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Euro Ascendancy: Unveiling EURJPY's Resilience Post-TokyoEURJPY underwent a correction at the onset of the Tokyo trading session following the release of Japan's National Core CPI data on November 24, 2023. Despite the data indicating a slight increase from the projected 2.8% to 2.9%, it's crucial to note that this led to only a minor correction in this currency pair. This correction aligns with market movements typically associated with economic data announcements. Technical Analysis: The currency pair currently positions itself near a robust demand zone identified at the 163.720 level. This zone has demonstrated significant resilience in previous periods, creating opportunities for potential further strengthening. In the realm of technical analysis, the target for strengthening is set at the 167.660 level, reflecting the pivot point since August 2008. Supporting Factors: Euro Strength: Despite a minor correction, the Euro maintains its resilience. Fundamental factors, such as the conservative monetary policy of the ECB, provide robust support for the Euro, particularly after touching a strong demand zone. Japanese Inflation: Despite a modest increase in Japan's CPI by 0.1% since October 2023, this can be viewed as a relatively insignificant impact that merely resulted in a temporary correction, presenting opportunities for short-term strengthening. Historical Price Movement: Historical price movement analysis indicates that EURJPY has the potential to reach its highest level since August 2008. This is attributed to the high-interest-rate policy implemented by the ECB in recent times, acting as a catalyst for this strengthening. Notably, the Euro has shown a robust increase against the JPY since October 30, 2023, with a notable surge of 3.44% as of the time of writing. Risks and Considerations: It's imperative to remember that trading always involves risks, and market conditions can change rapidly. Risks associated with changes in ECB policies, Japanese economic data, or geopolitical factors should be vigilantly monitored. Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Trading decisions should be based on in-depth analysis and an understanding of associated risks. Trading always carries risks, and past performance does not guarantee future results.
Long
by fardycurry
2
USD/JPY Waiting for USD news!The USD/JPY pair recorded an increase near the 150.20 area, recovering some of the previous losses caused by weaker-than-expected US inflation data. However, the US dollar is near its lowest level since September, reflecting expectations that the Federal Reserve has concluded its tightening policy. The BoJ may delay a shift from accommodative monetary policies following the contraction of the Japanese economy. The daily trend is bearish, but the pair shows resilience above the psychological level of 150.00 and an ascending trendline. A downside break could lead to further declines towards 149.20-149.15, while an upside move may encounter resistance at 151.00, 151.20, and 151.90. The situation calls for caution before positioning for further gains or losses.
Short
by Forex48_TradingAcademy
9
US CPI UpdateUS CPI US Headline and Core CPI for October both came in lower than expected (decrease). US Headline CPI: YoY – Actual 3.24% / Exp. 3.3% / Prev. 3.7% (Green on cha rt) US Core CPI: YoY – Actual 4.02% / Exp. 4.2% / Prev. 4.13% (Blue on chart) The chart below illustrates the direction of the current YoY down trend for both Headline and Core CPI however we are still not at the historical moderate levels of inflation desired. You can see these moderate levels of inflation between 1 – 3% from 2002 – 2020 below. Nice to see the Core CPI come down, almost down, into the moderate historical averages PUKA
ECONOMICS:USIRYY
by PukaCharts
Japan Inflation Overview JAPAN CPI Japan Headline and Core CPI for Sept both came in lower than expected. Japan Headline CPI: YoY – Actual 3.0% / Exp. 3.2% / Prev. 3.2% (green on chart) Japan Core CPI: YoY – Actual 4.2% / Exp. 4.3% / Prev. 4.3% (blue on chart) The chart below illustrates that Core CPI appears to be plateauing with Headline CPI decreasing from 4.3% to 3% since Jan 2023. Similar to the Eurozone chart you can we are long way from the moderate levels of inflation between -1.5 – 1.5% from 2015 – 2020 below. Japan’s economy contracted by 2.1 per cent during the third quarter of 2023, following an expansion in the previous two quarters. Analysts fear the country might slip into a recession. The contraction was sparked by a combination of sticky core inflation holding close to its 4.2 – 4.3% ceiling since May 2023, the slowing of exports, and low pay rises that appear to have led to weak domestic consumption. “Given the absence of a growth engine it wouldn’t surprise me if the Japanese economy contracted again in the current quarter. The risk of Japan falling into recession cannot be ruled out.” - Takeshi Minami – Chief Economist Norinchuckin Research Institute
