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USD (US Dollar)

aFew Trendline basics ♧"A overview in the definition and importance of using trendlines , consolidation and breakouts in trading" -Understand the basics of drawing trendlines, identifying consolidation and support and resistance levels. Get familiar with connecting highs and lows and forming a trendline or reconize consolidation. -Run with the runners by understanding market momentum. Identify runners and follow their trend and use other tools for identifying presure on the runners (such as RSI4) and manage the risk while trading in profit. -Trading the reversal of the breakout as a cycle and understand the breakout and its significant counter value. Identify the breakout and entry points. Recognize the signs of a reversal and exit the position to trade the reversal to the breakout. In this lecture, i hope to cover the basics of drawing trendlines, how to identify runners and trade with them, and how to trade the reversal of the breakout as a cycle. By the end of the lecture, you should have a solid understanding of how to use trendlines to your advantage in your trading strategy. " Trendlines are lines drawn on a chart that connect two or more price points, used to identify trends and potential trading opportunities. Knowing these basics of drawing trendlines, identifying runners, and trading the reversal of the breakout can be a powerful tool when traders look to identify trends and determine entrys & exits points and potential trading opportunities." There are three types of trendlines: uptrend, downtrend, and horizontal (or sideways) trendlines. - Uptrend lines connect 2 a 3 higher bulls (uprising bars), - Downtrend lines connect 2 or 3 lower bears (downsetting bars) - High & Lows trendlines connect high with hights and Low with lows - Horizontal trendlines occur when the price remains relatively flat. • Drawing the trendline and understand the basic is by identifying at least two points on a chart and draw a line that connects them. The line should be drawn along the slope of the trend, either up or down. • Highs and lows trendlines are realized by connecting highs with highs and lows with lows. You should draw a line that runs along the top of the highs. When connecting lows, you should draw a line that runs along the bottom of the lows. • Support levels are price points where demand for an asset (EURUSD) is strong enough to prevent the price from falling further, while Resistance levels are price points where supply is strong enough to prevent the price from rising further. Run with the runners and understand the market momentum. Market momentum is the strength of the current trend in a market and the momentum can be positive (upward trend) or negative (downward trend). Runners are assets with strong positive or negative momentum trends. Traders can identify runners by looking for assets with strong upward price movement, high trading volume, and positive news or market hype. Tools for identifying runners are the use of technical analysis tools such as moving averages, relative strength index (RSI4), and trendlines. Managing risk while trading with runners is the way traders gain profit. Stop-loss orders should be set and avoid trading with too much leverage is necesary to manage risk while trading with runners. Trade the reversal of the breakout as cylce. Understand the breakout and its significance when they occure as an asset's price moves beyond a key support or resistance level, indicating a potential trend reversal and identify potential breakouts and entry points by the use of trendlines and technical analysis indicators to take entrys and exits. Recognizing the signs of a reversal as they occur when an asset's price movement changes direction, signaling a change in trend. Signs of a reversal may include a change in momentum, a break in a trendline, or negative news or market sentiment. Exit the trend for trading the reversal of the breakout should be accomlplished throught soul desire, set profit targets and or the use of a trailing stop-loss orders to manage the risk or take profit while trading the reversal of a breakout. "Support and Resistance & Consolidation" A consolidation occurs when the price of an asset moves within a range, between a defined level of support and resistance. Consolidations can provide traders with opportunities to identify potential breakouts and to trade with runners as they move the price towards the breakout level. Support levels are price points where demand for an asset is strong enough to prevent the price from falling further, while Resistance levels are price points where supply is strong enough to prevent the price from rising further. "Trendlines can be drawn to connect the highs and lows of the price movement during the consolidation period. These will form the upper and lower boundaries of the consolidation range." "Technical analysis tools such as Bollinger Bands, RSI, and Moving Averages can be used to confirm the consolidation and identify potential