Stocks trade lower together with commodity currencies and oil as traders focus on a host of risk factors present in the global economy. Risk sentiment is dampened by the possibility that Russia would seek to retaliate by cutting the Europeans off its natural gas supply. At the same time, investors worry about China’s Covid numbers and a liquidity crunch that saw a large number of accounts seized up by the authorities in the Henan province. By reading further, you agree with our disclaimer at the end of this report and acknowledge that we do not provide investment advice.
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USOIL – The 99.27 support was broken yesterday but not decisively. The market moved to levels slightly below it and then buying started again. This time though, the rally resulted in a lower swing high at 102.05. Lower high’s often lead to lower prices so we could see the market breaking below yesterday’s low (98.50) today. If this happens look for a move to the 94.03 – 96.83 range. If the bulls decided to defend the 98.50 level and the level wasn’t penetrated, the next stop for USOIL would be likely to be at the 102.75 103.08 range. Above this level, the next significant level can be found at 105.66.
CADCHF traded to my first target level at 0.7562. The pair is still in an uptrend so unless this fact changes there’s a good chance that we’ll see CADCHF moving to my T2 level at 0.7626. Alternative scenario: The market breaks below the rising trendline channel and moves back down to 0.7482.
KMB – Kimberly-Clark Co. stock has had strong mean-revertive tendencies over the last two years. In other words, the stock tends to range i.e. revert to the mean after rallies as longs start to take profits and short-sellers pounce on the opportunity. Now the stock has once again started to lose momentum after a rally. This could turn into a shorting opportunity if the market keeps on drifting lower and breaks key supports. In order for this stock to break lower, it needs to break the 132.21 support level. If the break was decisive the market could fill the gap at 127.92 – 128.78. However, if the 132.21 support holds, then we should look for a move to 138.15.
MCD – The CFD for McDonald’s Corp. shares struggles at a key resistance level (254.24). If this momentum loss continues, MCD could provide us with shorting opportunities. If 252.64 is violated decisively I’m looking for short trades with a T1 at 250.10 and T2 at 248.90. Alternative scenario: MCD doesn’t break the 252.64 level and rallies to 255.30.
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The Next Main Risk Events
- GBP BOE Gov Bailey Speaks
- NZD RBNZ Statement of Intent
- EUR EU Economic Forecasts
- GBP BOE Gov Bailey Speaks
- NZD Official Cash Rate
- NZD RBNZ Rate Statement
- GBP GDP m/m
- USD CPI m/m
- USD Core CPI m/m
- CAD BOC Monetary Policy Report
- CAD BOC Rate Statement
- CAD Overnight Rate
- CAD BOC Press Conference
For more information and details see the TIOmarkets economic calendar here.
Chief Market Analyst
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