ECONOMICS:JPCCPI
by PukaCharts
Wholesale Inflation Posts Its Biggest Decline in Over Three YearA powerful one-two combination of data pointing to softening inflation is continuing to support investor sentiment and a strong equity rally with Producer Price data this morning showing weaker-than-expected price increases among wholesalers. The data follows yesterday’s release of the Consumer Price Index, which showed no m/m change. Stocks are also gaining additional support from data this morning depicting declining retail sales, which equity players are perceiving as disinflationary rather than contractionary. Markets are bifurcated today, however, with yields and the dollar higher, as bond and currency traders pare back some of yesterday’s bonanza. Consumers Rein in Spending The U.S. Commerce Department reported this morning that retail sales declined sharply in October, as consumer spending slowed from the third quarter’s blistering pace. The resumption of student loan repayments definitely had an adverse impact, as a portion of wages were allocated to debt service rather than consumption. Retail sales declined 0.1% month-over-month (m/m) in October, the first decline since March. October’s figure arrived better than the -0.3% projection, however, while slipping from September’s 0.9% growth rate. Retail sales excluding automobiles and excluding automobiles and gasoline rose 0.1% on both fronts, worse than the 0.8% figures from September. Sales Contraction is Broad Based Seven out of thirteen categories contracted during the period, with the following categories experiencing the noted m/m declines: Furniture showrooms, 2% Miscellaneous stores, 1.7% Automobile dealerships, 1% Sporting goods retailers, 0.8% Building materials shops, gasoline stations and general merchandise also had declines but of lesser degrees. Gains were led by health and personal retailers, with sales increasing 1.1%. Other categories produced the following increases: Grocery stores, 0.6% Electronics and appliances retailers, 0.6% Dining establishments, 0.3% Ecommerce, 0.2% The apparel category was flat. Wholesalers Hit with Price Declines Wholesale inflation cratered at its fastest rate since the depths of the pandemic in April 2020. October’s Producer Price Index (PPI) declined 0.5% m/m, less than projections of a 0.1% increase and September’s 0.4% growth rate. Core PPI, which excludes food and energy, was unchanged and weaker than the 0.3% estimated and the previous month’s 0.2%. On a year-over-year (y/y) basis, headline and core producer prices rose 1.3% and 2.4%, compared to the previous period’s 2.2% and 2.7%. Leading the wholesale price decline were a 6.5% drop in energy products, a 0.7% decline in trade services and a 0.2% contraction in food. Transportation and warehousing wholesale prices rose at a sharp 1.5% rate, meanwhile. Services overall came in unchanged m/m while goods excluding food and energy rose 0.1% during the period. Equities Gain, but Positive Sentiment Eases Optimism sparked by yesterday’s CPI and this morning’s PPI appears to be easing, with stocks off their highs of the day while yields and the dollar have given back a good chunk of Monday’s gains. Still, all major U.S. equity indices are higher, with the small-cap Russell 2000 leading, having gained 0.8% while the Nasdaq Composite, S&P 500 and Dow Jones Industrial indices are higher by 0.3%, 0.3% and 0.2%. Sectoral breadth remains impressive, with all sectors higher while the defensive health care and utilities sectors are 0.1% and 0.4% lower. Leading the sectors are materials and consumer staples, with each gaining 0.6% as technology looks tired from its recent monster run. Indeed, to secure more gains going forward, the market will need to broaden out and begin to exhibit momentum in cyclical and value stocks. The dollar and yields are higher, with the 2- and 10-year Treasury maturities up 8 and 10 basis points (bps) to 4.92% and 4.55% while the greenback’s index is up 22 bps to 104.30. The dollar is gaining relative to the euro, yen and pound sterling while it loses ground versus the franc, yuan and Aussie and Canadian dollars. Crude oil is down 1.3% or $1.02 to $77.14 per barrel in response to the Energy Information Administration reporting a 17-million-barrel inventory increase in the U.S. over two weeks. Buoyant supply, continued concerns about weakening demand and waning worries over a potential escalation of the