Weekly Market 101

Technical Analysis-24-28-feb-2020

With a new week comes new market opportunities. Here’s a recap of what you may have missed, as well as some highlights of the week ahead of us:

Catching you up on last week:

  • Yen reacts dramatically from Wednesday onwards to weak data coming out of Japan, further ramped up by COVID-19 domination of headlines driving investors to move money abroad
  • China’s Monetary Supply falls, and the country lowers the Interest Rate; Indonesia followed suit all the while lowering growth expectations
  • Other markets soar to new heights (or lows): DXA hits 3-year high; AUD is the lowest it’s been for a decade, while XAU sees highest in 7 years
  • Morgan Stanley closes $13 billion deal to buy American online brokerage, E*TRADE
    This week, keep an eye on:
  1. JPY, USD, XAU and AUD: last week’s breakouts have set important technical levels
  2. The 10-year Treasury yield is close to lows, with part of the curve inverted; we’re closely watching the 1.5% mark and whether it’s surpassed, to follow any subsequent move/s
  3. GDP data from Germany, the United States, and Canada: the European export-based economy still leads the pack, but the overall international landscape is looking gloomy
  4. Price data across Europe could be interesting after the ECB Meeting Minutes showing us that they could be considerating negative rates

Let’s take a closer look…

Each week, we take a closer look at the markets that move, and those you may have missed!
Over a quarter, the Japanese economy has decreased by 1.6% — their industrial production, machinery orders, and imports have all plunged. Japan is the third-highest COVID-19-infected country in the world. Here, we have a weekly chart of the yen against the dollar: the breakout is clear; more than 200 pips in under two days. If something doesn’t change soon, it won’t be about changing tactics, but adapting your strategy.
This week, U.S. retail giant Walmart posted disappointing earnings, but the first reaction from the bull market has been to keep buying on good long-term guidance. Technically, it looks as though the price retested the broken green trendline close to 120 before. The 113.80-114.50 areas should be monitored to the downside, as once lost, Walmart will go down to fill that yellow gap from 07-19 in the 109 area.
At a time when we’re probably headed to a slowdown, where the high-yielding USD is bought as a safe haven, it may be time to look closer at gold. The precious metal met its Black Wednesday highs at $1,611and set a new 6.5-year record at $1,632. It would have been better to catch this train earlier but keep an eye on it and don’t fight the trend.
Nasdaq100 is up almost 11% this year, and 30% since October 2019. Be careful trading against it, but volumes have been decreasing since before Thursday’s sell-off. RSI showing first signs of divergence, and MACD crossing to the downside. What goes up, must come down… however, try not to be the first and stick to your plan. 9,500 to the downside, then room for the 9,300 area.