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Spot Gold (XAU/USD), Natural Gas (LNG) & Nasdaq (NDX) – FinTwit Trends to Watch


FINTWIT ANALYSIS

  • XAU/USD could also be in for finish of yr rally.
  • Pure Fuel upside could proceed as 2021 attracts to an in depth.
  • Potential for NDX pullback as QE taper looms.

GOLD CLIMBS DESPITE STRONGER DOLLAR

Spot gold has been testing the crucial $1800 space of confluence since September and should succeed after an sudden dovish announcement by the Fed supported increased gold costs. As we speak’s higher than anticipated Non-Farm Payroll (NFP) print (see calendar beneath) initially weighed down spot gold costs however has since pushed again to pre-announcement ranges. Sticky inflation as eluded to by Fed Chair Jerome Powell has doubtless bolstered gold help as an inflation hedge – persistent inflation. Subsequent week, U.S. inflation knowledge is scheduled which may give markets some steering on the December Fed coverage assertion. A better then estimated determine may result in decrease gold costs as doubtlessly hikes could also be introduced ahead.

non farm payroll data NFPus core inflation rate

Supply: DailyFX financial calendar

XAU/USD DAILY CHART

xau/usd daily chart

Chart ready by Warren Venketas, IG

Gold has been displaying indicators of a bullish continuation as mirrored by the bull flag chart sample (blue). As we speak’s break above flag resistance might be watched with eager eyes as a affirmation candle shut above the important thing $1800.00 psychological degree could sign a push increased in direction of the $1836.94 (38.2% Fibonacci) degree.

Key resistance ranges:

Key help ranges:

NATURAL GAS REMAINS FUNDAMENTALLY BULLISH

2021 has been a standout for pure fuel displaying essentially the most important positive aspects (see graph beneath) from some other commodity. Primarily boosted by the European fuel costs as will as different inflationary elements like rising delivery prices. The outlook for the rest of 2021 is prone to see excessive LNG costs as climate circumstances and international demand favor sustained elevated costs.

commodities 2021 relative performance

Supply: Reuters

Climate within the U.S. is predicted to get cooler over the November and December interval (see graphic beneath) which ought to improve the demand for U.S. LNG over the approaching weeks.

HDD forecast

Supply: Refinitiv

Demand has been hovering since mid-2021 and we will see European exports (blue) nonetheless holding agency regardless of abating exports. Climate forecasts in Europe ought to hold this determine from dwindling within the short-term together with lofty European fuel costs.

u.s. lng exports by region

Supply: Refinitiv

After yesterdays stock knowledge launched by the U.S. Vitality Info Administration (see beneath) which revealed increased U.S. LNG shares throughout the board, costs have slipped however with the above elementary drivers in play, this can be a brief pullback.

EIA weekly storage report

Supply: EIA

NATURAL GAS (HENRY HUB) DAILY CHART

lng daily chart henry hub

Chart ready by Warren Venketas, IG

The each day LNG chart above exhibits a consolidatory transfer as costs converge inside the medium-term symmetrical triangle sample (black). Costs are coiling and prepping markets for a breakout above or beneath the triangle trendlines. Fundamentals level to extra bullish upside which can unfold ought to costs breakout of triangle resistance. The 6.000 degree will doubtless coincide with a bullish breakout which is able to open up room for a resistance goal at 6.500. The identical would apply for a push decrease whereby subsequent help targets will come into consideration.

Key resistance ranges:

Key help ranges:

POSSIBLE CORRECTION ON HEAVILY OVERBOUGHT NASDAQ COMPOSITE INDEX

After the Fed introduced that tapering would start later this month at a tempo of $15bn per thirty days which may be adjusted if wanted, the Nasdaq index continued to rally pushing to all-time-highs. Markets are at the moment dismissive of the soon-to-be ‘much less’ accommodative atmosphere for U.S. shares as earnings season continues to take the limelight. Publish-earnings, and whereas markets have come down from their current euphoric state the NDX could doubtless pullback to decrease ranges. The falling U.S. 10-year Treasury yield is giving the index additional upside impetus as tech valuations usually enhance on the again off decrease yields. As soon as the Fed turns into extra hawkish and doubtlessly appears to disclose their price hike path in 2022 (knowledge dependent) I imagine the modification decrease is extraordinarily prone to reveal itself.

Enhance your inventory market data with our articles on the kinds of shares out there, how equities impression the economic system, and getting began with inventory buying and selling.

NASDAQ100 INDEX (NDX) DAILY CHART

NDX daily chart

Chart ready by Warren Venketas, IG

Value motion on the NASDAQ 100 displays the current rally throughout the U.S. earnings season leading to a particularly overbought sign made identified on the Relative Power Index (RSI). From the bearish perspective, reversion in direction of the imply is probably going within the short-term which may doubtlessly deliver the 16000 horizontal degree into play.

Key resistance ranges:

Key help ranges:

  • 16000
  • 15708 – September swing excessive concurring with 20-day EMA (purple)

— Written by Warren Venketas for DailyFX.com

Contact and comply with Warren on Twitter: @WVenketas



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