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Hey Traders,
Market has been relatively quiet throughout the week until Friday where the Fed appeared to plant a Wall Street Journal story of downplaying the odds of another 75 bps hike in December. In addition, there was a suspected intervention of the Japanese government on the Yen which shifted the market to risk on, where the Dollar dipped while the equities market soared. The market closed the week at a very interesting point which we will analyse deeper in this week post.
The upcoming economic release will be heavy which all of you should take note of as expected volatility will be high.
Upcoming Economic Release:
USD/JPY
The weakening of the United States Dollar is likely due to the intervention of the Bank of Japan (BOJ) and the government. The price movement of the USDJPY is close to movement of the previous intervention. From our viewpoint, we believe the USDJPY will continue its move up unless there is further intervention of the Japanese government.
S&P500 Intraday Time Frame
The S&P500 has been trading in the range near the key support region at 3550. A breakout of the 3800 resistance region could spell more upside movement of the equities market. This could be supported by the weekly time frame of the S&P500 below.
S&P500 Weekly Time Frame
As we see from the weekly time frame of the S&P500, the downward movement is at a extended level using the 50 exponential moving average (EMA) as a reference. If price were to breakout of the 3800 region as we have identified in the intraday time frame, we could potentially see price move back towards the 50 EMA. As we are near the end of the month, the monthly time frame of the S&P500 provides us an interesting insight below.
S&P500 Monthly Time Frame
When price met the 50 exponential moving average (EMA) and formed at least a piercing line candlestick pattern, price moves towards the upside. If the October candlestick of the S&P500 were to close at least 50% of the previous month candlestick, we are likely to see a reversal movement of the equities market.
Dollar Index (DXY)
The United States Dollar reversed from the minor resistance region around 113.8 and ended the week at the minor support region around 111.78. A breakout confirmation of the mentioned resistance or the support level may provide us with the next short term direction of the Dollar.
Spot Gold (XAU/USD)
As mentioned on our previous post, Gold fell but reverses from the recent short term support level at 1621 region towards the 1660 resistance region. The reversal price movement was strong, similar to what has happened earlier. Using the previous scenario as a reference, we may potentially see a retracement in price back to the 1644 region.
Trade Recap
WTI Futures - Front Month (Analysis 42-1)
Recap (Week 42 - Last Week) Take Profit - 1
Long position reached Take Profit - 1 level where we announced to close / partial / risk free.
Dollar Index (DXY) - Exclusive Trade
Recap (Week 42 - Last Week) Take Profit - 1
Long at market position reached Take Profit - 1 level where we announced to close / partial / risk free.
Trade Analysis / Setups
Soybean Oil Futures - Front Month (Analysis 43-1)
Analysis: Price is slightly overextended where we believe will begin trading in consolidation. We will look to trade along with the trend by entering near the support region.
Long opportunity: Reversal confirmation at 69.65 support region towards 71.71 as Take Profit - 1 level.
Cheers to all our member who managed to pack some profits this trading week.
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Stay safe out there and safe trading!