Middle East crisis are weighing on the commodity’s price. Consumers Cut Spending and Seek Bargains Target’s third-quarter results illustrate how consumers are cutting back on discretionary purchases while results for TJX highlight how consumers are increasingly turning to off-price retailers for low-cost items. At Target, comparable sales, which is derived from stores operating for 12 months or more and online channels, fell 4.9% during the third quarter. It was the second-consecutive quarter of declining same-store sales. On a y/y basis, the company’s revenues dropped from $26.5 billion to $25.4 billion, a 4.3% contraction. The result, however, exceeded the $24.24 billion anticipated by the analyst consensus. On another positive note, the company’s earnings per share (EPS) of $2.10 exceeded the consensus expectation of $1.48 and increased from $1.54 in the year ago quarter. The quarter was impacted by Target aggressively discounting merchandise as it sought to reduce an inventory glut, a strong trend among retailers. Target also attributed its third-quarter earnings growth to improved sales of “high-frequency items” such as groceries and beauty items, the addition of a new line of trendy kitchenware, and other new items. Target also said it has continued to reduce its inventory which as of the end of the third quarter was down 14% y/y. TJX, which operates discount retailers T.J. Maxx, HomeGoods and Marshall’s, raised its full-year guidance and said its third-quarter results benefited from capturing market share as its off-price stores attracted cost-conscious consumers. The company expects to generate a full-year EPS of $3.71 to $3.74, up from its earlier guidance of $3.66 to $3.72. TJX expects same store sales to increase 4% to 5%, an increase from its earlier guidance of 3% to 4%. During the third quarter, its sales revenue of $13.27 billion jumped approximately 9% from the $12.17 billion generated by the company in the year-ago period. Analysts expected $13.09 billion. Its overall same-store sales, furthermore, climbed 6%. TJX also posted an EPS of $1.03, which climbed significantly from $0.91 in the year-ago period. The recent quarter EPS exceeded the analyst consensus expectation of $0.99. In addition to benefiting from shoppers seeking bargains, TJX is also benefiting from its suppliers having excess inventory. The company provides discount prices by acquiring surplus items that retailers are removing from their inventories. Washington Makes Progress of Avoiding Government Shutdown In Washington, the House of Representatives appears to have avoided a government shutdown by passing a plan that will extend government funding until early next year. The measure is expected to be approved by the Senate and was passed by the lower chamber even though, it delays political battles over spending for border security and the Ukraine-Russia War while failing to make budget cuts in other areas of government spending. The House Freedom Caucus opposed the continuing spending resolution because it doesn’t include budget cuts and address border issues. The Balancing Act Today’s weak economic data highlights an important consideration going forward. Is data decelerating slow enough to be supportive of a soft landing, or is activity falling sharply and more consistent with recessionary conditions? The question is of the essence for capital markets as we operate within late-cycle monetary policy tightening, the riskiest juncture. While the former case would be supportive of current earnings estimates, the latter case would certainly point to projections falling from the $240 expected in 2024 for the S&P 500.
SP:SPX
by IBKR
12
GBP/USD Pullback before of 1.27!On Tuesday, the GBP/USD experienced a significant surge following the release of a US inflation report, which increased the likelihood that the Federal Reserve has concluded its interest rate hikes. The US Bureau of Labor Statistics reported a more pronounced decrease in October's inflation than expected, with the Consumer Price Index (CPI) dropping to 3.2% annually from 3.7%, and the core CPI falling from 4.1% to 4%, missing estimates. These data triggered a dollar collapse, with the US Dollar Index falling over 1.40% to 104.13, and the yield on the US 10-year benchmark note dropping to 4.45%, a level last seen in September 2023. In the US, the Producer Price Index, Retail Sales, New York Fed Empire State Manufacturing Index, and Federal Reserve speakers are anticipated. Additionally, I note a price in supply zones in H4 and the break of some swing highs, suggesting a potential pullback before a continued bullish run towards 1.27. Comment and leave a like, greetings from Nicola, the CEO of Forex48 Trading Academy.
