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Euro shrugs as Spain's inflation dropsIt's the last trading day of 2022, and EUR/USD is almost unchanged in what should be a quiet day in the currency markets. In the European session, EUR/USD is trading at 1.0674, up 0.13%. The week between Christmas and New Year's is usually very light on data, and there were no tier-1 events in Germany or the eurozone this week. Earlier today, Spain released the initial CPI estimate for December, which showed that inflation continues to weaken. CPI dropped to 5.8%, down from 6.8% and below the estimate of 6.0%. Inflation in Spain slowed for a fifth successive month, as energy costs keep coming down. Headline CPI is down sharply from a peak of 10.8% in July, but the news was not all positive, as core inflation rose to 6.9%, up from 6.3%. The Spanish inflation report kicks off a host of eurozone inflation releases next week. Investors will be hoping that the German and eurozone CPI data will mimic the Spanish release and point to inflation heading lower. The ECB will be keeping a close eye on these inflation reports, and the data will be an important factor in the ECB's decision as to the pace of future rate increases. The ECB delivered a 50-bp hike earlier this month, down from the 75-bp increase in October. ECB President Lagarde warned the markets not to view the move as a dovish pivot and said that more rate hikes were on the way. ECB Vice Vice-President Luis de Guindos reiterated Lagarde's hawkishness last week, saying that 50-bp rate hikes "may become the norm in the near future." 1.0660 is a weak support line. Below, there is support at 1.0616 There is resistance at 1.0702 and 1.0778
by OANDA
1
Euro higher as US jobless claims riseWe're seeing limited movement in the currency markets this week, which is not uncommon during the week between Christmas and New Year's. Trading volume remains thin and the data calendar is very light. In the North American session, EUR/USD is trading at 1.0649, up 0.35%. The US released unemployment claims today, one of the highlights in a quiet week. Initial jobless claims climbed as expected to 225,000, up from 216,000. A rise in week-to-week claims should not alarm investors, as there is bound to be some fluctuation in the releases. The 4-week moving average, which smooths out these fluctuations, remained virtually unchanged at 221,000. There are no tier-1 releases out of Germany or the eurozone this week. On Friday, Spain releases CPI for December, and inflation in the eurozone's fourth-largest economy could signal what to expect from next week's German and eurozone inflation releases. Inflation in Spain has been steadily dropping, from a peak of 10.8% in July to 6.8% in November. The downtrend is expected to continue in December, with a consensus of 6.1%. The ECB has sent out hawkish messages lately, with Vice-President Luis de Guindos saying last week that "Increases of 50 basis points may become the new norm in the near term." De Guindos added that the ECB was concerned that the markets might underestimate the persistence of inflation. Fed Chair Jerome Powell would wholeheartedly agree, as the Fed has found it tough going to convince the markets that it remains hawkish and plans to continue raising rates into 2023. The markets jumped on a couple of soft US inflation reports as an indication that the Fed would pivot and become dovish, sending the US dollar sharply lower. It was only after a hawkish Fed meeting earlier this month that the markets seemed to get Powell's message. Still, the Fed remains concerned that such speculation could loosen market conditions and complicate the Fed's painstaking battle to curb inflation. EUR is testing resistance at 1.0660. Above, there is resistance at 1.0746 1.0574 and 1.0488 are providing support
by OANDA
