Below is the interview with Pietro Paciello, CEO and Chief Analyst of Pro Markets Sagl, Asset Management Company, to whom we asked some questions about the situation in Piazza Affari and the strategies to follow for various stocks.
Pietro Paciello awaits you on Mondays and Fridays at 4 pm with the OPENING BELL – NewTraderLab Market Talk. For info click here.
The euro-dollar took a hard hit after the Fed meeting, while the dollar-yen rose above 110. What can you tell us about these two crosses?
The feeling is that the euro-dollar has not yet concluded the downward phase which, moreover, finds a nice parallel with the violent rise of the dollar-yen.
I believe the euro-dollar still has room to fall towards 1.182 / 1.18 where I believe buyers should appear again.
It seems to me that the rebound attempts of the last few hours are quite limited, precisely because in this price zone there is no great supportive reference.
I now see three levels of support for the euro-dollar: the first at 1.182 / 1.18, the second, less strong, in the 1.177 area, and a further third in the 1.16 area, which also acts as a psychological level.
If the euro-dollar fails to defend the 1.18 threshold, I would not be surprised to see further weakening towards the 1.16 zone.
The dollar-yen has shown a more accurate chart in recent months and is currently traveling above a beautiful dynamic support tested recently before the last uptrend phase.
The dollar-yen has support in the 109.7 area and as long as it remains above that threshold, I do not see the current strength of the greenback reversing.
A closing of the cross below the 109.7 area would give me a signal of exhaustion of dollar strength and therefore a potential reversal which at the same time should lead to a rebound of the euro-dollar.
If we look at the dollar index we see that it broke up the 90.2 / 90.3 area in unsuspecting times and seems to have room up to 92.8 / 92.90.
The strengthening of the dollar is therefore not over and I would postpone the judgment to the test of the area just indicated, where the greenback should stop, letting the euro and the yen breathe in the opposite direction.
Gold has also been hit by a shower of sells after the Fed: are you seeing new drops in the short term?
As a logical consequence of the strengthening of the dollar, gold falls and finds no support levels.
The feeling is that the move is not complete and now I see initial support in the $ 1,730 area, but before then I see no reason to accumulate it to the upside.
Below $ 1,730 we find static support in the $ 1,675 zone, so even for gold the sales are not finished at the moment.
Oil, despite having retraced from the top, still shows strength: will we have new rises?
If it is true that metals and commodities suffer from the strength of the dollar, in this case the excessive bullish power of oil seems clear to me.
Black gold continues to rise, it has no particular obstacles and I would speak of a bearish view only in the case of prices below the 67.5 dollar area, otherwise oil will be traded on the upside.
Wall Street has been affected more than Europe by the indications coming from the Fed. Is this a temporary setback or is the decline destined to continue?
In recent interviews we have often said that the only American index that maintained a vocation to rise was the Dow Jones.
The worrying thing of the last few hours is that this index also broke down its dynamic support for the first time in the post-Covid period.
As far as I am concerned, this is a short signal on the equity markets which also comes with a strong dollar and this is being reflected in a potential problem for the lists.
The Dow Jones, which until now had remained immune to all the corrective dynamics that had developed on other lists, breaks the historical support.
As for me, we have now entered bearish markets quite evidently, so be careful to keep long, because I believe that, also thanks to the seasonality and above all the strength of the dollar, the stock run is over for the moment.
Trend-online Deputy Director, born in 1978.
After completing his studies at the Classical High School “Antonio Calamo” of Ostuni I entered the world of economics.
For about twenty years I have been dealing with Stock Exchange and Finance. After having worked as a financial promoter for several years, in 2005 I joined the Trend-online team as an editor, to later become deputy director of the cylinder head. Among other countless activities, I take care of maintaining relationships with all the experts, analysts and traders, consulted daily by Trend-online.
My motto is? “Life is like a mirror, if you look at it smiling it will smile at you”.