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GOLD - Trading Inside the Triangle#XAU/USD #Analysis Description --------------------------------------------------------------- + GOLD price is currently trading inside the triangle and the price has been ranging since May + I'm expecting the price to break downwards as the overall trend on lower timeframe is bearish. + We have good opportunity for a short trade here. --------------------------------------------------------------- VectorAlgo Trade Details ------------------------------ Entry Price: 2311.453 Stop Loss: 2325.813 ------------------------------ Target 1: 2304.801 Target 2: 2300.000 Target 3: 2290.430 ------------------------------ Timeframe: 1H Capital Risk: 1-2% of trading amount --------------------------------------------------------------- Enhance, Trade, Grow --------------------------------------------------------------- Feel free to share your thoughts and insights. Don't forget to like and follow us for more trading ideas and discussions. Best Regards, VectorAlgo
OANDA:XAUUSDShort
by VectorAlgo
🇺🇸 US2M - QE To buy the US Debt again ? 💎Here's an intriguing observation I'd like to discuss. The increasing number of diamond 💎💎 alerts serves as a warning sign indicating an imminent significant market move. - What is the US2M? The M2 money supply is a measure of the total amount of money in circulation within an economy that includes cash, checking deposits, savings deposits, and other liquid assets. It's broader than M1, which only includes cash and checking deposits. M2 is important because it gives a more comprehensive picture of the available money for spending and investment within an economy. - Does quantitative easing add to the money supply? Quantitative easing expands the money supply by enlarging the central bank's balance sheet and introducing fresh cash into the economy. This process boosts banks' reserves held at the central bank, effectively increasing the overall money available for circulation and lending. So what does it imply ? 📈 When we say quantitative easing increases the money supply, it means that it adds more money into circulation within the economy. This can lead to more available funds for spending, investment, and lending, which can stimulate economic activity. ( + the US Dollar often goes down in this case) 📉 On the other hand, if we say quantitative easing decreases the money supply, it would mean the opposite: the central bank is reducing the amount of money in circulation. This could be done to control inflation or to address other economic concerns where too much money in circulation might cause problems like rising prices. (+ the US Dollar often goes up in this case) Do not forget to check this US2M Chart, it is very important. I wish you a great day. ILT 💎
ECONOMICS:USM2Long
by IllumiTrade
GOLD BUY WEAK NFP It's essential to understand that gold prices are influenced by a myriad of factors, including economic data and central bank policies. Recently, the Non-Farm Payrolls (NFP) report, a key indicator of economic health in the United States, came in weaker than expected. This unexpected weakness in job creation has led to speculation that the Federal Reserve may be inclined to cut interest rates to stimulate economic growth. The correlation between weak economic data, such as a lackluster NFP report, and the potential for interest rate cuts by the Federal Reserve can significantly impact gold prices. Here's how: Weak NFP Report: The NFP report provides insights into the employment landscape of the United States. A weaker-than-expected report suggests sluggish job growth, which can dampen confidence in the economy and raise concerns about future economic performance. Fed Policy Response: In response to disappointing economic indicators, such as the weak NFP report, the Federal Reserve may consider implementing monetary policy measures to support economic recovery. One such measure could be a reduction in interest rates to stimulate borrowing and spending, thereby bolstering economic activity. Impact on Gold Prices: Gold is often viewed as a hedge against economic uncertainty and inflation. In times of economic instability or anticipation of looser monetary policy, investors may flock to gold as a safe haven asset. The prospect of interest rate cuts by the Federal Reserve can further enhance gold's appeal, as lower interest rates typically diminish the opportunity cost of holding non-yielding assets like gold. Now, let's integrate this understanding into our analysis of gold's current trajectory: Given the recent weak NFP report, there's growing speculation that the Federal Reserve may opt for interest rate cuts to support the economy. This has injected a sense of uncertainty into the market and bolstered demand for safe-haven assets like gold. Consequently, we've seen an upward pressure on gold prices as investors seek refuge from economic volatility. In light of these developments, it's crucial to consider the potential implications for gold's future movements. Any signals or announcements from the Federal Reserve regarding interest rate decisions will be closely monitored by market participants, as they can significantly influence investor sentiment and, consequently, gold prices. CONCLUSION: Thats why we have put the buy order right on 2300 levels and a potential take profit on 2330, this is because there is a big resistance level there. Furtermore you can use the TradingView tools horizontal line that mark the support and resistance level which is very convenient. As we navigate these dynamics, it's important to exercise caution and remain vigilant in assessing the evolving economic landscape and its impact on gold markets. Market participants should stay attuned to key economic indicators, central bank policies, and geopolitical developments to make informed decisions in the dynamic world of gold trading.
