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Andreas Zanin
Analysis, Education | October 8, 2021

The Week Ahead 📈 11th – 15th October

Hello and welcome to the Key To Markets preview of the Week Ahead.

If you have any questions about this information, please contact your KTM Account Manager who will be happy to assist.

Contents

  • Currency Pair Performance
  • 10 Big Stories Last Week
  • Chart of the Week
  • Economic Calendar Highlights
  • 5 Things to Watch this Week
  • Technical Analysis: EUR/USD | GBP/USD | USD/JPY | AUD/USD | Gold | Oil | S&P 500

Currency Pair Performance

5-day performance as of October 7th, 2021. 20:00 GMT

Source: finviz.com


10 Big Stories Last Week

In case you missed it….

WTI hits $80: US crude oil hit a massive 7-year high of $80 per barrel.

OPEC status quo: The OPEC+ oil cartel stuck to existing plans to raise production, raising fears of supply shortages.

CAD rallies: In forex markets the oil-sensitive Canadian dollar was top performer.

USD mixed: The dollar rally has fizzled for now with GBP well off its lows but EUR still dropping.

Debt ceiling raised: The USD gained across the FX board in the last week, with the biggest gains versus the NZD and GBP.

Russian Gas: Natural gas prices slumped on the news Russia will increase supplies to Europe if the Nord Stream 2 pipeline is approved.

Tech wobble: Teck stocks tumbled mid-week on valuation fears before earnings.

Facebook down: FB shares dropped after Facebook services including WhatsApp and Instagram went dark for 6 hours.

Tesla delivers: Elon Musk’s Tesla delivered 241,300 cars in Q3, more than the 220,000 forecast.

Infrastructure: Democrats could try to pass a smaller $2.1 spending package by a process called ‘reconciliation’.


Chart of the Week

Source: Charlie Bilello

Which country ETFs have been the best to invest in over the past decade? Naturally the USA is number one, but it’s been a good decade for Holland at number two with Taiwan and Switzerland taking the third and fourth spots. At the other end of the scale has been Brazil, where investors have lost almost half their money over the period, while South African equities are also negative over 10 years.


Economic Calendar Highlights

Source: FXStreet


5 Things to Watch This Week

1)     DAX 40

The new name and pricing kicks in for the CFD of Germany’s DAX index this week. As previously discussed, the index is expanding from 30 to 40 stocks while some other technical changes have been made on how stocks qualify to be DAX-listed.

2)      Q3 Earnings

It’s the start of third quarter earnings season and the big question on everyone’s lips is how long the blistering rise in profits can continue. We know the stock market has ripped higher over the last year, but it’s been well justified by a matching rise in earnings growth.

3)     Bank stocks

The big US banks unofficially kick-off earnings season with their Q3 numbers out this week. JP Morgan Chase reports its numbers on Wednesday (13th). Bank of America, Wells Fargo and Citigroup all report on Thursday (14th) and Goldman Sachs numbers are out on Friday.

4)     FOMC Minutes

Markets have interpreted the September Fed meeting as having confirmed that tapering will happen this year, and it probably will. BUT the Fed didn’t actually commit to a specific date for tapering. The minutes this week could shed some light on timing, as well as if there are any linger doubts.

5)     Oil’s 7-year high

We previously raised the possibility of a double top pattern in oil. Well that has not been the case and oil continues to trend higher. WTI crude oil did stumble after touching $80 per barrel and its highest since 2014, but jumped right back again. A continuation past 80 is a major long-term breakout.


Technical Analysis

Here you can find analysis of the major asset classes including the major forex pairs, gold, oil, and the S&P 500.

EUR/USD (H4 Candlestick Chart)

EUR/USD dropped back again from a downtrend line drawn through recent peaks before finding support under 1.155. A break of the trendline could see 1.17 resistance tested.

GBP/USD (H4 Candlestick Chart)

GBP/USD has rallied back over 1.36 but gains have been capped at 1.365. A break above a downtrend line could see gains extend to 1.37.

USD/JPY (H4 Candlestick Chart)

USD/JPY found support at 111.0 so is for the time being inside a 100-pip range under 112. The trend remains up.

AUD/USD (H4 Candlestick Chart)

AUD/USD looks to have made a false break below 0.722 and has now rallied back to resistance above 0.73, suggesting a possible bottom.

USD/CAD (H4 Candlestick Chart)

USD/CAD dropped under 1.26 support, putting a test of 1.25 and a possible break lower on the cards.

Gold (H4 Candlestick Chart)

XAU/USD has stabilised above 1750 and below the 20-day moving average. The broader trend remains lower but another corrective move higher above 1780 looks possible.

Brent Oil (H4 Candlestick Chart)

BRENT neatly found support at the previous high around $79 and has rebounded back towards the 3-year peak at 83.0. A drop back under 80 would signal a deeper correction.

US 500 (D1 Candlestick Chart)

US500 has roughly held support near 4300 and the 5% correction level. 4470 is resistance.


Thank you very much for reading – and have a great week trading!

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