breakout levels." During consolidations, runners can be identified by looking for assets with a consistent pattern of higher lows or higher highs. Traders can buy when the price is moving towards the resistance level and sell when the price is moving towards the support level. You should set stop-loss orders and avoid trading with too much leverage to manage risk while trading in consodilations ranges. Potential breakout levels can be identified by looking for price movements that break through the upper or lower boundaries of the consolidation range. Traders can enter a long or short position once the price breaks out of the consolidation range. Stop-loss orders can be placed below the support level for a long position or above the resistance level for a short position. Managing risk while trading the breakout is through a set profit targets and or use of trailing stop-loss orders to manage risk when trading the breakout as breakouts are reasons why traders intent to spot and run with runners , without jumping the gun. "Recap the lecture by knowing the basics of drawing trendlines, identifying runners, and trading the reversal of the breakout." The basics of identifying consolidations, trading with runners during, the 3 trends, consolidations and trading the breakout ..all may provide traders with opportunities to identify potential profitable Forex trades and trade with runners as they move the price more than often. "Traders use it as a powerful tool to identify trends and potential trendline breakout trading opportunities!" • HappyForexTradingJournal J
Education
by ATU_TAD
Q. Why when the FED raises interest rates does the rand weaken?A. Whenever you think about a country raising interest rates, we need to consider what happens to investors and where they are more likely to deposit their money. So, as we are expecting an increase in interest rates this month from the FED, there are a few reasons why we can expect the rand to weaken further: Here are three to consider… Reason #1: Investors flock to the US Dollar When the US Federal Reserve raises interest rates, it becomes more attractive for investors to hold or buy US-dollar denominated assets. That’s because they know they’ll receive a higher rate when they invest in it. This will also lead to a rise in the US dollar and a drop in smaller currencies (like the rand). Reason #2: US Dollar is still the fat cat of reserve currencies A rise in US interest rates may lead to higher borrowing costs globally. This is because the US dollar is still the world's primary reserve currency. When we think of gold, Bitcoin and other precious metals, we think of how it’s priced in US dollars. The problem with this, is that emerging market countries, like South Africa, will face higher debt-servicing costs as the US interest rates continue to move up. And this could continue to put pressure on their economies which will lead to a depreciation in the rand. Reason #3: South Africa is still a big exporter Also, South Africa remains one of the major exporters of commodities. And the value of the rand is linked to fluctuations in commodity prices. So, when US interest rates rise, this leads to a stronger US dollar. And can cause commodity prices to drop (as they are generally priced in US dollars). As South Africa is a major commodity exporter, the lower commodity prices would have a negative impact in SA’s export revenue – which can in turn weaken the rand further.
Education
by Timonrosso
1
PMI Data & How it Effects DXYJust to summarise quickly what the ‘Purchasing Manager Index’ is, it’s a monthly data release by the ISM. PMI data is based on 5 survey areas: new orders, inventory levels, production, supplier delivery & employment. PMI data ranges from 0-100. A PMI reading ABOVE 50 represents expansion in the economy. Whereas, a reading BELOW 50 represents contraction. Below is the PMI data for March 2023, which came in at 47.7 which shows the economy is contracting. Now to show the importance of this, let me show you the last few times the PMI dropped below 50👇🏻 2008 - The Financial Market Crash🩸 Early 1980’s - Sky High Inflation🩸 Mid 1980’s - Recession which left unemployment at 7.5%. The recession was caused by tight monetary policy from the government , in an ‘effort’ to fight high inflation🩸
TVC:DXYEducation
by BA_Investments