Number of Sunspots and Inflation CYCLESHi friends Today im going to explain about the relationship between Sunspot Numbers and Inflation rate from 1960 to now. so lets start with inventor of this theory : William Stanley Jevons's In 1875 and 1878 Jevons read two papers before the British Association which expounded his famous "sunspot theory" of the business cycle. Digging through mountains of statistics of economic and meteorological data, Jevons argued that there was a connection between the timing of commercial crises and the solar cycle. it called 5.31-Year Cycle too. In the stock market and in the economy, there are both natural frequencies and artificial excitation frequencies. The four-year presidential election cycle is a great example of an excitation frequency, and it has demonstrable effects on stock prices. The schedule of FOMC meetings 8x per year is another possible example of an artificial excitation frequency. When a demonstrable cycle period appears that one cannot tie to some manmade excitation frequency, then the supposition is that it is a "natural" frequency of the economic system. Something about the economy or the market results in an oscillation on a certain frequency which may not have a good outside explanation. Perhaps it is in how money flows. Perhaps it is in how human brains make decisions about surplus and scarcity. It is hard to know. This 5.31-year frequency in the CPIs cycle seems to fall into that category as a natural cycle, because the 5.31-year period does not match any known excitation frequency related to human activity nor the economic calendar. So that makes it probably a natural frequency. In above chart , there does seem to be a relationship between sunspots and the inflation rate. We see lots of instances when the peak of the sunspot cycle coincided with the peak of the inflation rate. There have been spikes in the inflation rate not tied to the sunspot cycle, such as the spike during the Arab Oil Embargo of 1973-74. this examples did, interestingly, come at the halfway point of the sunspot cycle, fitting the half-period harmonic principle(5.31 year cycle). The current rise in inflation fits both the longstanding 5.31-year cycle and the upswing in the sunspot cycle. Solar researchers expect the current sunspot cycle rise to end in July 2025, which is 3 years from now. But the 5.31-year cycle says a top in the inflation rate is expected right now. That would mean seeing the inflation rate bottoming around 2025 just as the sunspot cycle is peaking. Sometimes cycles present us with conflicts that are hard to reconcile. The point of the 5.31-year cycle that we can take away for right now is that the inflation rate should be falling for the next ~2.2 years. But that does not mean we get to zero percent inflation right away. The drops take a while to unfold. Inflation is likely with us for a while, and we have to get used to that idea.
ECONOMICS:USIRYYEducation
by TraderAmin-KZ
2
AUS200 forecast December/JanuaryWith holiday comes low volatility. I expect market to stay within 7080-7158. Very likely till first week of January. This might play out two ways: 1. Bullish scenario: - we break above 7158, and hit 7250. (Max 7400 to form double top on daily chart and then drop to 6500 or even new lows) - looking into Elliott Waves strategy - we could face one more wave to the upside 2. Bearish scenario: - not much movement until Jan, staying around 7080-7195. - drop to 6500. Long story short I expect going back towards 2022 lows in the next three months. It’s hard to say when exactly it’ll happen. Big move can be triggered by pretty much anything at this point (worse CPIs, new Russian sanctions, restrictions in China, new wave of Covid….). This is a risky enviroment so trade carefully and always do your own analysis before opening the trade.
FX:AUS200
by Trinnisia_Trades
1
Using FOMC as trade confluence!TECHNICAL REASON: Price was within the zone of interest and the 4H candle has no lower wick which means everyone is priced one way; could see some profit taking ahead of FOMC FUNDAMENTAL REASON: It is worth noting that to the Fed, to gage inflation and how sticky it is or isn't, they are looking at jobs (more than CPI, PPI etc). Since the job market isn't cracking, it's a little premature to think that tomorrow they're going to come in as dovish as the market is expecting. Powell doesn't even have to necessarily come in Hawkish tomorrow for these moves to reverse. As long as he is less dovish than the average joe on Wall Street is expecting, USD is likely to have a strong reversal upward. Short idea proved to be valid on the back of inflation print, which I believe is not that relevant. The Fed is focused on Jobs more than CPI, PPI etc. If price stabilizes today (likely will), expecting the market to offer 1825 again as a wick hunt and then for XAU to roll over. HOW TO TRADE FOMC I've taken partial profits in anticipation of getting "wicked out" and if this occurs, I will re-enter short around 1825 CROSS ASSET: Everyone seems to be booking profits right now (see chart). The question is whether they will add once they're doing taking profits, open shorts or wait for tomorrow to make up their mind. The next 2.5 hrs are very important. 1. USD is stabilizing within lower boundary of wedge pattern 2. Bond yields haven't broken the low and are holding 3. NASDAQ (most forward looking index) is pulling back from the highs
