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Inflation

Inflation (CPI) - A Battle Already LostInflation ( CPI ) - A Battle Already Lost I've recently shared my outlook on CPI and where I think its headed in the months ahead but after further review, it seems that I've previously overlooked certain signals which should have altered my perspective in a way that it did not. Based on discovery of those signals, I have now updated my anticipatory CPI chart to highlight certain levels of interest. As we can see on the wavemap, the Consumer Price Index (a measure of inflation) has broken above its 40+ year bearish trend line. The breakout was very strong and should be considered as very significant. The format of the wave during this breakout has developed as what seems to likely be a zig-zag formation. Noticeably, the upside zig-zag wave has retraced 90% of the 40 year long bearish drawdown. Therefore, leaving little probability of it being a truly corrective wave. Aside from the macro bear trend-line, I have also highlighted the newly respected bullish trend-line. Finding resistance near 6.77, Fibonacci measurements suggest that the pending action will fall to retest the former price containing trend line and maybe even drop below it. Specifically, Elliott Wave Theory suggests that 0.99-1.01 should be the downside target range. Over the past 20 years, this level has also supplied nearly unbeatable support. If support is once again discovered near 1.00, the currently active wave could then be sent to retest the red bullish trend, at a level near 9-10. Ultimately, completion of the blue diagonal will signify that the CPI (and inflation) area headed for upside levels that the American economy has never witnessed. Personally, I believe that inflation is a byproduct of capitalism and there is no true containment possible. The next decade will prove to show if this is on point or simply farce.
ECONOMICS:USCCPI
by DigitalSurfTrading
SILVER Bounce from Support?!Here we are looking at SILVER on the Weekly TF… As you can see, SILVER has been trading within a macro symmetrical triangle structure, which has clear and established support and resistance lines. Silver has been trading within this structure since March of 2020 (COVID—19 Crash). Since then, it has tested descending resistance 5 times on the weekly, and ascending support 3 times (so far). Currently, SILVER is on its way to that support, and I expect it to reach that line soon (relative to the weekly TF candles). While it’s still too early to definitively say, I do believe that SILVER will bounce from support, and make another run to resistance in another attempt to breakout to the upside. 
What do you think SILVER will do next? Let me know in the comments! Cheers!
TVC:SILVERLong
by GarethSolowayOfficial
4
USOIL chart & US inflation Ticker belowHere is the cause of inflation - OIL As its price rises, initially, nothing changes ( Arrows) But once the increase in cost is begun to be felt Retails prices rise to cover increase costs of manufacture, transport, staff Staff demand more wages so they can buy goods Repeat Then The FED comes in , raises the cost of Borrowing, putting pressure on retail to LOWER prices so that the Pubic can buy goods Note how the price of oil drops PRIOR to the effects of raises in interest rates HERE is your Problem Also, take note of the contract that the Petro$ had and that has now been Stopped by OPEC countries. The OIL charts over the next few years are going to show some interesting patterns I thinnk
TVC:USOIL
by Orriginal
1
Swissie rally fizzles, SNB's Jordan up nextUSD/CHF has rebounded on Tuesday, ending a rally that saw the Swiss franc climb over 1%. In the European session, USD/CHF is trading at 0.9344, up 0.40%. Switzerland released the February inflation report on Monday and the reading was higher than expected. CPI rose 0.7% m/m, up from 0.6% in February and above the 0.4% forecast. On an annualized basis, CPI climbed 3.4%, edging up from 3.3% and higher than the forecast of 3.1%. These inflation numbers would be a dream come true for most major central banks, which are struggling with inflation levels two or three times higher. Still, the Swiss National Bank is concerned about high inflation, as its target is 0-2%. The SNB was widely expected to raise rate by 50 basis points at the rate meeting on March 23 and the uptick in February inflation cements the likelihood of such a move. Swiss National Bank Chair Jordan will make an appearance later today and is likely to address the rise in inflation. The SNB does not provide forward guidance for its rate policy, but the central bank has projected an inflation rate of 2.4% for 2023. With the cash rate currently at 1%, it's a safe bet that we'll see another hike in June of either 25 or 50 basis points. The continuing tightening should provide a boost to the Swiss franc, but traders should keep in mind that the SNB has not hesitated to intervene in the foreign exchange market when the Swiss franc became too strong for its liking. In the US, Federal Reserve Chair Powell will be in the spotlight as he testifies before a Senate committee later today. The Fed has remained hawkish and after a host of strong January releases, the markets have shifted their expectations closer to the Fed's stance. It was only a few weeks ago that the markets were projecting a pause followed by rate cuts, but this has changed to pricing in three more rate hikes this year. There is a lot of uncertainty in the air about inflation and interest rates and the markets are hoping that Powell's comments will provide some clarity. There is resistance at 0.9381 and 0.9420 0.9304 and 0.9224 are providing support
