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USDJPY to Nearly 4-Month Lows on Shifting Policy DynamicsThe Bank of Japan followed a cautious and slow path away from the ultra-loose monetary setting after abandoning the negative rates regime and the yields curve control, in the historic decision of March. But price pressures persisted, wages increased substantially after the spring negotiation and the Yen was further devalued, forcing officials to step up their tightening efforts. They hiked rates for the second time in this cycle, to around 0.25%, while pointing to more moves ahead if the economy evolves as anticipated. Furthermore, they announced a plan to slash their bond purchases, so that they will halve by Q1 2026. After hitting 38-year highs at the start of the month, USD/JPY reversed course due to Japan’s FX interventions rising expectations for BoJ hikes and increased optimism around Fed cuts. The forceful action by the Bank of Japan along with the Fed opening the door to a September pivot this week, exacerbated the decline to the lowest levels since mid-March. The pair is now exposed to 146.47 and the shift in monetary policy dynamics can fuel further weakness. On the other hand, BoJ warned it could increase bond purchases again if needed, while market pricing for three cuts by the Fed may be stretched. Furthermore, the rate differential remains wide and the favorable carry trade could persist. The Relative Strength Index is oversold and this can drive a rebound above the 200Days EMA (blue line), but 200H4 EMA (black line) looks much harder. Focus now shifts to Friday’s US NFPs which are becoming increasing important for the policy path, as disinflation is back on track. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 59% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
by FXCM
USD/JPY – Yen goes on a tear after BoJ rate hikeThe Japanese yen continues to sparkle. USD/JPY is trading at 150.27 in the European session, down 1.62% on the day at the time of writing. Earlier, the yen strengthened to 150.04, its highest level against the dollar since March 19. The Bank of Japan showed an aggressive side rarely seen at today’s meeting. The BoJ raised the benchmark rate to around 0.25%, up from the previous range of between 0% and 0.25%, its highest level since 2008. The move was considered aggressive, as the markets were uncertain whether the central bank would raise rates or continue to hold. The BoJ tempered the hike by noting in the rate statement that it expects real interest rates to remain “significantly negative” and that it will continue an accommodative policy to boost the economy. Still, this marks the second rate hike since March and demonstrates that the BoJ is serious about tightening policy and keeping inflation in check. Overshadowed by the dramatic rate hike, the BoJ announced it will taper its Japanese government bond purchases in half by the first quarter of 2026. The move will barely make a dent in the Bank’s bond holdings, but nonetheless indicates a shift in policy and the intent to unwind its massive monetary stimulus. The Federal Reserve will hold its policy meeting later today. It’s virtually certain that the Fed will maintain rates for a seventh straight time but that doesn’t mean today’s meeting will be a sleeper. Investors will be carefully following the rate statement and Jerome Powell’s follow-up press conference. Today’s meeting is a good opportunity for the Fed to set up a September rate cut, which the markets have fully priced in. USD/JPY has pushed below support at 152.70 and 151.38. Below, there is support at 149.59 154.49 and 1.5581 are the next resistance lines
by OANDA
Pressure Builds Ahead of Major Central Bank Marathon It's a huge week for central banks with the Bank of Japan (BOJ), Federal Reserve (Fed), and Bank of England (BOE) set to deliver their decisions within a 32-hour window. Market activity remains largely subdued in anticipation. The BOJ’s decision is the most unpredictable. Current market sentiment suggests a ~60% likelihood of a 10-basis point hike and a ~40% chance of no change. A lack of action could undermine the yen's recent gains with a potential resistance at 155.30 (100 MA). The Fed's announcement is scheduled for Wednesday. Market expectations for a rate cut are just 5%. Investors are keenly awaiting any signals regarding a potential move in September. Finally, the Bank of England has the market guessing with an almost 50 –50 chance for a cut. GBP traders are also digesting a key speech from the new finance minister Rachel Reeves in which she unveiled plans for some spending cuts/ or tax increases to fill a £22bn spending shortfall that was 'covered up' by the Conservative government. Traders now also have 30th October to look forward to as the date of the autumn budget.
