China Evergande’s issue weighs on Aussie

Australian dollar trades low against the American dollar during Monday Early morning Asian session.  The rationale behind the move can be linked to negative headlines at Australia and China.

Unfortunately Australia recorded a  high daily covid infection number, 37,152 at the latest per the latest News. Even so, Australia Prime Minister Scott Morrisson said, “We’re now at a stage of the pandemic where you can’t just make everything free, because when someone tells you they want to make something free someone’s always gonna pay for it and it’s going to be you.”

On the other hand, Reuters reported that  “Worldwide infections hit a record high over the past seven-day period, with an average of just over a million cases detected a day between Dec. 24 and 30.”

The recent Evergrande issue also weighs on the AUD/USD pair. China Evergrande Group’s (HK:3333) Hong Kong shares were suspended from trading earlier in the day, with the property developer declining to provide a reason for the suspension.

Evergrande, is struggling to repay more than $300 billion in liabilities, including nearly $20 billion of international market bonds that were deemed to be in cross-default by ratings firms last month after it missed payments.

On Friday, Evergrande dialled back plans to repay investors in its wealth management products, saying each investor in its wealth management product could expect to receive 8,000 yuan ($1,257) per month as principal payment for three months irrespective of when the investment matures.

Additionally, the firm is also instructed by China government to abolish 39 illegal residential buildings.

AUD/USD 4 Hour Chart:

Support: 0.7243 (S1), 0.7225 (S2), 0.7208 (S3).

Resistance: 0.7277 (R1), 0.7294 (R2), 0.7311 (R3).

Negative headlines from Australia and china weighs on the Aussie. We expect a bearish trend for AUD/USD.

BTC/USD Weekly Forecast (3rd January 2022 – 7th January 2022)

Fundamental view:

Bitcoin dropped sharply during the trading course of the week. Despite the large nominal $6.1 billion year-end options expiry, the bearish candle had a win. The yearend thin trading session could be the rationale behind the Bitcoin move. Elsewhere, some recent news also impacted the crypto king, Malaysian police have cracked down on a major electricity theft case involving bitcoin mining, local media reported. And  Cryptocurrency exchange Binance got into trouble with the Ontario Securities Commission (OSC) Thursday. Binance notified its users in June that Ontario was becoming a restricted jurisdiction and users may need to close their accounts. However, the crypto exchange sent a letter to its users Wednesday stating: As a result of ongoing and positive cooperation with Canadian regulators, there is no need for Ontario users to close their accounts by December 31, 2021.

On the other hand, some recent news was favorable for the Bitcoin. Almost 10,000 Bitcoin (BTC) left major United States-based exchange Coinbase (NASDAQ:COIN) on Dec. 30 in a sign that investor appetite is returning to the sphere. Shark Tank celebrity Kevin O’Leary, also known as “Mr. Wonderful,” has said he would be ready to increase his crypto allocations up to 20% as soon as there are clearer regulations around stablecoins.

The major economic events deciding the movement of the pair in the next week are OPEC Meeting, ISM Manufacturing PMI at Jan 04, ADP Nonfarm Employment Change, EIA Crude Oil Stocks Change, FOMC Minutes at Jan 05, Initial Jobless Claims, ISM Non-Manufacturing PMI at Jan 06 and Nonfarm Payrolls at Jan 07 for US.

BTC/USD Weekly outlook:

Technical View:

Last week’s high was 0.44% higher than the previous week. Maintaining high at 52083.4 and low at 45676.8 showed a movement of 6407 pips.

In the upcoming week we expect BTC/USD to show a bearish trend. The Instrument is trading below the 200 Simple Moving Average and the MACD trades to the downside. Should 43984.9 proves to be unreliable support then the pair may fall further to 41627.6 and 37578.3 respectively whereas a solid breakout above 50391.5 will open a clear path upward to 54440.8 and then will further raise up to 56798.1. In H4 chart M-Pattern breakout favors prospects of a bearish trend. Bearish harami pattern constructs a bearish outlook for the pair in the upcoming week.

Preference
Sell: 46345.5 target at 40470.8 and stop loss at 50396.4

 

Alternate Scenario
Buy: 50396.4 target at 56797.7 and stop loss at 46345.5

XAU/USD Weekly Forecast (3rd January 2022 – 7th January 2022)

Fundamental view:

The yellow metal stayed on the front foot jumping to its highest level in more than a month at $1,820 against the greenback this week. The improved market mood favored the yellow metal. The U.S. recorded its highest number of Covid cases this week, ever as the Omicron variant rages. However, the market is looking Covid as “serious but manageable” given the vaccines and other drugs to battle the virus.

