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DAILY ANALYSIS

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Forecasting Strategy for Short Term Trade

EUR/USD

The greenback slid notably Wednesday as traders locked in some profits from the recent rally, sending the EUR/USD pair above the 1.13 level again. Earlier today, the revision of the US Q3 GDP was released, and it printed 2.3%, higher than the previous estimate of 2.1% and the consensus forecast of 2.1%. GDP rose at a 6.7% annualized rate in Q2, so a slowdown but not as bad as previously expected. 

Technically speaking, the EURUSD pair is now trying to settle above the descending trendline from July's lows. That should be a bullish signal, potentially sending the pair to December highs near 1.1350. However, the critical resistance stands at 1.1520, and if the euro jumps above it, the medium-term uptrend could change to bullish. On the downside, the key support still stands at 1.12. Failure to hold it will likely send the euro to the 1.10 threshold.

USD/JPY

The USD/JPY barely advance during the New York session, trading at 114.19 at the time of writing. US equities remain tilted to the upside, reflecting market participants’ mood to the detriment of safe-haven assets. In the FX market, risk-sensitive currencies rise while safe-haven statuses like the USD and the CHF advance against the low-yielder Japanese yen.

In the overnight session, the USD/JPY pair slide slightly towards the daily low aright at the central daily pivot at 113.95. As market sentiment improved, the US dollar strengthened versus the yen, surging towards the R1 daily pivot at 114.34 before settling down at current levels.

GBP/USD

GBP/USD has closed in positive territory on Tuesday following a two-day slide but seems to have lost its recovery momentum before testing 1.3300. 

The GBP/USD currency exchange rate has continued to move higher. At mid-day on Wednesday, the rate left below it the hourly simple moving averages, the weekly simple pivot point and the high level resistance zone near 1.3280. By 12:00 GMT, the GBP had reached the 1.3320 mark against the USD. A continuation of the surge of the Pound against the US Dollar could result in the rate reaching the weekly R1 simple pivot point at 1.3357 and the December high level at 1.3375.

AUD/USD

AUD is the strongest currency on the day in a risk-on environment with US Consumer Confidence coming in higher than forecasted for December as third-quarter economic growth was revised higher. The US stock market has rallied and high beta plays are aligned positively, benefitting from the renewed enthusiasm.

AUD/USD is firm, 0.9% higher around the highs of the day near 0.7217 at the time of writing. The 10-year US Treasury yield is down 0.34% points to 1.46% and the US dollar, as measured by the DXY is down 0.39% sliding from 96.602 to a low of 96.036. US rates are starting to normalize. However, analysts at Brown Brothers Harriman explained that the ''market tightening expectations for the Fed still have room to adjust; 2-year yield differentials are moving back in the dollars favour.''

XAU/USD

Gold has perked up on the day following an offer in the greenback and a bid in global equities. US real yields are the focus pertaining to Federal Reserve expectations. The yellow metal has benefitted due to the market being well priced for a hawkish Fed in what has recently turned into risk-on market conditions. However. analysts at TD securities warned that ''the yellow metal could begin to lose steam so long as Fed expectations remain as status quo.

Gold edged higher during the New York session, trading at $1.791.63 at the time of writing. The market sentiment is upbeat, though US equity indices fluctuate between gainers and losers. Additionally, the US dollar weakened across the board, while US T-bond yields, with the 10-year benchmark note, retreats after testing the 1.50% threshold in the overnight session.

WTI

Sentiment has taken a turn for the better during US trading hours, with a string of positive Covid-19 developments/stories seemingly injecting a dose of optimism into a market that had otherwise been subdued and in holiday mode. This is giving crude oil a lift and front-month WTI futures recently crossed back to the north of the $72.00 level, where it trades at weekly highs. On the day, WTI is now close to $1.0 higher and the bulls will be eyeing a test of the $73.00 level, a key zone of resistance that has capped the price action for the whole of December thus far.

#CSCO

Cisco Systems Inc. traded at $61.03 at close of the session on Tuesday, 12/21/21, made an upward move of 1.11% on its previous day’s price. Looking at the stock we see that its previous close was $60.36 and the beta (5Y monthly) reads 0.91 with the day’s price range being $60.00 – $61.2377. The company has a trailing 12-month PE ratio of 22.69. In terms of its 52-week price range, CSCO has a high of $60.79 and a low of $43.35. The company’s stock has gained about 14.61% over that past 30 days.

Cisco Systems Inc. has a market cap of $256.76 billion and is expected to release its quarterly earnings report on Feb 07, 2022 – Feb 11, 2022. With its Forward Dividend at 1.48 and a yield of 2.43%, the company’s investors could be anxious for the CSCO stock to gain ahead of the earnings release.

#AAPL

Apple Inc. traded at $169.79 at last check on Tuesday, December 21, made an upward move of 0.02% on its previous day’s price.

Looking at the stock we see that its previous close was $169.75 and the beta (5Y monthly) reads 1.20 with the day’s price range being $167.46 – $170.58. The company has a trailing 12-month PE ratio of 30.27. In terms of its 52-week price range, AAPL has a high of $182.13 and a low of $116.21. The company’s stock has gained about 7.53% over that past 30 days.

Apple Inc. has a market cap of $2803.21 billion and is expected to release its quarterly earnings report on Jan 25, 2022 – Jan 31, 2022. With its Forward Dividend at 0.88 and a yield of 0.52%, the company’s investors could be anxious for the AAPL stock to gain ahead of the earnings release.

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