What exactly is FOMC? What is FOMC, and what does it do? FOMC stands for Federal Open Market Committee. It's a group of people who work for the US government and makes decisions about the country's money. They decide how much money should be in circulation and how much it should cost to borrow money. How does FOMC affect the forex market? FOMC's decisions can affect the forex market because they can change the value of the US dollar compared to other currencies. For example, suppose FOMC raises interest rates. In that case, it can make the US dollar more attractive than other currencies, increasing the exchange rate. If they lower interest rates, it can make the US dollar less attractive, which can decrease the exchange rate. What is the FOMC statement, and why is it essential for the forex market? The FOMC statement is a document that FOMC releases after each meeting. It explains what the FOMC members talked about and what they decided to do with interest rates and the economy. This statement is essential for the forex market because it helps investors and traders decide what to do with their money. They might buy or sell different currencies based on the FOMC statement. How does FOMC affect currency exchange rates? FOMC can affect currency exchange rates by changing the value of the US dollar compared to other currencies. If FOMC raises interest rates, it can make the US dollar more attractive than other currencies, increasing the exchange rate. If they lower interest rates, it can make the US dollar less attractive, which can decrease the exchange rate. Why do traders pay attention to FOMC meetings? Traders pay attention to FOMC meetings and the FOMC statement because it can give them an idea of what might happen to the US dollar and other currencies. They might make trades based on what they think will happen after the FOMC meeting. For example, if they believe the FOMC will raise interest rates, they might buy US dollars because they think the exchange rate will increase. NOT FINANCIAL ADVICE DISCLAIMER The trading related ideas posted by OlympusLabs are for educational and informational purposes only and should not be considered as financial advice. Trading in financial markets involves a high degree of risk, and individuals should carefully consider their investment objectives, financial situation, and risk tolerance before making any trading decisions based on our ideas. We are not a licensed financial advisor or professional, and the information we are providing is based on our personal experience and research. We make no guarantees or promises regarding the accuracy, completeness, or reliability of the information provided, and users should do their own research and analysis before making any trades. Users should be aware that trading involves significant risk, and there is no guarantee of profit. Any trading strategy may result in losses, and individuals should be prepared to accept those risks. OlympusLabs and its affiliates are not responsible for any losses or damages that may result from the use of our trading related ideas or the information provided on our platform. Users should seek the advice of a licensed financial advisor or professional if they have any doubts or concerns about their investment strategies.
TVC:DXYEducation
by OlympusLab
SMART MONEY CONCEPTS #1: LIQUIDITY THEORYHi everyone! As you all should know by now, I mainly use smart-money concepts to enter into my trades. Today I will be talking about the concept of liquidity and how to capitalise on it. Looking at the graph, there are 4 main types of liquidity that I use and as stated in the chart, I will normally look for entries off the liquidity grab zones or liquidity hotspots as I would describe. Make sure to backtest and forward test into your chart data to identify which type of liquidity are the most prevalent. There are many many different forms to liquidity zones and knowing when a liquidity grab occur can be a very profitable strategy.
OANDA:XAUUSDEducation
by Jon_Jones_Junior
3
Trading EUR/USD with Moving Averages and Price ActionA simple way to trade EUR/USD is by taking advantage of its tendency to retest the 200-period moving average on the hourly chart. To do this, wait for the currency pair to move away significantly from the 200-period moving average and show signs of overbought or oversold conditions with two peaks or troughs, along with divergence. This presents an opportunity to enter a trade in the direction of the moving average. To execute this strategy, first, identify the 200-period moving average on the hourly chart of the EUR/USD pair. Next, monitor the price action to look for significant deviations from the moving average with clear signs of overbought or oversold conditions. This may include the formation of two peaks or troughs with divergence in the price action. Once you have identified these conditions, consider entering a trade in the direction of the moving average. For instance, if the price is significantly above the moving average and shows signs of overbought conditions, consider entering a short trade. On the other hand, if the price is significantly below the moving average and shows signs of oversold conditions, consider entering a long trade. In summary, this strategy involves identifying overbought or oversold conditions in the EUR/USD pair, along with divergence and two peaks or troughs, as it moves away from the 200-period moving average. This can help you identify trading opportunities in the direction of the moving average. ----------------------------------------------- Share your feedback in the comments and demonstrate your support by liking the tutorial. Please follow if you're interested in more tutorials like this. Your support is highly valued!