by OANDA
$DXY chart update 3/6 👁‍🗨️*This is not financial advice, so trade at your own risks* *My team digs deep and finds stocks that are expected to perform well based off multiple confluences* *Experienced traders understand the uphill battle in timing the market, so instead my team focuses mainly on risk management* !! This chart analysis is for reference purposes only !! Market conditions are supporting the continuation of strength in the dollar. Expect Bitcoin , Gold , and SPY to retrace during this period. If you want to see more, please like and follow us @SimplyShowMeTheMoney
TVC:DXYLong
by SimplyShowMeTheMoney
Gold as an Inflation Hedge? Myth Busted!COMEX: Micro Gold Futures ( COMEX_MINI:MGC1! ) and Gold Options ( COMEX:GC1! ) Gold is often hailed as an effective hedge against inflation. It generally increases in value as the purchasing power of the US dollar declines over time. Does this still remain true? Since January 2013, the US Consumer Price Index increased 29.4% cumulatively, while the 10-year total return of Gold is only 11.3%. Let’s demystify the gold myth. In fact, gold is by no means among the best-performing investment assets in the past decade! Let’s look at where investing $10,000 in different assets would take you in the past ten years: • If you held $10,000 in cash, you still have $10,000, a 0% nominal return; • If you bought a gold ETF fund, you would have $11,300, assuming it tracks gold price perfectly. However, after subtracting an average 0.5% a year in fund expense, you would end up with only $10,800, an annual return of merely 0.78%; • 5-year bank certificate of deposit (CD) yielded 1.0%/APR in 2013 and 1.5% in 2018. If you put the money in CDs back-to-back, you would have $11,322 now; • If you invest in a market index stock portfolio, the S&P 500 gained 159% in the past ten years. You would end up with $25,900; • If you bought bitcoin at $4.43 each in January 2013, you would have amassed nearly $1.6 million from the original $10K, an astonishing 15943% return! Actual data shows that holding gold, a non-yielding asset, underperformed other investable assets in the past decade. Gold price endured a double-digit decline, from $1,600 per troy ounce, to as low as $1,000, during the low-inflation period of 2013-2018. It shot up in 2019 as the US-China trade conflict intensified. The outbreak of Covid pandemic pushed gold to a record high of $2,075 in August 2020. As US economy remerged from Covid in 2021, gold price fell back to $1,700. Then, the Russia-Ukraine conflict pushed it back up above $1,900. However, when the Federal Reserve embarked on the path of rate increases, gold price fell sharply to $1,600. This was a period where US CPI raged between 7-9%, and gold completely failed as a defense against inflation. US Dollar Is the Primary Price Driver Gold prices rose on Friday as a rally in the dollar and bond yields paused. COMEX Gold Futures (GC) for April delivery closed up $14.10 to $1,854.60 per ounce. The rise comes on expectations that higher interest rates are on the way as reports show that US economy is still running too hot to quell high inflation. Dollar index was down 0.35 points to 104.68, while the US 10-year note was paying 3.977%, down 8.4 basis points. US dollar continues to call the shot for gold as investors assess the Fed's rate path. The above chart shows a perfect negative correlation between gold price and dollar index. When dollar rises, gold falls; and when dollar declines, gold advances. Last month, the dollar's bounce had weighed heavily on gold. The dollar rallied as a run of hot U.S. labor and inflation data saw traders’ expectations for more aggressive Fed rate increases. A stronger dollar can be a drag on commodities priced in dollar, making them more expensive to users of other currencies. In recent weeks, gold may have found some support on fears that an aggressive Fed could push the U.S. economy into recession, but a continued rise in U.S. Treasury yields, along with a relatively resilient dollar means limited upside . Rising Treasury yields raise the opportunity cost of holding non-yielding assets, like gold. Short-term Trading Strategies At $1,850, gold is neither too expensive nor too cheap by historical standard. As such, I am not in favor of an outright directional trade, one way or the other. However, the market’s razor-thin focus on Fed rate actions will make a compelling reason for event-driven trades on Gold Futures and Gold Options. March is a very active