Still below the 50% midpoint
The EURUSD is trading in a narrow 20 pip trading range as the week worked its way toward a close. This week saw the pair move higher on Monday and Tuesday into resistance between 1.1601 and 1.1611. On Wednesday the price moved sharply lower in response to the dollar buying after the CPI data, and in the process, cracked below the 50% midpoint of the move up from the March 2020 trading low at 1.14892. During yesterday’s trade the high price stayed below that midpoint level keeping the bears in control. The price closed near it’s lows at 1.1442.
In trading today, a new 2021 year low was reached for the third day in a row at 1.14354, but the price has since moved higher and trades at 1.1449, up on the day and near it’s high at 1.14554.
Looking at the daily chart, the next target hours looking toward was at 1.1424. The low today at 1.14354 is still short of that target. On the topside the 50% midpoint remains a short term risk/bias defining level for buyers and sellers (at 1.14892). Stay below the level is more bearish. The 61.8% retracement 1.12876 cannot be ruled out as a downside target on further dollar buying.
Move above the 50% level and there could be additional upside probing with the 1.1512 to 1.15236 area as the next target (swing lows from October and earlier in November) above that and traders would start to look toward the 1.1601 to 1.1611 as targets on the daily chart.
Drilling down to the 5 minute chart below, there was a number of swing lows between 1.1453 and 1.14553 during yesterday’s trading (floor). Today, that area has slowed the rally’s (ceiling).
The 100 and 200 bar moving averages has seen price action above and below today as the market consolidates the sharp declines from Wednesday’s and Thursday’s trade.
The holding of that resistance level increases the areas importance going forward. Move above should see further upside probing. Stay below and the sellers remain in firm control.
On a move above the 50% midpoint remains the key target on the topside.
Coffee futures hit a seven-year high
Coffee futures just hit a seven-year high. To be honest, coffee futures are a bit of a joke. There’s virtually no connection at all between the price you pay at Starbucks and the price of the underlying commodity — the markup is phenomenal.
That said, this is another excuse to raise prices, even if we’re still at prices below what they were 13 years ago.
What I do find interesting about this chart is that it tracks the global inflationary impulse remarkably well. There was the same kind of inflation scare just before and after the financial crisis.
Toyota plans to produce about 800,000 vehicles globally in December
- up from about 760,000 a year earlier
The firm plans to produce 9m vehicles worldwide this fiscal year (ending March 31 2022).
Says that in December it’ll begin making up for production lost due to supply shortages. Plants in Japan are set to return to normal for the first time in seven months.
Info via Reuters reporting.
Toyota factory in Aichi:
China’s state media with this, comes via Global Times:
1. Development is the absolute principle
2. Deepen reform
3. Stick to opening-up
4. Innovation is the primary driving force behind development
5. Unswervingly consolidate & develop the public economy; Unwaveringly encourage, support & guide the development of the non-public sector
6. Promote the better integration of an efficient market and a capable government
7. Adhere to the general principle of pursuing progress while ensuring stability
8. Uphold Party’s leadership
Speaking of that final point.
President Xi prevailed at the plenum, setting up an indefinite extension of his rule.
- The plenum was held this week, it concluded yesterday after 4 days of top level talks.
China’s ruling Communist Party approved a resolution elevating President Xi Jinping’s status in its history. This consolidates Xi as leader and sets up a likely third leadership term next year (to be rubber-stamped at next year’s 20th Party Congress).
Similar resolutions have passed only twice before, in 1945 and 1981, which cemented leadership positions for Mao Zedong and Deng Xiaoping respectively.
Dow industrial average down for the third consecutive day
The US major indices are ending with mixed results. The Dow industrial average was the worst performer thanks to a sharp decline in Disney shares. The S&P is closing modestly higher while the NASDAQ index had decent gains, but is closing well off the highs:
- S&P and NASDAQ snapped a two day decline
- Dow industrial average has fallen for three consecutive days
- Major indices on pace for a down week for the first time after five consecutive weekly rises
- The Russell 2000 led the way with a 0.82% gain
the final numbers are showing:
- Dow industrial average -158.7 points or -0.44% at 35921.24
- S&P index rose 2.56 points or 0.06% at 4649.27
- NASDAQ index rose 81.58 points or 0.52% at 15704.28
- Russell 2000-19.56 points or 0.82% at 2409.14
Looking at the different sectors of the S&P index, the winners included:
- materials +0.85%
- technology +0.53%
- energy +0.31%
- financials +0.31%
The losers today included:
- utilities -0.75%
- communication services -0.47%
- industrials -0.42%
- discretionary -0.25%