Education
by Candlestick_OB
2
Rates Obsession - a pro interest rates set-up on TradingView Interest rate pricing has a huge effect across many financial markets at present – the correlation between short-term rates, rates volatility and the USD is certainly evident. However, with such a big window for increased volatility in interest rates pricing, as traders try and price the prospect of a 25bp or 50bp hike at the 22 March FOMC, as well as peak fed funds pricing, could increased pricing result in a big move in the USD and NAS100? In the video, we look at how we can look at the fed funds curve and understand ‘what is priced in’ – we look at how to measure the degree of cuts priced in for a specific period of time, and how to look at implied volatility in bond markets – and, why it is important for FX and index traders? Interest rates and short-term US Treasury bonds are the first derivative and so many markets take their direction from these inputs - hopefully, this gives some understanding of how you can use TradingView more effectively to assess these inputs.
TVC:US05YEducation
by Pepperstone
4
A Simple but Effective USDTRY Trading StrategyThe USDTRY pair tends to be extremely volatile, and hence it brings many scalping opportunities. On the sell side, and on the hourly chart, you need to keep an eye on EMA-200, EMA-25, trading volume, its MA, and a few important points of time during the day. Zoom into the chart. By 7:00 AM UTC (sometimes 8:00 AM), a significant trading volume spike above its MA line usually occurs and is followed by consolidation above the EMA-25 ahead of breaching it. By breaching the EMA-25, USDTRY usually breaks significantly below the EMA-200. A trader may enter a sell position as the USDTRY breaches the EMA-25 and close their position after nearly 4,000 ticks below the closing price of the 7:00 AM candle. On the buy side, the move tends to be much faster. After that long bearish candle that breaks below the EMA-200, a long bullish candle usually forms with an opening price that is nearly identical to the closing price of that bearish candle. This bullish candle usually forms between 21:00-23:00. This move usually targets the EMA-25, about 4,000-8,000 ticks above the opening price of the bullish candle. These strategies above seem to be intuitive for many traders. However, the previous patterns are usually followed by a significant amount of volatility. So, prudent risk management must be taken into account. I would appreciate your opinion and I would be very thankful if you can cheer my account up a little :)
Education
by SamerHa
3
January EffectHello guys! Have you ever heard of the "January effect"? It's a pattern that has been observed in financial markets where the prices of small cap stocks tend to go up in the month of January. Some people think this happens because of tax-loss selling (when investors sell stocks that aren't doing well in order to reduce their tax burden) or because more people are interested in buying small cap stocks at the start of a new year. It's important to remember that the January effect isn't a sure thing and shouldn't be the only reason you make investment decisions. What do you think about this effect?
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BLACKBULL:US30Education
by m_maia14
10
The Best Time to Buy an AssetThe passing of time often creates one of two things. It can create Wealth or it can create Regret. For instance… Many people will say, I wish I bought real estate, crypto, stocks, etc. at certain times…then I’d be rich. We are all pretty good at looking backward and saying, “What if?”. With Investing, the two most common reasons people miss opportunities are because they aren’t paying attention or aren’t prepared…and usually, it’s both. The best thing to do is: 📌 Get Educated with proper knowledge 📌 Analyze different factors and Research on them 📌 Create a plan/strategy and start working on it
Education
by FortuneAI
