Vantage Global

Chart of the Day – Gold tries to rebound

19 November

👉🏽 The yellow metal suffered its worst weekly drop in more than three years. Trump’s election victory caused the dollar to surge, halting bullion’s record-breaking run.
👉🏽 Gold advanced more than 35% in 2024 but prices sunk around 7% this month with over a 3% slide the day after the election.
👉🏽 Higher inflation, so expectations of fewer rate cuts have seen bond yields go higher.
👉🏽 ETFs saw their biggest outflows since May in early November. Money has been switched into bitcoin, which is attracting haven flows normally seen in gold.
👉🏽 The clear cut election win has taken uncertainty out of the market. The surging dollar likely also dampens demand from central bank buying which has been a big driver of prices.
👉🏽 The 50% mark of the June rally is at $2533. The 100-day SMA is just above at $2550 with the 50-day SMA at $2655.

Chart of the Day – Gold volatile and choppy since election

8 November 2024

👉🏽 Gold has surged over 30% this year with a combination of drivers.
👉🏽 Rate cut optimism has eased back recently, but its haven status amid heightened geopolitical tensions and the US election have helped.
👉🏽 Ongoing central bank buying and solid Asian purhcases have also propelled bullion higher.
👉🏽 Bullish bets from hedge funds – hovering around four-year highs, with gold-backed ETF holdings posting a fifth consecutive month of gains in October – have aslo boosted bugs.
👉🏽 The US election is expected to bring a strogner dollar yields, which may not help the bulls. But fiscal and debt sustainability question plus foreign reserve diversifaction can underpin support.
👉🏽 After making new highs at $2790, prices tumbled after the election result back to the first minor retracement Fib level (23.6%) of the May to October move is at $2669. The 50-day SMA sits below at $2639 with the next Fib level (38.2%) at $2594.

Chart of the Day – Dow trades around the 50-day SMA

6 November 2024

👉🏽 Stocks are jittery ahead of the election results. But the reality is that presidents have historically had relatively little impact on financial market returns.
👉🏽 There can be short-term market reaction to an election, but longer-term equity, asset class and sector returns are not generally reflective of a presidency. Returns are in some cases opposite to those implied by amplified electioneering.
👉🏽 Major levels in the Dow are the 50-day SMA at 41,968. Fibonacci retracement levels of the August to October to the upside are at 42,186 (23.6%) and the downside at 41,181 (38.2%) and 40,927 (50%).
👉🏽 A Red Sweep is seen as boosting stocks on pro-growth and deregulation across industries like banks, industrials, transport and energy. There cold a broadening out of equity leadership.

Chart of the Day – USD/JPY steadies in consolidation mode

4 November 2024

👉🏽 The correlation between the proxy for global borrowing costs and the currency major remains high. And as yields have shot higher, some 70bps in just six weeks, USD/JPY has jumped from a low of 139.57 in mid-September to the current price above 153.
👉🏽 US Fed rate cut expectations have been pared, while the Trump trade (tarrifs, tax cuts and deregulation) has boosted the greenback too. The political uncertainty in Japan hasn’t helped the yen, with the BoJ likely to be more patient with policy normalisation.
👉🏽 This week’s high is at 153.86, with a minor Fib retracement level of the July to September move above 157. The 61.8% level of that move sits at 153.40 with the midway point at 150.76.

Chart of the Day – Aussie sinking

30 October 2024

👉🏽 Even with progress in lowering inflation, particularly in trimmed and weighted mean measures, the Reserve Bank of Australia (RBA) is expected to stay cautious for now.
👉🏽 Despite the RBA's relatively hawkish stance, the Australian dollar (AUD) continues to struggle against the US dollar (USD). This is due to increased odds of a potential Trump 2.0 presidency, raising concerns over higher tariffs, especially targeting China, which negatively impacts the AUD.
👉🏽 After peaking above the June and July highs from last year around 0.6899, the AUD/USD has experienced a sharp decline driven by the "Trump trade."
👉🏽 Fed Rate Cut Expectations have been scaled back, further supporting the USD.
👉🏽 The AUD/USD recently fell below the 61.8% Fibonacci retracement level of the August to September move at 0.6574. The next support level is at the 0.6475 retracement, while the midpoint of that move is at 0.6644.

Chart of the Day – Dollar riding high

18 October 2024

👉🏽 The "Trump trade" and talk of a Republican sweep are boosting the USD, reducing expected December FOMC rate cuts from 50bps to 43bps.
👉🏽 The Dollar Index has gained for seven consecutive days, breaking through the 50% recovery level at 103.34, with the 200-day SMA at 103.77, a streak not seen since April 2022.
👉🏽 The next upside level is the 61.8% mark at 104.08. Prices are overbought on the daily RSI and outside the upper Keltner band, so warning of a correction.

Chart of the Day – EUR/USD looking to help from Lagarde

17 October 2024

👉🏽 If President Lagarde bats away suggestions of a prolonged series of rate cuts by the ECB, the euro might find some love. It desperately needs some as it has been in virtual freefall since struggling to break above serious resistance around 1.12.
👉🏽 Four back-to-back rate reductions were priced in by markets at the start of the week.
👉🏽 A ‘hawkish cut’ might slow the downtrend with prices needing to get above 1.0935 and t 1.0974 to spark a rebound. But a more dovishness bias would see 1.0832 and 1.08 challenged.

Chart of the Day – GBP/USD forming a base?

16 October 2024

👉🏽 Markets assign around an 80% chance of a 25bps cut at that meeting, so there is still a bit of room for dovish repricing.
👉🏽 Decent support sits around 1.30 in GBP/USD. However, a hot CPI release would provide ammunition to the more cautious hawks on the MPC and could set markets up for another split vote next month.
👉🏽 A major Fib retracement level (38.2%) of the April to September rally sits at 1.2995. The mid-September low is 1.3001, reinforcing this support zone.
👉🏽 If a base isn’t forming here, then we could see 1.2862 relatively quickly with the 100-day SMA at 1.2948 near-term support.

Chart of the Day – EUR/GBP nearing big support

15 October 2024

👉🏽 With the ECB meeting on Thursday, EUR/GBP will be in the crosshairs.
👉🏽 The long-term low from August 2022 at 0.8339 has acted as strong support already in recent weeks but prices are closing in on this once more after the cross spiked higher above 0.8430 at the start of the month.
👉🏽 If we do lose the October low at 0.8310, next downside levels are 0.8294 and then 0.8202.
👉🏽 A big rebound, possibly on a less dovish ECB and softer UK data, needs to move above 0.8433 and the 100-day SMA at 0.8444 to slow the downtrend.

Chart of the Day – USD/CAD due some consolidation

14 October 2024

👉🏽 Pricing for the BoC’s decision on October 23 was reined in after the strong US jobs report.
👉🏽 Market expectations shifted from over 80% chance of a 50bps cut to about 60% odds.
👉🏽 Seven straight days of gains are pushing prices closer to overbought territory.
👉🏽 A Fib level (61.8%) of the August/September downtrend sits at 1.3751.
👉🏽 Next support is at the midpoint of the August down move at 1.3691. A bull target above is 1.3846, the top from April.

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Highlights of this week:
· Trade Management (3/4): Idea Invalidation
· What Are Indices Heading in 2024?
· London Live Analysis Session
· Introduction to Pivot Points for Beginners

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