OANDA:XAUUSDShort
by XAUSpeculator
6
SPX - Will we close above or below this trendline today?SPX - Will we close above or below this trendline today? Lets go through yesterday CPI came out lower so US equities headed higher, DXY headed lower but now look where we are. Today we have FOMC - In my opinion we can't even close above it do we today we took back all move of CPI if we close below it I think we back within these ranges and perhaps bears gain further control. Will Powell be dovish or Hawkish - The way I see it we get coin flip - Santa or the grinch. Trade Journal
SP:SPX
by Trade_Journal
1
Takeaways from the Fed Chair SpeechCBOT: Micro E-Mini Dow Futures ( CBOT_MINI:MYM1! ) The Fed’s 2022 Rate Decisions While we reflect on 2022, an eventful year full of “the unexpected”, rate hikes have undoubtedly dominated the headlines. In eight rate-setting Federal Open Market Committee (FOMC) meetings, the US central bank hiked the Fed Funds rate seven times, taking it up from 0.25% to 4.50%. The US Consumer Price Index (CPI) was 7.0% in December 2021. After a quick runup to 9.1% in the first half of the year, it came back down to 7.1% in November 2022. If the trend continues, we may end the year with an inflation below our starting point. However, current level is well above the 2% policy target. While the Fed emphasizes the need for on-going tightening, it expects inflation to be above 3% at year-end 2023. The Fed is on the right track, but there might be more to do. How did the Dow Jones Industrial Index React to Fed rate hikes? The Dow (DJIA) reached all-time high of 36,952.65 on January 5th. It pulled back 22% to 28,852 by September 30th on the back of three consecutive 75-bp rate hikes. DJIA closed at 32,920.46 on December 16th, down 10.9% year-to-date (YTD). The Dow’s Price/Earnings (P/E) was 20.49 on last Friday, down 6.9% from 22.01 year-over-year (YOY), according to Birinyi Associates/Dow Jones Market Data. For a comparison, S&P 500 hit 4,766 at year-end 2021 and closed at 3,852 last Friday, down 19.2% YTD. The P/E ratio for S&P was 18.91 now, down 35.1% YOY (28.69). Nasdaq 100 closed at 15,645 at year-end 2021 and settled at 11,244 last Friday, down 28.1% YTD. The P/E ratio for Nasdaq was 23.52 now, down 32.2% YOY (34.71). What do the datasets tell us? The Dow experienced a smaller correction (-10.9%) this year, compared to the S&P (-19.2%) and the Nasdaq (-28.1%). Its valuation, as measured by P/E ratio, is in line with the S&P and Nasdaq, all in the range of 19-24. However, the Dow’s P/E declined less than 7% from its top, vs. over -30% drop for both the S&P and the Nasdaq. Any trading opportunities? On December 14th, DJIA opened flat at 9:30AM. It began to fall after the Fed released its rate decision at 2:00PM. The index nosedived when Fed Chair Powell delivered his speech at 2:30PM Eastern Time. By the end of the following trade day, as investors fully digested the Fed’s policy, DJIA lost 884 points, or -2.6%. I put together a cheat-sheet to decode how DJIA anticipated and reacted to Fed Chair speeches throughout 2022. I denote T as FOMC date and T+1 the next trade date; Market Open at 9:30am, Market Close at 4:00pm; Rate decision release at 2:00pm, and Fed Chair Speech starts at 2:30pm; all the above in eastern time zone. Market reactions are represented by Up and Down. From Market Open (T) to Market Close (T+1), the changes in DJIA value were January -342, March +829, May -174, June -643, July +665, September -743, November -575, and December -884. All market data on DJIA is from Yahoo! Finance. Market anticipation and reaction were mixed in the early stage of this rate hike cycle. However, more recently, investors tended to have a rosy picture going into the FOMC, trading on the assumption of Fed