Macro

Update for the Week of Jan 30 2023Jan 29, 2023

Hey traders,

It’s Sunday night, and markets are about to open soon, but probably without any serious gaps as markets were mostly slow and sideways last week. However, we have seen some interesting price action and recovery on Aussie after an unexpected jump in CPI figures, pair that was also supported by higher metals and a rise in stocks. Moves were limited as China was closed because of holidays, but volatility is ready to return this week with a busy calendar and CB policy decisions in focus.

STOCKS

Stocks were higher this week with SP500 futures trading close to 4100 area; still, a strong potential technical resistance where we are aware of a new turndown, especially if USD will recover. One of the reasons for higher stocks last week came after BoC announced a pause with interesting rate hikes, and usually, this BoC was one of the first banks with policy changes. So it’s not a surprise to see higher stocks since we know that FED is in the same field. However, FOMC on Wednesday should give us more clarity about rates going forward, but think even more important will be the next US CPI report, especially if we consider that inflation did not peak in some of the countries yet. The rise in AUD CPI figures clearly suggests the opposite.

From an Elliott Wave perspective, I am bullish on equities for 2023 with some good setups on single stocks. I think its buy a dip play on some of big names. We will try o share some of them on Twitter.

FX

ECB, FED and BoE will be the main driver of the FX next week. We know that ECB have been with hawkish with their comments lately, so it’s not a surprise to see EURUSD trading close to the highs, but a lot of CB actions is already priced in, so we are aware of a potential surprise on the EUR. In fact, what if ECB disappoints and will somehow try to be more careful with rates on next upcoming meetings? Then I believe that EURUSD will come aggressively back to the downside, especially if we consider the plans by BoC and possibly FED as well.

“It’s not about what they do now, it’s about what will be their message for decisions on next meetings”.

 From an Elliott Wave perspective, I really like an ending diagonal on EURUSD (click here) which can also call some weakness on cross pairs. EURGBP per example is much lower and could see an acceleration to the downside if EURUSD starts breaking the support at 1.08. I also like CADJPY on the short side. Read more here

METALS

Gold is bullish, but silver is not, so it’s not a real uptrend. One of the reasons for slow price action on silver can be a rally on USDCNH, which is seen in a minor consolidation now because of the China holidays. But when normal volatility is coming back now, I think USDCNH can break lower and drive the Silver to a new high. Silver is “buy a dip” at 22.00-22.50. I also share some chart here

CRYPTO

Recovery in cryptos is impressive and as I said in our webinar last Monday, the dollar top for 2023 is very bullish for cryptos, but after pullbacks. I see bitcoin now at 24k-25k resistance (Aug 2022 high), with next potential bounce after next wave four. 21k-22k is a support. I talked a lot about cryptos in our webinar here.

Trade well,
Grega

p.s. Make sure to follow us on twitter, where we will announce next Ellliott Wave Webinar

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Important data next week:

Tuesday

CAD GDP 13:30GMT

USD Consumer Confidence 15:00GMT

NZD Jobs data 21:45GMT

Wednesday

USD FOMC rates decision 19.00GMT

Thursday

GBP BoE rates decision 13:00GMT

EUR ECB rates decision 13:15GMT

USD Jobs data 13:30GMT

AUSSIE: Intermarket Analysis and Elliott Waves Are Pointing Higher CLICK HERE

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