FOREXCOM:XAUUSDLong
by ZILATRADES
Gold Surges as US Jobs Data Sparks Fed Rate Cut SpeculationThe price of gold witnessed a reversal in trend during Monday's Asian session, halting a two-day losing streak. Weaker-than-expected US employment reports bolstered the likelihood of a September rate cut by the Federal Reserve. Consequently, the US dollar declined while dollar-denominated gold rose. Upon reviewing the daily chart, I observed sellers rejecting upward moves for two consecutive days around the 23.6% Fibonacci retracement level. Technical indicators remain negative, signaling a downside risk. Throughout the week, I noticed a struggle in the financial market to find a clear direction, partly due to uncertainty stemming from Federal Reserve policies. Despite the Fed announcing a reduction in the pace of its securities holdings decline, interest rates remained unchanged. Chairman Powell expressed both hawkish and dovish stances, emphasizing the importance of employment data in shaping future policy moves. Furthermore, I examined recent US employment data, including private sector job additions and the unemployment rate. The labor market appears tight, with indications of increasing wage pressures. Wishing everyone successful trading and a great week ahead.
OANDA:XAUUSDShort
by Forex48_TradingAcademy
1
AU to Dec. 2023 Levels?!Here I have AUD/USD on the Daily Chart! Since the Low in April, Price for AU has been on a Bullish Run! I believe the Resistance Level it has been struggling with all year may be coming to BREAK soon!! On the tail of LOWER than expected NFP numbers for USD last week AND word that the RBA may be needing to look to INCREASE INTEREST RATES .. We could see MUCH more bullishness from AU SO much in fact that I think the Highs of Dec. 2023 may be in sights! I am currently waiting for: Price to fall Lower to a Minor Level of Support to enter a Buy Position -OR- Price to Break the Resistance Zone @ ( .6640 - .6612 ) and then to Retest Break for Buy Position
Long
by Novi_Fibonacci
Yen Surges: Entry Point for USD/JPY Buyers Near 152.00This week, the Japanese Yen is poised to deliver a remarkable performance against the US Dollar. The Yen has surged by over 3% following Japan's intervention to bolster the currency and the Federal Reserve's less hawkish tone. Around 152.00, not only is there a crucial level, but the 55-day Simple Moving Average (SMA) is also nearby, along with a long-term ascending trend line just below to provide support. This makes it the perfect entry point for any US Dollar buyer anticipating USD/JPY to head towards 160.00. Meanwhile, the US Dollar Index (DXY), which measures the value of the US Dollar against a basket of six foreign currencies, is losing ground around 105.00 as markets step back to avoid being overwhelmed by Japanese interventions. The weaker-than-expected Nonfarm Payrolls print in the United States has, in the meantime, pushed USD/JPY below 152.00 and has seen a significant number of US Dollar buyers stepping in to buy the dip at these levels.
Short
by Forex48_TradingAcademy
1
Strifor || AUDUSD-30/04/2024Preferred direction: BUY Comment: Before the Fed meeting on major currency pairs, a rather uncertain situation has developed, and the best option will most likely be to refrain from trades and make a decision on entry after the interest rate decision. However, the most likely scenario is in favor of buyers. At the moment, the best option would be to look for an entry point near the support level of 0.64906 . We consider two scenarios near this level, where scenario №1 is about a rebound trade, and scenario №2 - a false breakout. The growth target in both cases is the level of 0.66000 . If, after the Fed , the price falls below the support level of 0.64906 and cannot recover, then you should not count on growth in the medium term. Additional comments on this trade will be provided as situation changes. Follow us! Thank you for like and share your views!
Long
by Strifor
3
Strifor || GBPUSD-Week StartingPreferred direction: BUY Comment: The British currency continues to struggle at the level of 1.25000 , and despite everything, so far everything is working out more in favor of the buyer. The week is filled with events and here, just like in the euro, you need to be ready to change your original plan. The most likely scenario is a breakout of the level of 1.25346 and further growth to the level of 1.26000 (scenario №1). Today, the goals are modest against the backdrop of the upcoming Fed meeting, after this event, in the event of a positive outcome for the main competitors of the US dollar , it will be possible to count on growth to 1.28000 . Scenario №2 will become more active if the US dollar strengthens against the backdrop of upcoming events, but medium-term purchases in this case will be relevant. Additional comments on this trade will be provided as situation changes. Follow us! Thank you for like and share your views!
Long
by Strifor
1
Strifor || EURUSD-Week StartingPreferred direction: BUY Comment: At the beginning of the new week, the euro remains on the buy list, especially if we are talking about the prospect of 1-3 days (before the Fed meeting on Wednesday). This event, as well as the NFP , forces one to be as flexible as possible and be prepared for changes in trading plans at the beginning of this week. Nevertheless, growth is still more likely, but unfortunately, the targets are not as promising as last week. This week, as part of the growth, targets above 1.08000 are not yet being considered. If the dollar's weakness is demonstrated, one can count on growth towards 1.09000 , where there is a large liquidity zone. Two scenarios are considered, where the more likely scenario №1 says about growth near the level of 1.07225 (breakout trade). A less likely scenario №2 is about the strengthening of the US dollar on Wednesday, within which we can expect a fall to the level of 1.06500 . But since technically there is still a possibility of growth to 1.08000 , then in the event of this fall, we can consider going long again according to scenario №2 . Additional comments on this trade will be provided as situation changes. Follow us! Thank you for like and share your views!