by BlackBull_Markets
USD/JPY looking for directionThe Japanese yen continues to show volatility but has closed right where it started over the past few sessions. USD/JPY is trading at 153.65 in the European session, up 0.04% on the day. The yen is coming off an excellent week, surging 2.3% against the US dollar. We’re unlikely to see much movement from the yen today, as there are no US releases on the calendar and only one minor release out of Japan. The Federal Reserve meets later this week but the buzz in the market is around the September meeting. The Fed will meet on Wednesday and there have been a few voices calling for a rate cut, but it’s a virtual certainty that the policy makers will maintain the benchmark of between 5.25% and 5.50%. The markets have priced in a rate hike in September for weeks but things have become interesting with the latest inflation release this past Friday. The PCE Price index ticked lower to 2.5% y/y in June, down from 2.6% in May and in line with expectations. Core PCE remained at 2.6%, just above the market estimate of 2.5%. Monthly, the news was very positive - the PCE Price index rose 0.1% and the core rate climbed 0.2%. As well, personal spending and income both eased in July. The data shows that inflation is on a downtrend and that the spike in the first quarter was an aberration. As well, consumer spending is slowing. The markets have responded by raising expectations for a 50-basis point cut in September to 11.9%, compared to 3.8% one week ago, according to the CME’S FedWatch. A quarter-point cut is very likely, with a probability of 87.7%. The Fed could use this week’s meeting to set the stage for a cut at the September meeting, which means the markets will be closely monitoring the rate statement and Jerome Powell’s rate conference. USD/JPY has pushed past resistance at 154.03 and put pressure 154.36 before retreating 153.58 and 153.25 are the next support levels
by OANDA
USDJPY Subdued at Key Tech as Fed & BoJ LoomThe pair comes from its longest losing streak of the year (four week), correcting from its 38-year peak at the beginning of the month. It tests crucial technical levels provided by the 200Days EMA (blue lines) and the 38.2% Fibonacci of the rally from the December 2023 low to the aforementioned high. This creates risk for deeper decline towards the 61.8% Fibo that would bring 146.47 in the spotlight. On the other hand, USD/JPY tries to defend this support cluster, above which it can push for EMA200 (black line). Retaking it would give bulls control and the opportunity to challenge 161.94, although the upside does not look particularly friendly. Other than intervention speculation, the USD/JPY slide is a result of the shift in the monetary policy dynamics and this week’s decisions by the Fed and the BoJ can determine the pair’s trajectory and spur volatility. The Bank of Japan has followed a slow and cautious path to normalization after the March exit form negative rates and there is mounting anticipation for bolder action this time around. Markets see policymakers announcing a reduction in bond purchases and there are also expectation for another hike, but the latter appears to be more contentious. Such action could help the Yen’s rebound, but BoJ has shown apprehension and has surprised markets before. The US Fed on the other hand appears to be coming closer to a rate cut following the resumption of disinflation and moderation in job gains. Markets are aggressively pricing three moves this year and expect policymakers to lay the ground for a Fed pivot at this week’s meeting. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 59% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
by FXCM
GBP/USD towards 1.277 before reaching 1.31Current Context The GBP/USD pair settled at 1.2895 during the Asian trading hours on Thursday. The increasing possibility that the Bank of England (BoE) might start cutting interest rates in August has weakened the British Pound. In the absence of significant economic data releases from the UK, the GBP/USD pair will be influenced by the US Dollar (USD). Support and Resistance Levels Support Levels: 1.2875-1.2870: This range is defined by the 38.2% Fibonacci retracement of the latest uptrend. 1.2830: Level corresponding to the 50% Fibonacci retracement. 1.2800: Psychological and static level. Resistance Levels: 1.2900: Psychological and static level. 1.2940-1.2950: Range defined by the 23.6% Fibonacci retracement. Economic Data Influence UK Data: The S&P Global/CIPS Composite PMI for the UK improved to 52.7 in the flash estimate for July from 52.3 in June, indicating ongoing expansion in private sector business activity. However, statements from Chris Williamson of S&P Global Market Intelligence highlight caution among policymakers in changing monetary policy due to inflationary pressures and additional costs from shipping delays and rising freight prices. The risk-averse market context limits the ability of GBP/USD to regain ground despite positive PMI data. US Data: S&P Global will release the July PMI data for the United States. If either the Manufacturing or Services PMI unexpectedly falls below 50, the US Dollar could maintain its strength, further capping the upside potential for GBP/USD. Market Sentiment The risk-averse market climate is negatively impacting GBP/USD. At the time of writing, the UK's FTSE 100 Index is down nearly 0.5%, and US stock index futures are down between 0.5% and 0.9%. This risk-averse sentiment supports the strength of the US Dollar and exerts bearish pressure on GBP/USD.