month for macro-economic data releases: • March 8th, Fed Chair Powell will testify on the central bank's semi-annual monetary policy report to the House Financial Services Committee; • March 10th, Bureau of Labor Statistics will release February employment report; • March 14th, BLS will release the February CPI report; • March 22nd, Fed will announce its interest rate decision. Financial market tends to be sensitive to these data releases, as the latter could deliver huge shocks if actual data goes beyond market expectations. If you expect an upcoming data release to be bullish on gold, you could express this view with a long futures position on COMEX Micro Gold Futures (MGC). Each MGC contract has a notional value of 10 troy ounces. At $1,880, a June 2023 contract (MGCM3) is valued at $18,800. Initiating a long or short position requires a margin of $740. This is approximately 4% of contract notional value. In comparison, buying physical gold (i.e., gold bar or gold coin) and gold ETF fund requires 100% upfront investment. If gold price moves up to $1,950, the futures account would gain $700. Relative to the initial margin, this would equate to a return of +94.6%, excluding commissions. Alternatively, the same bullish view could be expressed by a call option of COMEX Gold Futures. Each COMEX Gold Future contract has a notional value of 100 troy ounces. At $1,880, a June futures contract (GCM3) is valued at $188,000. A call option on the 1,900 strike is quoted 37.0 on 3 March 2023. Acquiring 1 option requires an upfront premium of $3,700 (100 ounces per contract). If gold moves up to $1,950, the options account would be credited by $5,000 (=(1950-1900) x100), which represents a theoretical return of +35.1% from the original investment of $3,700. If you are bearish on gold, a short MGC futures or a put option on GC would be appropriate. Futures and options account would gain in value if the price of gold falls. Similar to investing in physical gold or gold ETFs, the biggest investment risk is betting the wrong direction. However, futures have a built-in leverage. In the case of MGC, each $1 movement in gold price translate into $10 variance in futures account balance. Options have a non-linear payout diagram. As the contract moves deeper in-the-money, options value grows exponentially. Long-term Trading Ideas After the active central bank action period is over, will gold price trend up or down? What would be the primary driver of gold price? Inflation, US dollar, interest rate, economic growth, or geopolitical crisis? All are possible, maybe a little bit of each. My research reveals that gold price has a relatively stable relationship with WTI crude oil (CL). Over the past ten years, each 1,000 barrels of WTI (1 CL) sell at a price between 150 and 300 ounces of gold for about 80% of the time. We could visualize an oil producer wanting to be paid by gold. When dollar fluctuates, he would adjust the dollar selling price to keep his gold acquisition stable. Therefore, whenever the price range is breached, gold price has a strong tendency of falling back in. In the next writing, I would explore a convergence/divergence idea between GC and CL. Stay tuned! Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trade set-ups and express my market views. If you have futures in your trading portfolio, check out on CME Group data plans in TradingView that suit your trading needs www.tradingview.com
COMEX:GC1!Long
by JimHuangChicago
2
GOLD : Benefits of Investing in GoldOANDA:XAUUSD Gold has been an inconsistent inflation hedge, but there may still be benefits to holding a small amount of the yellow metal in your portfolio. Gold has historically had a low or even negative correlation to both stocks and bonds, suggesting it offers value as a tool of diversification. Gold prices held up pretty well during the Covid-19 pandemic market sell-off in early 2020, for example. From Feb. 1 to April 1 in 2020, the S&P 500 declined 23% while the price of gold dropped less than 0.1%. Demand for gold from investors, central banks, jewelers and tech companies is also growing. According to the World Gold Council, global gold demand increased 12% year over year to 2.189 tons in the first half of 2022. Depending on your individual goals, there are several easy ways to invest in gold. Investors can buy gold bullion, physical bars or coins that can be kept in a safe or bank. You can also buy physical gold exchange-traded funds (ETFs) that hold gold bullion on investors’ behalf. The most popular gold ETF is SPDR Gold Shares (GLD). Investors looking to speculate in the gold market can trade gold futures contracts. These contracts provide significant leverage, allowing investors to control large quantities of gold with a relatively small amount of money. Finally, investors can buy shares of individual gold stocks or a gold mining ETF. The VanEck Gold Miners ETF (GDX) holds a diversified basket of 54 gold-related stocks, including Newmont Corp. (NEM), Barrick Gold Corp. (GOLD) and Franco-Nevada Corp. (FNV). Conclusion : GOLD IS SAFE HEAVEN TO INVEST IN IT .
