As traders wait for the preliminary German inflation statistics to be released, the EUR/USD pair is fluctuating in a very small range near 1.0730. The State of the Union (SOTU) remarks made by US President Joe Biden regarding the ongoing dispute with China had no effect on market players' willingness to take risks. Weighed down by US Treasury yields, the US Dollar Index (DXY) is exhibiting a sideways performance below 103.00. The 10-year US government bond yields have fallen below 3.65%. The preliminary German Harmonized Index of Consumer Prices (HICP) for January in the Eurozone is predicted to increase from the previous release of 9.6% to 10.0%. Following an erratic movement following remarks on interest rate guidance from Federal Reserve (Fed) head Jerome Powell, the EUR/USD pair has since gone sideways. The major currency pair is anticipated to experience a sharp decline in volatility in the near future, which will lead to wider ticks and high volume after an increase in the same. The exchange rate is fluctuating between the 50% and 61.8% Fibonacci retracements.
Short
by FOREXN1
12
USD/JPY: US Vice President Biden pledges to defend US interestsAs US Vice President Biden pledges to defend US interests against China, the USD/JPY recovers from 131.00. After correcting below 131.00 during the Asian session, the USD/JPY pair has noticed a buying activity. In response to comments made by US President Joe Biden during his second State of the Union (SOTU) speech and first in front of a split Congress, the asset has seen an increase in demand. The USD/JPY pair retreats a few pips from a three-week high reached earlier this Monday as it tries to take advantage of its somewhat positive gap opening. The pair is currently trading slightly below the 132.00 level, yet up more than 0.50% for the day, and it appears that it will continue to appreciate.
Long
by FOREXN1
11
TESLA: Fundamental Analysis + Next TargetOne of the most popular stocks today is undoubtedly Tesla. Some will tell you that it is simply an overvalued automaker, while others will claim that it is a technology company that makes cars. In reality, it is a mixture of both, but investors must determine which option carries more weight. In 2022, the stock fell 65%, which gave the company's detractors exactly the result they expected. Since the beginning of 2023, however, they are already up 35%, further spurring Tesla and Musk fans. So is this a signal to buy Tesla stock? Or has the stock (once again) risen too much and too fast? Let's get to the bottom of this. CEO Elon Musk, who holds this position at Twitter, SpaceX, and many other companies, is at the center of Tesla's criticism. If you're not hiding your head in the sand, it's pretty obvious that Musk has spent a lot of time improving his new $44 billion toy, Twitter. What's worse, about 50 Tesla engineers have volunteered to work for Twitter. Obviously, this can be a bit of a distraction, and it has worried many investors. However, Tesla's latest quarterly results seem to have allayed those concerns. Tesla's Q4 production was quite impressive. While the production numbers are impressive, there are still a few numbers that may worry investors. First, the number of days of inventory (how many days it will take Tesla to run out of current car reserves) rose to 13 days, up from eight days in Q3 and four days in Q2. One could argue that 13 days is still a relatively small stockpile, but investors should keep an eye on this figure to keep it from reaching egregious levels. This would mean that Tesla is producing cars, but there is no consumer demand for them. For historical reference, that figure rose to 31 days in Q1 of 2019, so Tesla still has a lot to strive for before reaching that threshold. Another issue that investors pointed to was the pressure on Tesla's margins. Tesla's gross margin fell to 25.9% in Q4, the lowest in five quarters. Falling gross margins could indicate rising input costs or weak pricing power, and as Tesla lowers prices on its models, that figure will come under additional pressure. Nonetheless, CFO Zack Kirkhorn said during the conference call that Tesla expects future gross margins to be at least 20 percent, even with lower prices. This move will likely cause the auto industry's gross margin to fall to its lowest point in five years in 2023. Lower gross margins mean less capital to make a profit, but Tesla made up for it by cutting operating expenses by 16%, something few other companies can say for themselves in Q4. These savings