Long
by Forex48_TradingAcademy
2
USD/CAD unmoved by Bank of Canada rate cutThe Canadian dollar is almost unchanged on Wednesday, after the Bank of Canada cut rates at today’s meeting. In the North American session, USD/CAD is trading at 1.3778, up 0.05% on the day at the time of writing. The Bank of Canada lowered rates by 25 basis points, bringing the key interest rate to 4.50%. The markets had priced in a rate cut at close to 90%, so the move was widely expected and the Canadian dollar has shown almost no reaction. The BoC has now lowered rates in two straight meetings, as economic data has supported a shift in policy. Headline and core CPI have fallen within the 1-3% target band and monthly CPI posted its first decline since December 2023. The central bank expects the downtrend in inflation to continue in the second half of the year and that inflation will fall to the 2% by 2025. As well, the unemployment rate has risen to 6.4%, up from 5.7% in January. The labor market has performed well under the weight of steep interest rates but is showing cracks. BoC Governor Macklem said after the meeting that if inflation continues to fall as the Bank expects, “it is reasonable to expect further cuts in our policy interest rate”. This is a strong signal that further rate cuts are coming, barring any unpleasant surprises from inflation. There is still more work for the BoC to do, but it is unlikely to cut rates again before the Federal Reserve does so, as further widening of the US/Canada rate differential will weaken the Canadian dollar. The markets have priced in a Fed cut in September at above 90%. USD/CAD has support at 1.3774 and 1.3703 There is resistance at 1.3820 and 1.3891
by OANDA
Front-Running Yield Curve Normalisation on Rate Cut AnticipationThe (in)famous Yield Curve remains inverted. In recent past, spreads normalized only to revert to inversion as rate cut expectations got pushed out. This time though, is different. Recent CPI print has significantly altered market sentiment. The likelihood of an initial rate cut at the September FOMC meeting now exceeds 90%. Consequently, the yield curve is normalizing once more. Current market signals indicate that this normalization could be enduring. WHY IS THE YIELD CURVE INVERTED? The present yield curve inversion indicates that investors do not expect that rates will remain this elevated for long. While 2Y treasuries continue to be re-issued at higher rates, expectations for longer terms such as 10Y and 30Y are lower as they factor in that rates will normalize from their present levels. YIELD CURVE WILL NORMALIZE SOON, WHAT WILL DRIVE IT? While this is the longest period of yield curve inversion in history, the curve has started to normalize. The factors driving normalization in the yield curve were previously discussed. Ordinarily investors demand higher rates for longer-duration treasuries to account for the higher inflation expectations and greater risk. Either inflation must fall, or inflation adjusted treasury yields for longer maturities must rise. Rate cuts will also drive the normalization in the yield curve. The yield spread between 2Y & 10Y treasuries tends to rise in the two months preceding the first rate cut in a cutting cycle as observed in the past. The impact of rate cuts on the 2Y-10Y spread is even more pronounced in the two months following the first-rate cuts. UNCERTAINTY IN MACRO ECONOMIC DATA IS DISSIPATING Make no mistake, the broader picture remains uncertain. However, recent data points to recovery. Chicago PMI showed a sharp recovery in July. But the job market signals uncertainty. Continuing jobless claims remain elevated. Job openings have fallen. But job creation in the last two non-farm payroll prints were above expectations. US Retail sales and industrial production have improved. The impact can be observed through the consistent increase in the GDPNow forecast for Q2 GDP since 12/July. Source: GDPNow The June CPI release showed uncertainty easing. Headline CPI cooled sharply as it fell on a MoM basis. Notably, the stickier core CPI also continued to cool as it fell to 3.3%. However, inflation remaining sticky at the 3% level remains a grave concern. Even if a recession does arrive in the coming months, the 10Y-2Y yield spread is likely to have normalized by then. Yield curve inversion is observed only before recessions not during. RAPID RATE CUTS EXPECTED IN THE COMING YEAR Source: CME FedWatch The rate cuts outlook has improved substantially. FedWatch signals that rates will fall by 100 basis points by March 2025 (as of 19/July) suggesting successive cuts. Other analysts are even more optimistic. Analysts at Citi bank hold the view that rates will be slashed by 200 bps (2% in total), starting in September across eight successive FOMC meetings (25 bps at each) by the summer of 2025. CERTAINTY IN RATE