Pivot. Each time, the Fed Chair speech brought them back to the reality of continued monetary tightening. DJIA declined six out of eight times. Average two-day change for DJIA during the last three FOMC meetings is -734 points. If we were to place a Short Futures order for Micro Dow Futures (MYM) for two days, we would have made a very nice Christmas bonus. MYM contract notional value is $0.50 per index point. Initial margin is $750 per contract. Hypothetically, if we captured 400 points, our 2-day payoff would be $200, or +27%. What’s the takeaway? Trading opportunities exist because the market is not aligned with the Fed. While Chair Powell made the point of fighting inflation forcefully over and over, investors did not take him seriously and kept dreaming of reasons for the Fed to end monetary tightening. While the Fed moderates rate hike to 50 bp, Chair Powell states that 4.25-4.50% Fed Funds is not restrictive enough. He emphasizes the “on-going” need for tightening. Policy target for inflation is 2% and there was never a discussion to raise it. It’s very clear that the Fed’s overarching goal is to bring inflation down to 2%. Pausing is premature. Next Fed meeting is on Jan. 31st - Feb. 1st. If DJIA repeats itself and moves up ahead of the rate decision, we may explore day-trading opportunities. In addition to the DJIA futures, similar strategies can be applied to Micro S&P 500 Futures (MES). MYM traded 285,803 lots with an open interest of 48,564 last Friday. Micro S&P is even more liquid, with daily trade volume exceeding 2 million lots. An alternative to the futures strategy is Options on futures. Put options on the March MES contract is currently quoted at $24.00. Options have bigger upside potentials if your market forecast is correct. 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
CBOT_MINI:MYM1!Short
by JimHuangChicago
10
Hard to be bullish... SP500 🥶📉Taking a look at the Daily chart for the SP500. We can see a near perfect downward channel filled with dumps and scam pumps. Last week we saw a big rejection off of the 4100 resistance that we pumped up to back in September (yellow line). Then the subsequent FOMC rate hikes and CPI numbers pushed us lower. We'd expect to see a bit of a relief rally back up to the top of the channel, but at this point the move down looks basically locked in. A bottom of around 3200 would put us right in line with the 2020 crash levels. This remains our "bottom", at least in for now barring any crazy black swan event. Which is quite likely with the current geopolitical climate. We'll see how the rest of 2022 plays out. Eyes peeled. -TucciNomics Chief Overlord, AlgoBuddy
SP:SPX
by QuantVue
All eyes on Fed's Interest Rate~~**Repost from Dec 14th 2022 since the original post disappeared** Though the CPI figures released last night were lower than expected, if you look one by one, you will notice that the price of services (Core Services) has not yet decreased, but food and oil prices have. TVC:GOLD As a result, let's keep our eyes on the Federal Reserve's interest rate announcement in upcoming hours, which many agencies, including Oxford Economics, Bloomberg, Forex Factory, and Trading Economics, expect to be 0.5%. If the Fed remains concerned and interest rates rise more than expected (0.5%), gold will take another ride up the hill tonight. If not, we should brace ourselves for a trip to Death Valley. Let's prepare for a ride~~
TVC:GOLD
by ChartTrail
XAUUSD Plan for CPI and Interest Rate Decision Week**Repost from Dec 11th 2022 since the original post disappeared** Regardless of the results from announcement of economic numbers, it would not be surprising to see gold price drop since the current price is standing near significant resistance area around 1810 USD. However, it would not be wise to open a short position until the break of uptrend structure is broken either from smaller time frame such as 15 min is making lower lows or the price closes below the uptrend regression channel in 1H time frame. There are two support levels to stop the bearish momentum at 1781 USD and 1765 USD. If the price does not break below 1781 USD, it has a chance of testing at 1823
OANDA:XAUUSD
by ChartTrail