OANDA:XAUUSDEducation
by INVESTRONE
1
GOLD : What Drives the Price of Gold ?OANDA:XAUUSD Gold is highly sought after, not just for investment purposes and to make jewelry but also for use in the manufacturing of certain electronic and medical devices. As of February 2023, the price of gold was more than $1,870 an ounce. While down around $100 from a high posted in April 2022, it is still up considerably from levels under $100 seen 50 years ago. But what factors drive the price of this precious metal higher over time ? KEY TAKEAWAYS 1 Investors have long been enamored by gold, and the price of the metal has increased substantially over the past 50 years. 2 Not only does gold retain additional value, but supply and demand have a huge impact on the price of gold—especially demand from large ETFs. 3 Government vaults and central banks comprise one important source of demand for gold. 4 Gold sometimes moves opposite to the U.S. dollar because the metal is dollar-denominated, making it a hedge against inflation. 5 Supplies of gold are primarily driven by mining production. Conclusion : Gold Is a high Value Asset , Which Can be Hedge Against Growing Inflation.
OANDA:XAUUSDEducation
by INVESTRONE
USD/JPY dips as Tokyo Core CPI slowsThe Japanese yen has gained ground on Friday. In the European session, USD/JPY is trading at 136.17, down 0.44%. There was some positive news on the inflation front, as Tokyo Core CPI for February slowed for the first time since January 2022. The indicator was expected to rise from 4.3% to 4.5%, but instead reversed directions and fell to 3.3%. The sharp drop was not a complete surprise, as it was driven by government subsidies, including a 20% reduction in household electricity bills, which took effect in February. Without the subsidies, it's likely that the Tokyo inflation figure would have come in around 4.5%. It's unclear how long the government will continue these subsidies, which means that the inflation picture remains uncertain. The Bank of Japan has insisted that rising inflation is transient and is a result of external factors such as high commodity prices rather than domestic inflationary pressures. The central bank has insisted on maintaining its massive stimulus programme even though inflation has been on the upswing and is more than double the BoJ's target of 2%. All eyes are on the Bank of Japan, as the changing of the guard looms ever closer. BoJ Governor-elect Kazuo Ueda will take over the helm from Haruhiko Kuroda in early April. Ueda has been careful not to make any waves at his confirmation hearings, saying that the central bank's current policy is appropriate. Still, the markets aren't convinced that Ueda will maintain Kuroda's ultra-loose policy, especially with rising inflation. The BoJ's yield curve control (YCC) policy has damaged the bond markets and there is speculation that Kuroda could make a grand exit at his final meeting on March 10 and tweak YCC in order to relieve pressure on Ueda. There is resistance at 137.37 and 138.24 135.65 and 134.78 are providing support
by OANDA
Sweet Divergence Since the start of January, most leading macro markets have experienced a reversal around their 38.2% Fibonacci retracement levels. However, BTC has shown resilience and fought the cross-asset sell-off. This divergence is likely driven by the fact that there has been over $1 trillion in net liquidity added to the market since the bottom in October, primarily driven by the People's Bank of China and the Bank of Japan, helping to off-set the damage the Fed is doing to risk-on assets such as the crypto market. Considering BTC tends to be somewhat of a liquidity sponge, it tends to outperform other assets when there is a boost in liquidity. However, the jury is still out on whether BTC's performance indicates the end of the bear market for crypto or a temporary outlier. Despite BTC's recent outperformance, it's still catching up to significant rallies in other markets between Q4 2022 and Q1 2023. An important note is that the S&P 500 has never seen a bear market bottom before the unemployment rate began to rise, and this is yet to be the case. Furthermore, the yield curve is currently the most deeply inverted it has been since the 1980s, ultimately signalling that long-term interest rates are lower than short-term interest rates. An inverted yield curve has been a perfect predictor of the last