OUTLOOK SUGGESTS YIELD CURVE NORMALIZATION Major moves in the yield curve have only come through after commencement of rate cuts in the past. This time, markets may front-run these expectations. The attempts to front-run rate cuts were already observed in December when the yield spread recovered sharply after the Fed signaled six potential rate cuts in 2024. Presently, the 10Y-2Y yield spread is trading below those levels and has the potential to break out as we approach September rate cuts. The risk of a reversal remains but it is lower. Higher rates pose a systemic risk for the US given its profligate borrowing. Higher rates on treasuries are untenable for much longer. Cost of servicing public debt in June hit USD 140 billion and totaled USD 868 billion in the first nine months of the current fiscal year (33% higher YoY). For reference, the total budget deficit for this period was $1.27 trillion. The interest burden is weighing heavily on the overall budget deficit. HYPOTHETICAL TRADE SETUP Treasury auctions are a sound guide to maturities selection when positioning for yield curve normalization. The recent demand for treasuries at the latest auctions has been low. Bid-to-cover ratio for all (2Y, 5Y, 10Y, and 30Y) was lower than the average bid-to-cover over the prior ten auctions. Demand was weak for the 10Y treasuries. Demand for 30Y treasuries has also been lower than previous auctions but has remained more consistent than 10Y. The yield spread between 30Y-2Y treasuries has outperformed the 10Y-2Y spread over the past 2 months. Investors can seize opportunities from normalization in the 30Y-2Y spread using CME Yield futures. The CME Yield futures are quoted directly in yield with a one basis point change in the yield representing a P&L of USD 10. As yield futures across various maturities represent the same notional, to calculate the spread P&L is equally intuitive with a one basis point change in the spread between two different maturities also equal to USD 10. The hypothetical trade setup consisting of long 30Y and short 2Y is described below. • Entry: -2.6 basis points (bps) • Target: +25 bps • Stop Loss: -25 bps • Profit at Target: USD 276 (27.6 bps x USD 10) • Loss at Stop: USD 224 (22.4 bps x USD 10) • Reward to Risk: 1.24x MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CBOT_MINI:30Y1!Long
by mintdotfinance
Oil Prices Plunge Amid Global UncertaintyCurrent Price Movement: West Texas Intermediate (WTI) futures on the NYMEX have extended their downside, trading below $78.00. This decline is primarily driven by concerns over China's economic outlook and political uncertainty in the United States. Factors Influencing the Oil Price: China’s Economic Concerns: The People's Bank of China (PBoC) unexpectedly reduced its Loan Prime Rate by 10 basis points to 3.35% (one-year) and 3.85% (five-year). This rate cut follows weaker-than-expected Q2 GDP growth of 0.7%, below estimates of 1.1% and previous figures of 1.5%. As the world's largest oil importer, China’s economic slowdown raises concerns about future oil demand, exerting downward pressure on prices. Supply Outlook: Morgan Stanley forecasts an increase in oil supply by 2.5 million barrels per day by 2025 from OPEC and non-OPEC producers. The anticipated supply growth exceeds demand growth projections, contributing to the easing of tight market fears and further weakening oil prices. US Political Uncertainty: The potential nomination of Kamala Harris as the Democratic leader and speculation about Donald Trump’s potential victory in the upcoming presidential election have created political uncertainty. Trump’s promise to increase US oil production if elected could lead to a future increase in supply, adding downward pressure on oil prices. The US Dollar Index (DXY) has edged lower amidst this political uncertainty, affecting oil prices inversely. Global Economic Indicators: Preliminary S&P Global Manufacturing PMI data from various nations are expected to provide insights into the global demand outlook, which will further influence oil prices. Canadian Dollar (CAD) Dynamics: The USD/CAD pair has risen to near 1.3750, influenced by the sharp correction in oil prices. Canada, being a leading oil supplier to the US, sees its currency affected by oil price movements. The weakening CAD amidst declining oil prices reflects this relationship. Expectations of the Bank of Canada (BoC) cutting interest rates by 25 basis points to 4.5% due to easing price pressures and a cooling labor market also impact the CAD. US Economic Data: The trajectory of the US Dollar will be influenced by upcoming US economic data, providing clues about the Federal Reserve's interest rate decisions. Political developments, such as the withdrawal of Joe Biden's re-election bid, have added to the uncertainty, impacting the DXY and, consequently, oil prices.