XAUUSD Potential for Bullish Continuation | 15th December 2022Looking at the H4 chart, my overall bias for XAUUSD is bullish due to the current price being above the Ichimoku cloud , indicating a bullish market. Price has tapped into my pullback buy limit entry at 1794.885, where the 61.8% Fibonacci line is. Stop loss will be at 1777.685, where the recent swing low is. Take profit will be at 1824.515, where the recent swing high is. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
OANDA:XAUUSDLong
by Rockqet
BITCOIN price, CPI, FOMC-Fed Funds Rate Next week will be hot🔥Today, we will share with you our estimates on the possible movement of the BTCUSDT price over the next week. Let's start with the fact that last week's trade was justified, and it is still relevant. Buyers managed to keep the price above the liquidity zone of $16400-16600. Over the next few days, we expect that buyers will find the strength for another upward impulse. The main task of the upward momentum is to break the next portion of the shorts' stops, which are hiding above $18000. And then, ideally, the final retest of the strength of the liquidity zone $16800 - 17100 . If buyers do not allow the BTC price to consolidate below this zone, then it will be possible to speak with greater confidence at least about a local change in the trend. At the beginning of next week, increased volatility in the market is guaranteed. After all, on 13.12 the US Consumer Price Index (CPI) will be updated, and on 14.12 the Federal Reserve will announce a new US Fed funds rate (forecast +0.5%) So subscribe to us, put a like under the idea and write a comment. And we, in turn, will update this idea on Tuesday/Wednesday and comment on the market situation at the moment. _____________________ Did you like our analysis? Leave a comment, like, and follow to get more
Long
by P_S_trade
85
NZD/USD awaits Fed, GDPAll eyes are on the Federal Reserve, which winds up its policy meeting later today. Policy makers are expected to raise rates by 50 basis points at this final meeting of 2022, with an outside chance of a more aggressive 75 basis point hike. This year has set a record for tightening, but despite that, the Fed stills finds itself in an uphill battle to convince the markets that it remains in a hawkish mode. The dramatic inflation report on Tuesday was softer than expected at 7.1%, once again raising risk appetite and sending the US dollar sharply lower. Any drop in inflation is welcome news for the Fed, but let's not forget that inflation is still more than three times the Fed target of 2%. The Fed has reiterated that it is committed to curbing inflation and has not given any indications of winding up the current tightening cycle, stating that it expects the terminal rate to be "somewhat higher" than anticipated in September. Despite this, speculation is growing that the Fed might deliver one more rate hike in February, perhaps by 25 bp, and then call it quits. New Zealand releases fourth-quarter GDP later today, and the markets are bracing for a weak gain of 0.8% q/q. This follows the 1.2% gain in Q3, as the economy was boosted by the booming tourist trade as the border reopened. The New Zealand dollar has recovered nicely, gaining about 400 points against the US dollar since October 1st. The Reserve Bank of New Zealand will be on a long break, as the next policy meeting is not until February 22nd. We could see some volatility from NZD/USD in today's North American session, with the Fed rate announcement and the New  Zealand GDP release. 0.6472 is a weak resistance line. Above, there is resistance at 0.6591 There is support at 0.6388 and 0.6311
by OANDA
Pre-FOMC XAUUSD Forecast | Wednesday 14th December 2022Hi everyone, today I will be talking about a possible XAUUSD long trade using fundamental analysis. Context 1. CPI print yesterday came out better than expected 2. CPI m/m at 0.1% vs forecast of 0.3% 3. Core CPI m/m at 0.2% vs forecast of 0.3% Given the evidence of a cool down in inflation, the Fed's previous aggressive rate hikes has been coming to effect. This could potentially solidify the stance of a slow down in rate hikes and the Fed could adopt a more dovish stance in the market. This will result in XAUUSD ticking high, and all eyes would be on FOMC tonight. Personally, I believe that the Fed would be hiking by 50bps and hint at a lower terminal rate, this will result in validation of our potential long trade in GOLD.
OANDA:XAUUSDLong
by Jon_Jones_Junior
1