WHAT IS A PIP AND HOW TO MEASURE IT?WHAT IS A PIP? The pips is the unit with which we measure the price movement of a pair. Example: If the USD/MXN pair is used. If the dollar is worth 20.7 and rises to 20.8, it is said to rise to 1 cent but in FOREX it is not measured with cents, it is measured with pips. The price of the USD/MXN chart has 3 extra decimal places 20.8 000 those 3 extra decimal places are what the pips are measured with: the pip is the fourth number after the point . If the price changes from 20.8100 to 20.80101 the price moves 1 pips, if the price moves from 20.80100 to 20.80110 the price moves 10 pips and if the price moves from 20.80100 to 20.80300 the price moves 200 pips. Pips are calculated differently depending on the pair, pairs with Japanese YEN and pairs WITHOUT Japanese YEN PAIRS WITH YEN
Education
by Ed_Ale
2
Golden Advice from Takashi Kotegawa🎥Takashi Kotegawa turned around $12K to $200M in just 8 years and reached a net worth of a whopping $ 1.8B from trading in his bedroom🍻 When I met Stocks Genius Takashi a few years ago, he gave me one of the best trading advice👇🏻 Trade with small size while learning Only risk 1% of your account size each trade Master one setup Find a solid mentor Journal your trades and study your data Follow your plan consistently regardless of the outcome Take Trading decisions as unemotionally as possible Focus on these points, instead of focusing on goals like: I want to make 5K or 10K a month🍻
Education
by FortuneAI
Fall of USD as Global Reserve CurrencyIf you give someone a button to print money, they will press it 1,400 years ago the Roman republic inflated its currency until its empire collapsed USD used to be backed by gold, but that ended in 1971 This allowed governments to print endless money Hyperinflation is just a matter of time The US government learned to overspend and print the difference The debt is now $31 trillion and $100 trillion in liabilities The only way out is printing more money But destroying the savings and hard-earned tax money of citizens Global reserve currencies change every 90 years So, Monetary Switch is inevitable Checkout Venezuela's 2013- mid-2020 Inflation data The paper that is used to print a dollar is not actually worth a dollar. The paper does not have value, it simply represents the value. It is not money because it holds no individual value. To take it a step further, dollars are actually the OPPOSITE of value. Dollars are debt. A dollar is a PROMISE to pay back debt. The U.S. is over a trillion dollars in debt. A trillion is “1” followed by 12 zeros. It’s a thousand billion. A trillion seconds is 32,000 years. A stack of $1 bills would be 68,000 miles high. So how do we pay back such monumental debt? Taxes. It’s painful, but it’s obvious. So, the dollar is the PROMISE of the U.S. government to pay back over a trillion dollars of debt by taxing its citizens. And, to kick you while you are down, the debt is still growing. The dollar is actually debt. That is why the smart rich don’t work for dollars, they work for assets like BTC and GOLD Thank You for Reading. Like and Share!
Education
by FortuneAI
2
InvestMate|December the worst month for bulls on the US dollar🐻December statistically the weakest month for the US Dollar, a statistic since 2000 against the EUR/USD. Relative to statistics, December is the month in which EUR/USD gains the most. The average EUR/USD increase for the month is over 1.58%. This year there is a really good chance that the rule could be confirmed. December statistically the weakest month for the US Dollar, a statistic since 2000 against the EUR/USD. Relative to statistics, December is the month in which EUR/USD gains the most. The average EUR/USD increase for the month is over 1.5% This year there is a really good chance that the rule could be confirmed Historically, the increases have been: 2000: +8% 2001: -0.37% 2002: +5.59% 2003: +5.04% 2004: +1.91% 2005: +0.44% 2006: -0.3% 2007: -0.3% 2008: +9.75% 2009: -4.48% 2010: +3.15% 2011: -3.62% 2012: +1.54% 2013: +1.43% 2014: -2.93% 2015: +2.84% 2016: -0.66% 2017: +0.85% 2018: +0.84% 2019: +1.8% 2020: +2.45% 2021: +0.4% 2022: ? Average: +1.589% 🚀If you appreciate my work and effort put into this post then I encourage you to leave a like and give a follow on my profile.🚀
Education
by InvestMate
1