seven recessions since 1960, ultimately implying that it's likely the market isn't out of the woods yet. When yields and risk assets diverge, historical patterns suggest that other assets quickly catch up to the sell-off. Although yields have moved exponentially since last month's CPI data, markets expect them to stabilize at last year's high levels. It would likely take very hot inflation data and a significant rate hike following the next FOMC meeting on the 22nd of March to trigger the next leg lower for risk assets. Until then, BTC is expected to continue ranging, waiting for its next cue. In other news, a recent article by Forbes threw Binance into the fire after they released an alleged hit piece on the exchange and its founder, Changpeng Zhao (CZ). The article drew parallels between the exchange and the now-defunct FTX after Binance allegedly transferred $1.8 billion to hedge funds such as Tron, Amber Group and Alameda Research between August and December 2022. However, CZ then hit back at this, arguing that the article referred to some old transactions from Binance's clients. He then reiterated that the exchange always holds user funds 1:1 and that this can be referenced through Binance's proof-of-reserve system. From a technical perspective, it is clear from the weekly chart that Bitcoin has been trading between two significant demand and supply zones. The bulls will be hoping for a weekly close above the $25,000 supply zone, which would light the way towards the massive $28,800 to $30,000 resistance, the Head and Shoulders neckline. An important contributor to the bullish scenario is that EMA20 and EMA200 are beginning to converge, with a potential cross in the coming weeks. The importance of this should be considered, as EMA20 crossing below EMA200 back in September accurately predicted short-term market direction. Bears will rejoice at the fact that many traders believe that a final Elliot Wave 5 sell-off is to come. This would likely result in a break below the $15,500 - $16,500 November market bottom. As we advance, all eyes will be on the CPI data releases. U.S. CPI data on the 14th will likely dictate the outcome of the rate decision of the FOMC on the 22nd. Volatility will be high around these dates, so caution should certainly be exercised, especially in leveraged positions.
by Coinrule
2
EUR/USD dips as eurozone inflation easesThe euro remains busy and is down 0.40% on Thursday, trading at 1.0624. This follows the euro gaining 0.90% a day earlier. The euro's moves today and yesterday have in large part been dictated by inflation releases. Earlier today, Eurozone Final CPI came in at 8.6% for January, down sharply from 9.2% in December. Headline inflation eased for a third straight month, after hitting a peak of 10.6% in October. The core rate has not followed this downward trend and ticked higher to 5.3% y/y in January, up from 5.2% in December. The improvement in headline inflation eased worries that the ECB would have to deliver another 50-basis point hike in May, after the expected 50-bp increase at the March 16 meeting. These concerns that the ECB would remain aggressive pushed the euro almost 1% higher on Wednesday after German inflation edged up to 9.3% in February, up from 9.2% in January and above the estimate of 9.0%. The usual suspects were at play in driving inflation higher - food and energy. The government has provided energy subsidies, but energy prices still shot up in January by 23.1% y/y, while food prices surged 20.2% in January y/y. In addition to the German inflation report, France and Spain also recorded unexpectedly strong inflation. The eurozone data calendar will wrap up with German and eurozone Service PMIs, which have been showing improvement and are back in expansion territory, an indication of a pickup in economic activity. The German PMI is expected at 51.3 and the eurozone PMI at 52.3 points. In the US, the Federal Reserve remains hawkish with its message that higher rates are on the way. Fed member Bostic reiterated this stance, saying that the terminal rate would be between 5% and 5.25% and have to remain at that level well into 2024. The markets have priced in a terminal rate of 5.50%, but worries over sticky inflation have led to some calls for rates to rise as high as 6%. EUR/USD is testing support at 1.0655. Below, there is support at 1.0596 There is resistance at 1.0765 and 1.0894