Short
by Forex48_TradingAcademy
7
SR3: Trading Opportunities in a Disrupted Treasury MarketCBOT: Three-MO SOFR Futures ( CME:SR31! ) Breaking News: The US Treasury bonds are risk-free No Longer ! Last Friday, top credit ratings agency Moody's lowered its credit outlook on the U.S. to "negative" from "stable", citing large fiscal deficits and a decline in debt affordability. It has so far maintained the AAA credit rating for U.S. sovereign bonds. This move follows a rating downgrade by Fitch, another major ratings agency. On August 1st this year, Fitch cut U.S. credit rating from AAA to AA+, a decision made following months of political brinkmanship around the U.S. debt ceiling. Going back, the S&P was the first credit agency to give Uncle Sam a bad grade. It cut the U.S. credit rating from AAA to AA+ in August 2011 and has maintained it ever since. U.S. credit rating is now lower than that of Australia, Canada, Denmark, Germany, Luxemburg, Netherlands, Norway, Singapore, Sweden, Switzerland, and the European Union. These countries all enjoy AAA ratings from the top-3 major ratings agencies. The risk-free assumption on US Treasury bonds has long been the foundation of the global credit market. It typically measures the riskiness of a debt issue by adding risk premium(s) on top of a risk-free interest rate, which by default is the Fed Funds rate. If the U.S. bonds are no longer deemed risk-free, should we change “the mother of all reference rates” with a new risk-free rate? It would be like cracking the foundation of the Empire State Building and will bring chaos to the $133-trillion global bond market. In my opinion, this Doomsday scenario is very unlikely to occur. ‘A revisit of the following high-profile credit market events helps us understand why. August 2011: the S&P downgraded U.S. credit rating On August 5, 2011, the S&P announced its decision to give its first-ever downgrade to U.S. sovereign debt, lowering the rating by one notch to "AA+", with a negative outlook. S&P was direct in its criticism of the governance and policy-making process, which took the U.S. to the brink of default as part of the 2011 U.S. debt-ceiling crisis. This unprecedented downgrade drew sharp criticism from the Obama administration and the U.S. Congress, but the S&P refused to budge. What did the investors think? • The 10-Year Note with a par value of 100 traded at around 130 before the downgrade. A month later, its price hardly moved. By year end 2011, the 10Y note rose to 132. • The 30-Year Bond was quoted at 136. It reached 145 by year end, up 6.6%. • Following the downgrade, the S&P 500 lost 7.6% in August. But it quickly rebounded. The S&P ended the year at 1,258, up 3.3% from before the downgrade. I rephrase a famous quote to explain what happened: “When the U.S. sneezes, the World catches a cold.” The U.S. downgrade created a bigger chao in global markets. Investors pulled money out of emerging markets, which were considered even riskier. They put money back in the U.S. stocks and bonds, which, ironically, are deemed safer. There has not been any long-term impact from the S&P downgrade, or from its decision to keep U.S. rating at the less-than-perfect rating: • The S&P settled at 4,415 last Friday, up 260% since the downgrade in 2011; • US GDP has grown from $15.6 trillion in 2011 to $25.5 trillion in 2022, up 63%; • In 2011, US national debt totaled $14.8 trillion, a level the S&P considered as “unsustainable”. It has now mushroomed to $33.7 trillion, up 128%. The U.S. government has not defaulted on any debt or missed any interest payment. August 2023: Fitch downgraded U.S. credit rating In a surprise move on August 1st, Fitch downgraded U.S. Treasuries to AA+ from AAA. The U.S. markets were already in decline following the July 25th Fed decision to raise interest rates by 25 bps to 5.25-5.50%. Markets were clearly driven by the Fed, and the Fitch downgrade was merely a footnote. • The 10-Year Note traded at around 112 at the time of the downgrade. It fell as much as 6% to 105. The 10Y note has recovered somewhat to 107 by Monday. • The 30-Year Bond was quoted at 136. It dipped to 108 (-20%) by October, and it’s now quoted at 113, a rebound of nearly 5%. • Following the July rate hike, the S&P 500 has dropped from 4,588 to 4,117, a sharp 10% drawdown. However, it has since staged ten winning streaks, pushing the index back to 4,415, an impressive 300-point rebound (+7.2%). November 2023: Moody’s lowered U.S. credit outlook Last Friday November 10th, Moody's kept U.S. credit rating at AAA, but lowered its outlook to "negative" from "stable", citing large fiscal deficits and a decline in debt affordability. • The 10-Year Note ended the day at 4.646%, a modest gain of 0.016%. • The 30-Year Bond was settled 4.756%, down 0.011%. • The S&P 500 closed at 4,415, up 68 points or +1.6%. The U.S. hardly moved on Monday, as