The USD 'smile' model - explaining the USD rallyWhen we think of the USD, and what drives capital, the USD ‘smile’ theory is an interesting and logical model to conceptualise the fundamental drivers of price action. The basic principle is we can think more strategically about the regime that drives the USD, and this has consequences for price, and by extension commodities and other second-order derivatives of the USD. • Left-hand side – the focus here is risk aversion across broad financial markets – this could be driven by several factors, including an increased recession risk and geopolitics – but increased market stress and the USD will typically attract buyers. Conversely, a risk rally will see capital flow out of the USD • Right-hand side – the US exceptionalism story – in some capacity the idea of TINA rings true here – that being, ‘There is No Alternative - where investors see the US as having the most resilient economy and considered to be the most attractive investment destination • The middle section sets a focus on a regime of synchronized global growth/contraction – essentially in a synchronized global growth upturn, perhaps with rising liquidity, we typically see bearish trends in the USD and clear outperformance in cyclical currencies, such as the AUD, NZD, and NOK USD drivers into October ‘22 As we see on the daily, the USD rallied throughout 2022 peaking in September and October, with both the left- and right-hand sides of the ‘Smile’ working concurrently for the USD. This is a rarity, but can be a potent force, especially given this time around we went through a regime shift from zero interest rates and QE to rapid rate hikes. A deeper dive as to the left-hand drivers, we saw fears of a global slowdown and economic contraction driving capital into the safety of the USD – Looking at correlation analysis, we see the USD has been unequivocally negatively correlated with the S&P500, providing a strong and unrivalled hedge against equity drawdown – the fact that cash-like assets (I’ve used 1-month swaps) in the US pay some of the highest rates meant traders achieved compelling levels of ‘carry’ or income – in effect, funds are still paid to play defence. On the right-hand side, fears of a deeper economic contraction in China, Europe, and the UK, certainly on a relative basis, again saw the USD outperform. We can also see that while inflation rose aggressively in most DM countries, we also seen dovish pivots from the BoE, ECB, and RBA, and yet the Fed have kept a consistent tone – well, at least Jay Powell has. A USD decline After the US CPI report (10 Nov) we saw the USD take a dive, stopping just shy of the 200-day MA – on one hand, the right side of the ‘Smile’ becoming less USD positive – where rate hikes were priced out and the terminal expectation of the fed funds rate fell to 4.87% (from north of 5%). We can also see the mid-part of the ‘Smile’ worked against the USD - We saw China looking less bad, with its plans to allow property developers easier access to capital, amid a multi-step guide to unwind its Covid zero policy, presumably after the ‘Two Sessions’ sitting in March 2023. There has been a less bad feel towards Europe, with EU Nat Gas prices falling from €342 to €100 – EU data, more broadly, held up and Italian BTP spreads were contained vs German bunds. A USD turn – but can it last? Since the lows in the USD (I’ve used the USD index / USDX as my proxy) on 15 Nov we’ve seen a reasonable counter-rally back above 107 – the technicians will argue the USD was oversold and due a bounce anyhow. However, if we think about the news flow and how it relates to the ‘smile’ theory, we’ve seen the emergence of increased uncertainty on China’s Covid plans – Korean 20-day exports fell 16.7%, while Taiwanese exports fell 6.3% YoY. Crude and copper have shown us the way, but traders are expressing a view of a global growth slowdown, which of course favours USD strength. The news flows may change as we head into what will be a big December by way of event risk– bad US data will impact the right-hand side of the smile and weaken the USD, especially if the US labour market shows real signs of cooling and core CPI undershoots again. Should US data hold up, but Chinese and EU data deteriorates, well that’s USD positive, especially if we see an equity drawdown. I’ve not seen a momentum USD buy signal on the longer-time frames yet – however, with terminal fed funds pricing above 5%, which we consider that to be fair, it feels like global growth is probably the factor that will drive the USD into year-end. The smile could be a good guide to think about the USD direction.