According to George Milling-Stanley  who is precious metals analyst, gold should be on pace to resume its long-term bullish uptrend in the new year. George Milling-Stanley, chief gold strategist at State Street Global Advisors, said that his base case scenario, with a 50% probability, is for gold prices to trade between $1,800 and $2,000 an ounce in 2022. He added that he sees a 30% chance of gold prices pushing above $2,000 to a new record high.

He said “We see an 80% chance of gold prices staying in the current range to moving higher next year,” “Even with the Federal Reserve looking to tighten interest rates next year, we think gold has a pretty good chance of moving higher.”

On the other hand, According to commodity analysts at J.P. Morgan Global Research, The gold market will not be able to withstand the Federal Reserve’s plan to tighten its monetary policy in 2022.

In its recently published  2022 outlook report, the bank expects gold prices to fall to pre-pandemic levels by the end of next year. The outlook comes as the Federal Reserve plans to end its monthly bond purchases by March and looks to raise interest rates three times. Currently, markets are starting to price in the first rate hike in May. What 2022 has yellow metal to offer is yet to be seen.       

The major economic events deciding the movement of the pair in the next week are OPEC Meeting, ISM Manufacturing PMI at Jan 04, ADP Nonfarm Employment Change, EIA Crude Oil Stocks Change, FOMC Minutes at Jan 05, Initial Jobless Claims, ISM Non-Manufacturing PMI at Jan 06 and Nonfarm Payrolls at Jan 07 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 0.97% higher than the previous week. Maintaining high at 1830.3 and low at 1789.3 showed a movement of 410 pips.

In the upcoming week we expect XAU/USD to show a bullish trend. The Instrument is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1843.2 may open a clean path towards 1857.3 and may take a way up to 1884.2. Should 1802.2 prove to be unreliable support, the XAUUSD may sink downwards 1775.3 and 1761.2 respectively. In H4 chart symmetrical triangle breakout favors prospects of a bullish trend. Also to be noted Bullish engulfing formation exerts the expectation of uptrend for the pair.

Preference
Buy: 1829.2 target at 1867.6 and stop loss at 1800.5

 

Alternate Scenario
Sell: 1800.5 target at 1762.7 and stop loss at 1829.2

AUD/USD Weekly Forecast (3rd January 2022 – 7th January 2022)

Fundamental view:

The Australian dollar has rallied a bit during the course of the trading week but within a relatively tight range and traded around 0.7260 level at the end of the week. Last week, Announcement from Prime Minister Scott Morrison after a national emergency cabinet meeting favored the Australian dollar. He announced a federal definition for close contacts without establishing tighter measures. Moreover, In many part of Australian, close contacts and confirmed cases have to isolate for seven days and take a rapid antigen test on day six. Meanwhile, Western Australia will maintain its current rules, while those new rules announced on Thursday apply everywhere else. On the other hand, Aussie dollar is highly sensitive to the Chinese economy, which has a lot of concern around it at the moment.

In this week, CFTC AUD Non-Commercial Net Positions on 27th December and US Continuing Jobless Claims on 30th December created downtrend whereas S&P/CS Composite-20 HPI yearly report on 28th December and US pending Home sales on 29th December favored uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are OPEC Meeting, RBA Index of Commodity Prices monthly report, US ISM Manufacturing PMI at Jan 04, Australia Commonwealth Bank Services PMI, US ADP Nonfarm Employment Change, EIA Crude Oil Stocks Change, FOMC Minutes at Jan 05, Initial Jobless Claims at Jan 06 and US Nonfarm Payrolls at Jan 07.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.33% higher than the previous week. Maintaining high at 0.7276 and low at 0.7205 showed a movement of 71 pips.

In the upcoming week we expect AUD/USD to show a bullish trend. The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 0.7289 may open a clean path towards 0.7318 and may take a way up to 0.7360. Should 0.7218 prove to be unreliable support, the AUDUSD may sink downwards 0.7176 and 0.7147 respectively. In H4 chart bullish shark pattern favors prospects of a bullish trend. Also to be noted Bullish engulfing formation exerts the expectation of uptrend for the pair.

Preference
Buy: 0.7259 target at 0.7317 and stop loss at 0.7214

 

Alternate Scenario
Sell: 0.7214 target at 0.7148 and stop loss at 0.7259