by OANDA
5
EUR/USD Advances Towards 1.0700 After German Inflation Data The EUR/USD pair was boosted on Wednesday and advanced to fresh weekly highs following the release of higher-than-expected German inflation data. The pair's advance has also been underpinned by the rise in the German 10-year Bund yield, which reached the highest level in 12 years at 2.724%. At the time of writing, the EUR/USD pair is trading at the 1.0670 zone, recording a 0.94% daily gain, having printed a one-week high of 1.0691. Data released on Wednesday showed that the German annual rate of inflation, measured by the Harmonised Index of Consumer Prices (HICP), rose to 9.3% in February from 9.2% in January, surpassing the market's consensus of 9%. The euro has strengthened amid expectations the European Central Bank (ECB) will continue tightening its monetary policy and raising interest rates longer than previously estimated. Recent inflation reports from Spain, France, and Germany support that case. Furthermore, Bank of France Governor Francois Villeroy de Galhau said on Wednesday it is desirable reaching the terminal rate by September at the latest. Investors are betting on a 50 bps hike by the ECB in March, while the terminal deposit facility rate is now forecasted at 4% from 3.5% previously (currently at 2.5%). EURUSD Daily Chart From a technical perspective, the EUR/USD maintains a slightly bearish short-term bias, although indicators on the daily chart are improving, hinting at a steeper upwards correction. The pair is facing immediate resistance at the 20-day SMA at around 1.0690, and if broken, could pave the way to the next bullish target at the 1.0760 zone. On the other hand, the loss of the weekly lows at 1.0535 would worsen the short-term setup risking a retest of the 1.0500 psychological level and the 100-day SMA at 1.0473.
by Alex_Boltyan_FXAnalyst
A brief history of DXY and the RSIThere are just some of the Key points on the chart but the real trick is to watch the RSI here ( the blue line above the US inflation index at bottom of chart) The US inflation indicator shows RED after 1995, when inflation is above the 2% dictated by the FED as Good. Inflation peaks are marked on chart with thin solid vertical lines. Compre these to RSI and PA levels The USA was in an inflation explosion from 1979 to 1984 and it reached a height of 14% before turning down The Thing to note here is the value of the $, as inflation rises, so does the value of the $, logically I suppose. As inflation is fought with higher interest rates ,the $ becomes a money earner, for the banking industry and savers Look at the RSI, See how it rises, Ranges and then eventually dips Then RSI Ranges, as does the $ till we get to July 1995 and the Barings banks Saga. This was a banking collapse and yet, Look. the $ GAINS value and RSI drives higher, Tops out and Drops, Then again in 2008, another banking crash, this time Leman Brothers cause a Loan repayment Surge, bit like a bank run Again, at a time of Stress, the $ Pushes up in value, RSI Runs high and Tops Since then, RSI has remained mid / high and topped out again in July 2022 Since then, it has retraced and has recently tried turning again But now, the $ has less demand globally as Countries around the world Stop using the $ as international trading currency, including Oil So the question is, Where for the $ now Technically, It has been up in the higher range RSI for a long time, inflation is High and as we can see from the past, PA tends to drop
TVC:DXY
by Orriginal
Short eurusdHello everyone I have shorted eurusd and added to my pos after the CPI data. I know the market is a bit in limbo and does not know what to do with the info because the report gave something for the bulls and bears but i think we are heading towards 1.05300 area. I have two trades that work here. This -> snipboard.io and another one taken all the way from the top that was opened on 2nd of February all the way from 1.010 area. See screenshot here ->https://snipboard.io/4oamvg.jpg .If you follow me these are the types of trades that we are taking. I am aiming for high quality trades that provide enough R's. If we are trending in one direction i usually add to my main pos and then cut making smaller profits. Stay safe and trade accordingly because these are very volatile markets with big swings on each side. Have a great day!
Short
by Inorogu
1