TVC:USOILShort
by Forex48_TradingAcademy
1
$QQQ Nasdaq with Rate Hiking Cycle DatesGoing along with my usual 'Key Hidden Levels' in the markets perspective that NEWS is an important price level to mark on charts so it is visible to everyone, I have created the update to the "Rate Hiking Cycle" chart. The purple triangles and lines are the range of the day of the announcement and the mid-point of the day plotted horizontally forward. With this data you can see how past levels where the Fed Rate Decision occurred has provided either support or resistance to the movement of the market. Typically it hasn't been as obvious the the observer of a chart all by itself without these markings. At some point these important news levels will be visible for all of us investors so we can see and understand more quickly how the market is absorbing or dealing with the news. I hope you enjoy this chart an continue to update it for yourself. I will work to get these dates into the system so you can all see them on every chart. Wishing you all the best in your investing and trading. Tim 1:48PM, Thursday May 23, 2024
NASDAQ:QQQ
by timwest
3
EUR/USD: will it reach the level of 1.11?EUR/USD stays below 1.0900: The pair has defended gains in a context of a weak US Dollar (USD), despite risk aversion, which has supported the EUR/USD exchange rate. Focus on Political and Macroeconomic Data: Attention remains on US political updates and mid-tier economic data from both the EU and the US for fresh trading impetus. Key Technical Levels Resistances: First resistance at 1.0950. Followed by the March high at 1.0980. Psychological level at 1.1000. Supports: June low at 1.0668. May low at 1.0650. 2024 annual low at 1.0600. Fundamental Factors Factors Affecting the US Dollar: The USD regained momentum on Thursday, pushing the USD Index (DXY) above the 104.00 level, thanks to a rebound in US yields. Prospects of Fed rate cuts, with the CME Group's FedWatch Tool indicating a nearly 98% probability of lower rates at the September 18 meeting and another cut expected in December. Factors Affecting the Euro: The ECB maintained a dovish stance at Thursday's meeting, with a slight uptick in German 10-year Bund yields. Christine Lagarde highlighted expectations of a recovery supported by consumption, with a resilient labor market and high domestic inflation. The ECB projects that the Harmonized Index of Consumer Prices (HICP) will reach the target in the second half of 2025. Monetary Policy Outlook: Ongoing debate about how many times the Fed will cut rates this year, despite the current projection of a single cut. Prospects of Fed rate cuts occasionally support EUR/USD, reducing the gap between the Fed's and the ECB's monetary policies. Outlook and Prospects Short-Term Prospects: The trading dynamics for the EUR/USD pair will likely be influenced by upcoming Fed speeches and economic updates from both the US and the Eurozone. The loss of bullish momentum indicated by the 4-hour chart suggests caution, but defending key levels like the 200-SMA and the indicated supports could provide further bullish impetus. Medium-Long Term Prospects: If the EUR/USD convincingly surpasses the 200-SMA, further gains may be on the horizon. However, failure to do so could lead to a test of lower support levels.
Long
by Forex48_TradingAcademy
1
WTI Oil Price Analysis: Market Dynamics and Global ChallengesCurrent Situation: The price of West Texas Intermediate (WTI) has experienced a slight decline due to the strengthening of the US dollar (USD), supported by rising yields. Currently, the price of WTI is around $81.20 per barrel during European hours on Thursday, after gaining ground in the Asian session due to a larger-than-expected drop in US crude oil inventories. Supply and Demand: The reduction in US crude oil inventories has been significant. The Energy Information Administration (EIA) reported a decrease of 4.87 million barrels for the week ending July 12, a figure much higher than the expected drop of 0.80 million barrels and the previous decrease of 3.443 million barrels. This decline in inventories may suggest robust domestic demand, which can have a positive effect on oil prices. Impact of Monetary Policies: Expectations that the Federal Reserve (Fed) will reduce interest rates in September could improve economic conditions in the United States. With lower borrowing costs, economic activity could increase, which in turn could support oil demand. Statements by Fed Governor Christopher Waller and Richmond Fed President Thomas Barkin indicate a possible rate cut, which could further incentivize oil demand. Market Pressures: Despite some positive signs, the overall decline in commodity demand expectations continues to threaten the energy complex. According to Daniel Ghali, senior commodity strategist at TDS, the absence of an increase in supply risk premia could continue to exert downward pressure on prices. However, Commodity Trading Advisors (CTAs) still have substantial resources to deploy in the market, which could limit price declines in the short term, barring a significant downturn. Global Challenges: Another challenge for WTI oil prices is the economic slowdown in China in the second quarter, which reduces demand from the world's largest oil-importing country. Increasing trade tensions, with new tariffs on Chinese electric vehicles imposed by the United States and the European Union, contribute to an uncertain global economic outlook, negatively impacting oil demand.
