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Hey Traders,
Market experienced euphoria after Powell delivered his speech on Wednesday session, indicating the likelihood in slowing of rates as fast as December. Expectation for December rate hike now stands strong at 50 basis point instead of the potential 75.
Markets now rests at key technical level with the S&P500 and Gold at resistance level and the Dollar Index at key support level. A breakout confirmation of one of these assets can spur the next direction for risk on or off and may provide exogenous signal.
The PPI and the University of Michigan Consumer Sentiment will be the main highlight for next week.
Upcoming Economic Release:
S&P500 Futures
The S&P500 Index closed the week at the key resistance region, slightly above the Daily 200 period Simple Moving Average (SMA) and the descending trend line. Short term bullish trend remains intact although slightly extended with momentum seem to be slowing down. A shift in short term trend can be confirmed when price breaks out of the 3960 support region which will also invalidate the short term ascending trend line.
Earlier on October, we have posted the weekly analysis indicating to look out for a potential upside for the S&P500 due to the candlestick reversal confirmation on the Weekly 50 period Exponential Moving Average (EMA) as shown above. Initial profit target would have been met as we are at key resistance level.
Dollar Index (DXY)
The United States Dollar Index remains under pressure throughout the week while having a momentarily breakout of the key support region at 105.0. Last Friday's candlestick closed with a wide shadow with a small body, possibly showing sign of market indecision. With this, reversal towards the upside is still likely but only with confirmation and keep stop tight.
Gold Futures
In our previous post, we have highlighted that Gold is likely to continue towards the upside due to the technical confluence that it was displaying. Gold had a good run towards the upside, reaching the 1820 key resistance region. However, price is over extended and may experience some pullback for the Daily 50 period Exponential Moving Average to catch up.
Trade Recap
NZD/CAD (Analysis 48-1)
Recap (Week 48 - Last Week) Stopped
NZD/CAD short at market reopening position got stopped out.
Corn - Front Month (Exclusive Trade)
Recap (Week 48 - Last Week) Stopped
Corn long at market position got stopped out.
Trade Analysis / Setups
Gold Futures - Front Month (Analysis 49-1)
Analysis: Price is now trading at resistance level where we will take a reversal trade only if the support region is breached.
Short opportunity: Breakout and retest confirmation at 1789.5 support region towards 1747 as Take Profit - 1 level.
Corn Futures - Front Month (Analysis 49-2)
Analysis: Price has broke out towards the downside. However if price shows sign of reversal at the new resistance zone at 655.5, we will trade along with the new trend.
Short opportunity: Retest confirmation at 655.5 resistance region towards 639.0 as Take Profit - 1 level.
Being wrong in the financial market is part and parcel of trading. A couple of stopped out trades this week due to their high risk nature, but lets look forward to the final month of this year. Trade safe.
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Stay safe out there and safe trading!