allowed Tesla to post Q4 earnings per share (EPS) of $1.07 - up 57%. So even though Tesla investors need to watch out for a few items - margins and inventories - financially the quarter was excellent. But even the best companies bought at the wrong price can be a bad investment, so is it time to buy Tesla? At its core, there is a huge gap between how bears and bulls think Tesla should be priced. Tesla is currently trading at 49 times its earnings, which isn't too bad compared to the 100 times or more it was trading at in 2021. However, if you look at Tesla's projected price to earnings (P/E), you see a different trend. Since Tesla's trailing P/E ratio is about the same as its forward P/E, analysts believe that Tesla's earnings will barely rise from the 2022 level. In 2023, Tesla plans to achieve a 50% compound annual growth rate in vehicle deliveries from 2020, which means about 1.7 million deliveries in 2023, or 29% more than in 2022. Even with a slight decline in gross margins, if Tesla can meet its delivery target, it will likely beat earnings forecasts, making the stock seem cheaper than it actually is. Nevertheless, 45 times earnings projections is not a cheap price for any company. If you have your heart set on Tesla over the long term, buying the stock now and holding on to it (while you watch the business grow) may be a smart move. However, valuation is still a risk, and if Tesla falters and fails to meet its projections, the stock could sell off quickly. Tesla is far from the safest asset, but at these levels, it still represents an intriguing investment opportunity.
NASDAQ:TSLALong
by FOREXN1
25
XAU/USD: Possible Values Decline for the Yellow metalAs the Dollar continues to retrace its steps from four-week highs, the gold market hopes to capitalize on recent recovery gains. Will XAU/USD break $1,850 during Powell's speech as Fed Chair? As investors stay away ahead of Jerome Powell's speech, the US dollar is currently declining from monthly highs. His remarks are likely to spark a new bout of volatility, which could provide the USD a new lift at the expense of Gold.
OANDA:XAUUSD
by FOREXN1
18
EUR/USD holds above 1.0700, eyes on PowellEarly in the European session, the EUR/USD dipped around 1.0700 but held above it. Jerome Powell, the chairman of the FOMC, and other ECB officials are scheduled to speak to the public soon. Until then, the pair is unable to decide which way to go. The Fibonacci 61.8% retracement level of the most recent rise for the EUR/USD remains within touching distance, and the Relative Strength Index (RSI) indicator on the four-hour chart maintains an oversold reading below 30. Yesterday, February 6, a moderately negative sentiment prevailed on global stock markets as investors were concerned about the prospect of further monetary policy tightening by the leading central banks. Thus, the head of the ECB Christine Lagarde said last week that in March the markets should expect another raise of 50 bp. She also stressed that the European regulator is prepared to set rates at any level for achieving the goal of 2% inflation in time. Head of the Federal Reserve System Jerome Powell, while noting that he sees signs of lowering price pressures, said that it is appropriate to continue raising rates. At the same time, strong January data on employment in the United States, which showed a jump in the number of jobs by more than half a million, showed on Friday that the Federal Reserve has all the arguments to maintain a tight monetary policy for a long time. We should also note that some pressure on stocks at the end of last week was put by disappointing reports from U.S. tech giants Amazon and Alphabet.
Short
by FOREXN1
13
USD/JPY: 120 looks like the target this year – INGIn the view of economists at ING, USD/JPY should continue to fall throughout the year. They target 120. The BoJ is back on the map “The Bank of Japan is now garnering much more focus than it has in years. Most pressing is the replacement of Governor Haruhiko Kuroda, who leaves in April. A successor will be presented to parliament on 10 February. The favourite, Deputy Governor Masayoshi Amamiya, is seen as the dovish continuity candidate.” “Any surprise choice of the more hawkish Hiroshi Nakaso could probably send the Yen a lot stronger, with pressure building for 10-year JGB yields to burst above their current 0.50% ceiling.” “USD/JPY has mainly been driven by the weaker Dollar story, but 120 looks like the target this year, helped by the BoJ and lower energy prices.”
by FOREXN1
5