investors waited for the new inflation data. Today, the BLS reports that October CPI was unchanged from previous month, with the annual headline CPI dropping to 3.0%, below market expectations. The S&P pushed up 2% to reach 4,500 in morning trading. There you see how little the impact from a downgrade. Trading with CBOT SOFR Futures In “SOFR: Farewell to LIBOR”, published on July 3rd, I explained that the Securitized Overnight Funding Rate (SOFR) has already replaced the London Interbank Offering Rate (LIBOR) as the leading global credit market benchmark. If you are curious about what this means to you, check out your credit card agreement. You would find that the bank interest rate calculation usually consists of a “prime rate” and a markup, where the prime rate is defined as the sum of SOFR and a fixed rate. CBOT 3-Month SOFR Futures ( FWB:SR3 ) lists 40 quarterly contracts. It shows what the SOFR would be, quarter by quarter, ten years down to road. Based on Friday settlement prices and volume, here is the market consensus on SOFR through the end of 2024: • Current Fed Funds rate: 5.25-5.50% • December 2023 SOFR: 5.415%, volume: 265,153 • March 2024 SOFR: 5.350%, volume: 283,053 • June 2024 SOFR: 5.140%, volume: 324,902 • September 2024 SOFR: 4.880%, volume: 469,238 • December 2024: SOFR: 4.605%, volume: 402,005 SOFR futures are the most liquid futures contracts in the world. On Friday, 2,787,432 lots changed hands. Open interest was 10,655,832 contracts. The contracts showed here each traded over a quarter million lots in a single day. We could assume that market prices reflect best investor consensus on interest rate level at any given time in the future. Here are my observations: • The lead December contract is quoted at 5.415%, in line with the current Fed Funds range of 5.25-5.50%. It dropped to 5.3675% Tuesday after the CPI data. • The September 2024 quote of 4.635% on Tuesday, is 62-87 bps below range, indicating 2-3 rate cuts of 25 bps within the next ten months. • The December 2024 quote of 4.330% is 92-107 bps below range, indicating three to four rate cuts by the end of next year. In my opinion, the Fed decision, the Fed Chair statement and the latest data on payrolls and inflation, sent conflicting signals to the market, creating confusion among investors. Market prices are temporarily dislocated, which may present trading opportunities. The September 2024 quote indicates two or three rate cuts. I think that this assumption is too aggressive. The Fed, in both its statements and the Fed Chair public comments, repeatedly stressed that it never raised the issue of if or when to cut rates. If a trader holds the view that the September SOFR rate shall rise, he could express it with a short position in SOFR futures. The quoting convention of SOFR future is 100-R, where R is the effective interest rate. If the rate goes up, futures price will go down. SOFR contracts have a notional value of $2,500 x contract-grade IMM Index. Each 1 basis-point move would result in a gain or loss of $25 per contract. The minimum margins are $850 for the September contract. Hypothetically, if the trader is correct and the rates turn out to be 25 bps high, he would have a theoretical return of $625 per contract (= 25 X 25). The trader would lose money if the Fed cut rates faster than anticipated. 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 trading set-ups and express my market views. 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
CME:SR3Z2023Short
by JimHuangChicago
USD/CAD Ready for Reversal Towards 1.37.The USD/CAD rate is hovering around 1.3820 during the early European session on Tuesday, with buying interest, followed by the immediate resistance region around 1.3850, in line with the previous week's high at the 1.3854 level. The Moving Average Convergence Divergence line is situated above the centerline but shows convergence below the signal line, suggesting a potential shift in momentum towards bearish sentiment in the USD/CAD pair. Market participants are adopting a cautious stance ahead of U.S. inflation data; figures higher than expected could strengthen the U.S. Dollar (USD), and consequently, the USD/CAD pair may revisit the yearly high at the 1.3898 level. On the downside, the USD/CAD could find key support around the psychological level at 1.3800, followed by the 14-day Exponential Moving Average (EMA) at 1.3778. A decisive break below the latter could force the USD/CAD pair to navigate the region around the 23.6% Fibonacci retracement level at 1.3706, aligned with the significant level of 1.3700. It will be interesting to see the market's reaction to the dollar data in an hour. The market is in an uptrend channel and appears to have bounced off a daily supply zone. Stay tuned with us to follow developments. Happy trading to everyone from Nicola, the CEO of Forex48 Trading Academy.
