Gold Price Analysis: Bullish Momentum Continues to Build
By Nick Cawley
The precious metal is building a base above $1,200/oz. for the most of last week and is looking to push further ahead on the back of a weaker US dollar. The recent move has taken gold back above its 20- and 50-day moving average – a bullish signal – while the last five daily candles have all made higher lows. The RSI indicator is also pointing higher and has plenty of room to move before it enters overbought territory.
Gold is currently benefitting from a weak US dollar, which has dropped to a two-month low on fears that the US economy may be starting to slow down. Data and events this week will give traders a much better idea about the state of the US economy and may well revive the dollar, to the detriment of gold.
Fed, RBNZ Risk Derailing Remarkable New Zealand Dollar Recovery
By Daniel Dubrovsky
NEW ZEALAND DOLLAR FUNDAMENTAL FORECAST: BEARISH
The week ahead boasts a couple of notable event risk starting with the Reserve Bank of New Zealand interest rate announcement. Lately, the markets have been slowly pricing in an RBNZ rate cut with those odds at one point hovering around 30% for February 2019.
Meanwhile the Fed has its own monetary policy announcement in the hours before the RBNZ. The markets are widely anticipating a rate hike and that may very well be. But they are also strongly pricing in another one for December. Those odds stand around 75%. Given that real wage growth was seen in the US, Fed Chair Jerome Powell may prepare the markets for the next move. This would help lift the US Dollar once more.
With that in mind, while the New Zealand Dollar has edged out a remarkable rally, there is the risk that it could come to a halt or reverse course. A dovish RBNZ may also help to somewhat derail the NZD’s ‘pro-risk’ ties to stock markets. So far, equities have largely brushed off news that the US will proceed with $200b in Chinese import tariffs which will begin today.
The outlook will be bearish.
USD/JPY Forecast: Rising in an uptrend channel, all eyes on the Fed
By Yohay Elam
The USD/JPY extended its gains on higher yields and as markets ignored the tariffs.
The Federal Reserve will raise rates on September 26th. The probability is 100%. They have communicated it in a clear manner, as they did in the past. The economy is growing at a rapid clip, wage growth has recently accelerated and inflation is on target despite the recent slide.
A rate hike in December is also high on the cards. The Fed’s recent dot-plot forecast a fourth hike in 2018 and there is little reason to doubt the move. Markets will want to see a confirmation of the Fed’s intentions.
The USD/JPY is trading in a steep upwards channel, a bullish sign. The Relative Strength Index is above 50 but below 70, thus not indicating overbought conditions. Momentum remains positive and the pair is trading above the 50-day and the 200-day Simple Moving Averages. All in all, the bias is bullish.
JP Morgan lowers GE price target all the way to $10: ‘Assuming weaker results’ for power business
By Michael Sheetz
J.P. Morgan lowered its price target on General Electric stock to $10 per share from $11 per share on Thursday, calling a recent gas turbine failure in Texas “a negative development for a company that has little wiggle room” in its struggling power business.
J.P. Morgan analyst Stephen Tusa assumes “weaker results at power and some franchise value impact” for GE.
CFRA also lowered its price target on GE stock Thursday to $14 per share from $15 per share but did not see the gas turbine problem as overly concerning.
“Overall, we see this as minor bad news for a company struggling to gain traction in its turnaround efforts,” CFRA analyst Jim Corridore said in a note.
Why Boeing Stock May See A 10% Pullback
By Michael J. Kramer
Boeing Co. (BA) stock is flying high in 2018, with shares rising by almost 25%. But technical analysis suggests the shares will pull back by as much as 10% in the coming weeks. The bearish view reflects analysts’ falling estimates for the third quarter.
The negative sentiment comes in stark contrast to many analysts’ bullish outlook on the stock, which has been stuck in a trading range since April after rising sharply earlier in the year. The key worry has been trade tensions between the U.S. and China.
Analysts still remain optimistic about the stock longterm and see shares rising to an average price target uof $410, 11% higher than today. But analysts’ target – and forecast for stock growth – may come down if estimates continue to drop.
UBS upgrades AT&T to buy: ‘The stock is trading near all-time low valuations’
By Michael Sheetz
UBS raised its rating of AT&T to buy from neutral on Thursday, citing a coming turnaround in the company’s operating performance and “an overly negative outlook” on AT&T shares, the firm said.
“We believe the stock is trading near all-time low valuations ,” UBS analyst John Hodulik said.
UBS also bumped up its price target on the stock, to $38 a share from $33 a share.
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