TVC:USOILShort
by Forex48_TradingAcademy
1
NZD/USD Rises despite Soft NZ InflationThe Reserve Bank of New Zealand kept rates at 5.5% last week, but adopted a softer tone compared to the hawkish messaging of the previous meeting, raising chances of a rate cut this year. Today’s soft inflation data help towards such action, since CPI eased to 3.3% in Q2 and the lowest in three years. Despite these prospects, NZD/USD contains its fall and rebounds today, as there is still a high bar for an RBNZ pivot. At the same time, the Fed may have adopted a cautious stance, but Chair Powell appears to be laying the groundwork for a September cut, as the disinflation trend has resumed, with markets pricing in three moves this year. The monetary policy dynamics are a bit murky, but likely support further upside. Having defended crucial technical levels, NZD/USD can regain the EMA200 (black line) and push for new monthly highs (0.6148), but we are cautious around greater advance 0.6223. But market bets for three cuts by the Fed are very aggressive and would require the Fed to move in three consecutive meetings. This optimism could be disappointed, just as prospects of an RBNZ pivot are strengthening. Below the EMA200, immediate bias is on the downside and risk of a breach of the 50% Fibonacci and the daily Ichimoku Cloud persists. This would make NZD/USD vulnerable t0 0.5952, but sustained weakness is not easy based on the monetary policy dynamics. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. S tratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
by FXCM
Trump, Fed Speculation Drive Gold to New Heights Trump, Fed Speculation Drive Gold to New Heights Gold price cleared the May 20 high of $2450 on Tuesday, as expectations intensify that the U.S. Federal Reserve will commence an easing cycle in September. Fed Chair Jerome Powell addressed the Economic Club of Washington this week, noting the economy's solid performance and signaling potential rate cuts once inflation trends towards the 2% target. The CME FedWatch Tool indicates near-certain odds of a 25-basis point rate cut in September, with many forecasting a total of 50 basis points in cuts through 2024. But one has to question the accuracy of these optimistic predictions. The next FOMC meeting is in 14 days. Adding to the upward momentum on gold is the potential election of former President Donald Trump in November. Trump's proposed policies, including tariff hikes and tax cuts, are anticipated to increase the U.S. budget deficit and spur inflationary pressures. Bullish momentum in gold appears intact, supported by the Relative Strength Index (RSI) on the daily chart. Although it is trending higher and approaching typical overbought conditions.
BLACKBULL:XAUUSD
by BlackBull_Markets
AUD/USD To Start A New Upside Move?A Hawkish RBA stance, likely to hold rates for some time is a contrast to a FED looking at a softer landing. This difference, particularly in recent times has shown fully. AUD strength has been sustained, whereas lower inflation data has supported the case for easing and brought USD weakness. After lower highs and higher lows have formed a tight price range, you can now see AUD pushing to the upside, towards new shorts zones above. Likely this will continue as sentiment influx does likewise. Short Zones noted above inline with previous short zones (see above eclipse). Long zones are ideal on any falls.
by WillSebastian
2
USOIL | The Sell Off is nearWTI crude oil prices have shown a downward trend in recent sessions, falling for three consecutive days. Currently, WTI stands around the $80.70 region, recording a daily loss of about 0.40%. Despite this decline, the price remains above the overnight swing low, suggesting a lack of conviction among sellers. Factors Influencing Prices Chinese Economy: Economic Growth Data: Official data released on Monday showed that China's economy grew by 4.7% in the second quarter of 2024, down from 5.3% in the first quarter. This has fueled concerns about a slowdown in the Chinese economy, the world's largest oil importer, and a consequent decrease in fuel demand. Impact on the Oil Market: Concerns about Chinese demand are a key factor exerting downward pressure on crude oil prices. Strength of the US Dollar (USD): Dollar Recovery: The US dollar has gained traction, recovering from a more than three-month low touched on Monday. A stronger dollar makes USD-denominated oil more expensive for buyers using other currencies, thereby reducing demand. Monetary Policy Outlook: The growing acceptance that the Federal Reserve might start a rate-cutting cycle as early as September could limit further dollar gains, partially mitigating the negative effect on oil prices. Supply Concerns: Middle East Conflicts: Concerns about potential supply disruptions due to ongoing conflicts in the Middle East continue to support oil prices. This factor could limit further losses in the short term. Forecasts and Expectations Price Range: WTI seems to remain confined within a familiar range maintained over the past two weeks, with prices oscillating around the $80.70-$81.30 region. Awaiting External Impulses: Market participants are now waiting for US retail sales data to find new drivers that could influence prices. Need for Confirmation: To position for a further extension of the recent pullback from levels near $84.00, it would be prudent to wait for more convincing selling signals.