PEPPERSTONE:USDXEducation
by Pepperstone
Educational Series - Smart Money Concepts ( Liquidity )Hi there guys! I will be doing a short tutorial on Smart Money Concept's liquidity. What is it? - Liquidity acts as a driver to move the market in a specific price range. - We can find liquidity in areas where many people place stop losses and buy/sell stops. - Market makers will manipulate the price in order to break through these obvious zones and seize the liquidity. How to look for them - You will be looking for areas where price are of relative equal highs/lows. - Areas where price has not gone to swept the "stop losses" Why is it useful? - Helps to forecast where price might potentially head to - Potential areas for take profits upon clearing of liquidity - Avoid placing your stop loss at liquidity areas It takes some time to learn how to spot liquidity. If you do enjoy this tutorial, feel free to follow me and boost this post! :) Regards, Chen Yongjin
OANDA:XAUUSDEducation
by DogeStonks
4
November FOMC preview – where the risk to markets resides Time – 3 Nov 5am AEDT / 6PM GMT (Jay Powell speaks at 05:30 AEDT) Central bank meetings are just so important to sentiment and market structure – when we’re trading a major market theme, such as inflation and rising interest rates, this is the market’s chance to mark-to-market policy changes and how the collective in the bank guide our expectations for future meetings ahead. For traders, notably for those who have exposures sensitive to policy changes, they simply must assess the potential for big volatility, which could affect their positions – our job is to recognise the propensity for sizeable movement, the skew in the outcome distribution and if our stop placement is too close/far from the market. Do we reduce, exit or in some cases even initiate positions? For others, the central bank meeting will shape the trading environment and the market structure they work in - not just for that trading session, but for the following days ahead. Consider day traders who work within a specific timeframe and need to assess if price action constitutes a trending day, and therefore they look more closely at momentum strategies. Or is it more of a choppy, sideways, range-bound day, and therefore looking more readily at intra-day mean reversion strategies? ‘Environment recognition’ is key for day traders and scalpers and edge comes from being able to identify the regime we’re in – perhaps through the application of market profile, VWAP, Bollinger Band strategies (to name a few), as well as good old fashion price action. An overview of the November FOMC meeting As we know event risk seldom gets more important than an FOMC meeting, so this is a risk we need to manage. Trading these tier 1 events takes skill like no other – we must react to the statement, but then 30 minutes later we react to individual words and nuance in the press conference from chair Jay Powell. It’s always the high frequency algo’s that recognise the keywords first and we mortals are left trying to react according. Even once the presser has finished and the dust has settled, quite often we see the ensuing Fed members speaking over the coming week giving their own personal view, and often when we’ve seen violent moves on the day, they will walk back any extreme reaction. The first move is not always the right move. To some, this lively backdrop, especially when we consider reduced liquidity can be nirvana-type conditions. To others, this is the environment where they have no edge and see it best to stand aside and let price do its thing. A hawkish ‘step down’ on the cards We’ve been treated to a roller coaster in Fed ‘pivot’ expectations - Ranging from a WSJ article of an impending ‘step down’ in the pace of hikes starting at the December meeting. To dovish turns from the RBA, ECB and BoC – however, the Fed are their own boss and they see US labour market data that has been solid (as donated by the Employment Cost Index and JOLTS report) – US 5-year inflation expectations are rising and next week’s US core CPI print will likely be close to unchanged at 6.6% YoY - it seems highly unlikely that the Fed will want to promote a positive reaction in risky assets, and the risks to markets in my mind are skewed to a hawkish reaction – equity up, bond yields and the USD lower. In the Fed’s view, putting the US into a recession is still a lesser evil than not tackling entrenched price pressures. While traders would fall off their chair if the Fed didn’t hike by 75bp at this meeting, it’s the guidance for future meetings which is where we get a reaction in markets. We are likely to hear that the pace of hikes in the future will fall to a more conventional pace – this is the ‘step down’ many have focused on. But this narrative will be accompanied by strong conditionality, and the statement will be about giving the Fed maximum flexibility and optionality for the December meeting – that call will be fully data-dependent. So, consider there is a lot of information between now and the 14 December FOMC meeting – we have 2 non-farm payrolls reports, the Oct CPI print (11 Oct) and the midterm elections. It’s no wonder the market is pricing 62bp of hikes for that meeting and hedging their bets of a 50 or 75bp hike – it's this pricing for the Dec FOMC meeting which I think is key for markets. Rates Review – we see market pricing for the Nov FOMC meeting at 75bp – then a step to 62bp in the Dec meeting. The holy trinity – the three markets to drive cross-asset volatility Pricing for the December FOMC meeting So part of the reaction will be seen in the pricing for the Dec FOMC meeting which currently sits at 4.41% – traders can see this on TradingView by typing ‘100-ZQF2023’ into the navigator. A dovish reaction would be to see this headed below 4.4%, where we would expect the USD to sell off and gold and equities to rally. A push towards 4.50% would see USDJPY push towards 150 and EURUSD through 0.9800. Terminal fed funds rates pricing We also look at the terminal rates pricing – this is the peak of market expectations for where the Fed can take rates, which currently sit in the May to June 2023 period at 5% – we can type in ‘100-ZQK2023’ into the navigator. A firm break above 5% would send risk lower. US 2-year Treasury I also look at US real rates and 2yr Treasuries (US02Y) closely as a driver for risk assets – If yields rise then we should see the NAS100 and gold fall and the USD spike, especially if we take out the 21 Oct high of 4.63% – conversely if yields fall/price rise then the USD will likely fall. As always around key events, the reaction in markets is a function of: • The outcome vs Expectations • Positioning • Hedging activity • Liquidity My own view is the risks are skewed for a hawkish reaction – USD higher, but I will recognise the moves in rates suggests the market is largely positioned for this outcome.