Short
by Forex48_TradingAcademy
9
BTC - Macro View 🌐Hello TradingView Family / Fellow Traders, 📈 Following the rejection of the 25,000 support, BTC experienced a significant 50% surge , forming another bullish impulse that confirms the ongoing upward trend. Consequently, we've identified and outlined a rising channel in orange. BTC is currently approaching the upper boundary of the orange channel, coinciding with the 40,000 resistance zone. 🏹 To sustain bullish control and assert dominance from a macro perspective, a crucial requirement is a weekly candle close above 40,000. Such a development would likely lead to a parabolic movement, aiming for the 50,000 resistance level. 📉 Meanwhile , considering BTC's proximity to a formidable resistance zone, there remains a possibility of bearish intervention, potentially pushing it back into a range reminiscent of the 25,000 to 30,000 range. This scenario's confirmation would depend on lower timeframes, especially if a bearish reversal setup is triggered. 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Richard Nasr
by TheSignalyst
4
SPX And The CPI WeekThe S&P500 index SPX surged by +1.31% last week to close above 4400 resistance level. The index is showing that there's more potential is yet to come, to hit 4520 next. The week ahead: The meeting between US President Biden and China President Xi is the highlight; there is also US CPI and retail sales, the former being a key input into the Fed's policy deliberations; China activity data will also be released. Sectors that may witness higher volatility are; Big techs, EVs, Oil & Gas and Semiconductors stocks.
SP:SPXLong
by AlyaAkram
AUD matching the Dollar in strength The AUD was exceptionally strong today ahead of the CPI release in the early hours of Oct 25th. It is expected to have slowed to 5.3% from 6.0% in Q2 leading the futures marked to price in a 75% chance the RBA will hold rates at the Nov 7th meeting. Technically however there was a different pictures today, with the Pound and Euro falling 200 pips in the session on the back of a much stronger looking AUD than the macro would have you believe. As London comes to a close, I'm watching to see if 0.63500 will hold as support for price to build through New York and Asia. Having broken out of a 2 day range (0.63250) on Monday I'm looking to see if price can continue it's trajectory and start to turn around the Daily chart which has been bouncing on the lows since the start of the month.
Long
by RuckSack
TradePlus-Fx|GOLD: still shot💬 Description: And shorts of gold are still being considered. The approach to 1885 creates a promising short trade. However, today we expect inflation data, which may make some adjustments. In this case, one should not be afraid to re-enter, or one can consider entering using pending sell orders, placing them below and above the market price before the release of US CPI . The potential of the deal is good, and we expect a fall towards the level of 1830 and below. 🔔 FX CALENDAR TODAY 🔔 🛢IEA Monthly Report 🇪🇺ECB Publishes Account of Monetary Policy Meeting 🛢OPEC Monthly Report 🇺🇸Initial Jobless Claims 🇺🇸CPI 🛢Crude Oil Inventories 🇺🇸WASDE Report 🌎IMF Meetings ➖➖➖➖➖➖➖ 🚀Thank for your BOOSTS 🚀 👇Share your views and FOLLOW US 👇
OANDA:XAUUSDShort
by TradePlus-Fx
9