TVC:USOILShort
by Forex48_TradingAcademy
1
XAUUSD is ready to reach $2500 before the crash!Current Overview Gold (XAU/USD) has regained traction, trading in positive territory slightly above $2,420 after dipping towards $2,400 at the beginning of the week. Technical Analysis Daily Chart: The bullish outlook for XAU/USD remains strong despite a retreat from intraday highs. The daily chart shows that the pair is rallying well above bullish moving averages. Technical indicators are gaining upward momentum and approaching overbought readings, with no signs of reversal. 4-Hour Chart: In the near term, XAU/USD might face challenges in extending its gains. Technical indicators are retreating from overbought readings with uneven strength but remain above the bullish 20-period Simple Moving Average (SMA) around $2,400. Key Levels Resistance Levels: Immediate resistance is at the recent high of $2,439. If XAU/USD surpasses this level, it could test the year-to-date high of $2,450. Further gains could target the $2,500 level. Support Levels: Initial support is at $2,400. Market Sentiment US Dollar Dynamics: Demand for the US Dollar initially increased following the weekend news of an assassination attempt on former President Donald Trump. However, the Greenback quickly lost ground as investors speculated that a potential Trump election win might lead to looser fiscal policies. Fed Policy Outlook: Moody’s Credit Rating Agency predicts that the Federal Reserve could start easing monetary policy as early as this month, with potential rate cuts of 50-75 basis points in 2024 and an additional 100-125 basis points by 2025. This dovish outlook has bolstered gold prices, as lower rates make non-interest-bearing assets like gold more attractive. Economic Data: US Consumer Price Index (CPI) data came in weaker than expected, increasing the likelihood of a Fed rate cut, as reflected by falling US Treasury bond yields. The University of Michigan's Consumer Sentiment Index dropped to a seven-month low of 66.0 in July, missing expectations, which further supports the case for rate cuts. Additional Influences Global Factors: The People's Bank of China (PBoC) decided to halt gold purchases in June, as it did in May. By the end of June, China held 72.80 million troy ounces of gold.
OANDA:XAUUSDShort
by Forex48_TradingAcademy
2
EURUSD heading towards 1.10!Current Overview EUR/USD is defensive below 1.0900 in the Asian session on Monday, edging lower amid risk aversion following the shooting incident at a Trump rally. This event has bolstered the US Dollar due to its safe-haven appeal. The pair's focus remains on US politics and upcoming statements from Federal Reserve officials. Technical Analysis Support Levels: The first support is at 1.0840-1.0850. Further support is at 1.0800. Resistance Levels: If EUR/USD rises above 1.0900 and confirms this level as support, it could target 1.0950 and then 1.1000. Market Sentiment US Inflation Data: Recent soft inflation data from the United States has put downward pressure on the US Dollar. The Consumer Price Index (CPI) decreased by 0.1% on a monthly basis, while core CPI increased by only 0.1%. Both readings were below market expectations, increasing the likelihood of a Federal Reserve rate cut in September. According to the CME FedWatch Tool, the probability of the Fed leaving the policy rate unchanged in September has declined to below 10% from over 20% before the CPI data release. Additional Influences US Political Climate: The recent incident during a Trump rally in Butler, Pennsylvania, where former President Donald Trump was injured in an assassination attempt, has increased risk aversion and supported the US Dollar. US Economic Data: The Producer Price Index (PPI) rose to 2.6% year-on-year in June from the previous revised 2.4%, above the expected 2.3%. Core PPI increased to 3.0% year-on-year, surpassing the expected 2.5%. The University of Michigan's Consumer Sentiment Index dropped to 66.0 in July from 68.2 in June, missing expectations of 68.5. The UoM 5-year Consumer Inflation Expectations declined to 2.9% from the previous 3.0%. Fed Outlook: Analysts from Fitch suggest that the Federal Open Market Committee (FOMC) might cut interest rates sooner than expected due to concerns about the labor market. Fed officials are likely to be cautious about additional weaknesses in the labor market. Eurozone Outlook: Eurozone officials expect pricing pressures to remain stable throughout the year, reducing expectations for further rate cuts by the European Central Bank (ECB). ECB President Christine Lagarde emphasized a cautious approach, highlighting uncertainties in the growth outlook.