PEPPERSTONE:USDXEducation
by Pepperstone
2
GOVERNMENT BONDS YIELD. INVERTED CURVEWhat are GOVERNMENT BONDS YIELD? Bonds are Fixed Income instruments that allow investors to anticipate the flow of funds they will receive. What does an inverted yield curve mean? Put simply, this means that short-term US debt is more profitable than long-term debt. Economic theory says that in a “normal” situation, long-term lending should be more profitable than short-term lending. An inverted yield curve occurs when the yield on short-term bonds (US03MY, US06MY, US01Y) is greater than the yield on longer-term bonds (US30Y, US20Y) . This is bad for the economy and worse if it is the United States because it means that they are relying on the economy in the short term since the "normal" thing is that long-term bonds give better yields. Some economists and analysts see in this situation an indicator that a next economic crisis is coming, either in the form of a slowdown in GDP or even a recession.
TVC:US30YEducation
by Ed_Ale
📚Learn More💰Earn More - Inverse Head and Shoulders in UNIUSD📚 LEARN MORE 💰 EARN MORE Inverse Head and Shoulders Definition: A head and shoulders pattern is also a trend reversal formation. It is formed by a Valley (left shoulder), followed by a Lower Valley (head), and then another Higher Valley (right shoulder). A “Neckline” is drawn by connecting the highest points of the two Peaks. Neckline resistance does not need to be strictly horizontal. This illustrates that the downward trend is coming to an end. When a Head and Shoulders formation is seen in a downtrend, it signifies a major reversal. The pattern is confirmed once the price breaches the neckline resistance. In this example, we can easily see the head and shoulders pattern. How to Trade the Head and Shoulders Pattern: ENTRY: we put an entry order above the neckline. TARGET : We can also calculate a target by measuring the lowest point of the head to the neckline. This distance is approximately how far the price will move after it breaks the neckline. ❤️ If you find this helpful and want more FREE forecasts in TradingView . . . . . Please show your support back, . . . . . . . . Hit the 👍 LIKE button, . . . . . . . . . . Drop some feedback below in the comment! ❤️ Your Support is very much 🙏 appreciated!❤️ 💎 Want us to help you become a better Forex trader? Now, It's your turn! Be sure to leave a comment let us know how you see this opportunity and forecast. Trade well, ❤️ ForecastCity English Support Team ❤️
Education
by ForecastCity_World
2
Inflation & Interest Rate Series / Dollar and Gold I have started this inflation and interest rate series, in our last video, we discussed "Inverted Yield". Today will be discussing the relationship between: . Inflation . Interest rate . Dollar and . Gold Today's Content: • Why with higher interest rates, it strengthens the USD • Is USD the strongest currency? If not, then who? • Strategy to counter inflation • Interest rate higher, but a lower USD? Dollar Index: . Measure the value of the dollar against a basket of six foreign currencies. . These are: the Euro, Swiss franc, Japanese yen, Canadian dollar, British pound, and Swedish krona. . With the increase of money supply over the decades, it causes currencies dilution. When currencies weaken, inflation follows. COMEX Gold 0.1 = US$10 1.0 = US$100 10 points = US$1,000 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. Stay tuned for our next episode in this series, we will discuss more on the insight of inflation and rising interest rates. More importantly, how to use this knowledge, turning it to our advantage in these challenging times for all of us.
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ICEUS:DX1!Education
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