Long
by Forex48_TradingAcademy
1
GBPUSD H8 - Sell SignalGBPUSD H8 Converse to AUDUSD analysis above. We also have the likes of GBPUSD here in front of us, where we have seen a rejection from 1.28500 price, a half number acting as resistance. If we look to the left on this chart, on June 12, you'll notice and aggressive selloff. This formed an attractive area of supply. We have a few confluence in and around this 1.28500 price, so it's certainly a zone to keep an eye on for USD strength resumption. A double top on 1.28500 could be a great sell signal.
Short
by Trade_Simple_FX
USDJPY towards 154 or 166?Current Situation USD/JPY is holding at elevated levels near 161.00 during Asian trading on Tuesday. The high-risk sentiment, driven by expectations of a Fed rate cut, contributes to the pair's latest increase. All eyes are on Fed Chair Powell’s testimony for further indications on monetary policy. Recent Data and Technical Indicators Daily Chart: On Wednesday, July 3, USD/JPY posted a bearish Hanging Man candlestick pattern, followed by a bearish down day, confirming the bearish sentiment. Support and Resistance: Support: The pair found support at the April 29 high of 160.32, forming a price gap indicating potential exhaustion. Resistance: It is currently trading against resistance from the 50-period Simple Moving Average (SMA). Key Factors Fed Rate Cut Expectations: Speculation about a possible rate cut by the Federal Reserve in September has increased, with the CME’s FedWatch tool indicating a 76.2% probability, up from 65.5% the previous week. Powell’s Testimony: Market participants are awaiting Fed Chair Jerome Powell’s testimony on the Semiannual Monetary Policy Report to the US Congress for further insights into future policy direction. Japanese Yen Weakness: The JPY is extending losses due to foreign asset purchases by Japanese individuals under the Nippon Individual Savings Account (NISA) program and concerns over potential intervention by Japanese authorities in the FX markets. US Treasury Yields: Rising speculation about a Fed rate cut is putting pressure on US Treasury yields, which could limit the upside for the US Dollar. Market Sentiment and Projections Short-term Trend: USD/JPY remains in a short-term downtrend. However, given the exhaustion gap and the strong medium to long-term uptrend, there is a risk the pair could continue recovering. Potential Targets: Upside: If the pair surpasses 161.40, it would be a bullish signal, with further gains potentially reaching 162.90. Downside: A break below 160.20 would confirm further downside towards a probable target of 158.50.
Short
by Forex48_TradingAcademy
2
XAUUSD Heading Towards $2440?Current Situation The gold price (XAU/USD) registered a decline during the Asian session on Monday, following the news that the People’s Bank of China (PBoC) suspended gold purchases for the second consecutive month. This decision negatively impacted the gold price as China is the world's largest consumer of this precious metal. Recent Data Current Price: Gold has experienced a decline, stabilizing below the $2,400 threshold. Key Factors PBoC Purchases: The PBoC maintained its gold stock at 72.80 million troy ounces in June, contributing to the decrease in gold demand. US Interest Rates: The possibility of an interest rate cut by the Federal Reserve in the third quarter could support the gold price. Political Situation in France: Political uncertainty in France might increase the demand for safe-haven assets like gold. US Treasury Yields: A slight recovery in US Treasury yields makes gold less attractive as an alternative asset. Technical Forecast Resistances: $2,400 (psychological level) $2,450 (all-time high) Supports: $2,330-$2,340 Outlook In the short term, if buyers regain strength, the gold price could retest the six-week high of $2,393, with a potential break above the $2,400 threshold opening the path towards the all-time high of $2,450. However, a further decline could lead the price to challenge Friday’s low of $2,352, with a possible drop to the support zone at $2,340.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
1