Long
by Strifor
1
Pound edges higher as UK Services PMI beats estimateThe British is in positive territory on Friday. GBP/USD is trading at 1.2555, up 0.16% at the time of writing. The service sector accelerated in April, as the Services PMI rose to 55.0, up from 53.1 in April. This was the strongest level since May 2023 and services has shown growth for six straight months, with readings above the 50 level. The PMI survey noted that business and consumer spending were higher in April and reflective of an improving UK economy. The positive report has given the British pound a slight boost on Friday. The US labour market has remained surprisingly strong and has weathered the Federal Reserve’s steep rate hikes. The March nonfarm payrolls report sizzled at 303,000, well above expectations. The April data is unlikely to be as strong, but the market forecast of 243,000 would indicate that the labour market remains tight. The markets will be keeping a close eye on wage growth, which contributes to inflation. Wages rose 0.3% m/m in April and are expected to remain unchanged in the April release. The unemployment rate is also expected to remain unchanged at 3.8%. The Federal Reserve reiterated at this week’s meeting that inflation remained too high to lower rates. Still, the markets were relieved that Fed Chair Powell appeared to rule out the next rate move being a rate hike and that sent the US dollar lower against the major currencies. Just one month ago, the markets had fully priced in a rate cut in September but the probability has fallen to 61%, with a 73% probability of a cut in November. GBP/USD tested resistance at 1.2563 earlier. Above, there is resistance at 1.2590 1.2517 and 1.2490 and providing support
by OANDA
Strifor || EURAUD-01/05/2024Preferred direction: SELL Comment: Previous trading ideas for this currency pair worked perfectly, and, as expected, the resistance level of 1.64767 has stopped buyers. At the moment, the probability of resuming the downward movement is high. An increase towards 1.65500 is not excluded within the framework of scenario №2 . However, the more likely scenario №1 involves a fall from current prices with a target at the level of 1.63067 . Additional comments on this trade will be provided as situation changes. Follow us! Thank you for like and share your views!
Short
by Strifor
3
What does a First Fed Rate cut really mean?ANALYSIS ON FED STANCE Powell has consistently indicated that interest rate decisions would hinge on economic data, a stance reaffirmed by the unchanged rates in the latest policy announcement. Despite the Fed's clarification that rate cuts are unlikely until there is more certainty that inflation is consistently heading towards the 2% target, some still question if this is truly a dovish stance. Persistent high inflation has led to adjustments in the market's expectations, now reflecting only a 45% likelihood of a single rate cut by September—down from earlier predictions of three cuts this year. I maintain that even this adjusted forecast is overly optimistic. (drawn and extrapolated on the chart above) Powell emphasized that the Fed requires more than a month or two of data to influence policy changes, pointing out that the data from the most recent quarter has been particularly concerning. This sentiment is reflected in the market's behavior, with rising yields and ongoing corrections in equities. Market volatility remains high, especially around Federal Open Market Committee (FOMC) announcements, evidenced by significant selling in both the Nasdaq ( NASDAQ:IXIC ) and NYSE on high trading volumes. In light of these conditions and Powell's recent remarks and the elevated volatility, I've chosen to scale back my market exposure back to nearly 100% cash for about 3 weeks now. WHAT DOES CUTTING RATE REALLY MEAN FOR STOCK MARKET I have calculated all the times when there has been a First Fed Rate Cut and extrapolated the 6-month % change and the 12-month % change following this First Fed Rate Cut. Assuming that this can happen in September (currently about 45% chance that rates will be cut in September based on the CME FedWatch Tool), then I have plotted the results using a black line. This is the average of the 24 times since 1921 that the Fed has made a FIRST rate cut. It is clear that the average scenario is very bullish with an average 12month change around +14-15% on the SP:SPX . However, what is more interesting is that if we look at the times where there is a rate cut without having a recession the scenario becomes very strong. The real concerns of the FED is that we might get reaccelerating in inflation. We are currently in a goldilocks situations, since even though inflation is a little high, the economy is growing and we are not overheating (much better position than EU economies, which are not growing so fast and would have to cut faster). Rates currently are about on average where they would be on a long term 5-year history. This reaccelerating fear is based on events happened before in 1970s and 1980s. You can see in the picture below and what the FED looks to avoid. If you are interested to play with the data, I have made the tool available in my script section. INDICATOR RAW DATA Feel free to use the raw data of the First Fed Rate cut for further analysis below. Source: Bloomberg Finance L.P. 05/05/1921 -12.01 9.87 05/01/1924 11.96 33.8 04/23/1926 11.29 12.82 08/05/1927 10.16 14.29 11/04/1929 13.87 -7.96 02/26/1932 -37.46 -29.83 04/07/1933 76.34 81.66 02/05/1954 16.7 39.39 11/15/1957 4.04 28.53 06/10/1960 -6.72 6.00 04/07/1967 8.65 3.64 08/30/1968 2.35 -6.84 11/13/1970 21.26 7.00 11/19/1971 18.61 24.04 12/09/1974 41.76 41.68 05/30/1980 16.75 17.29 11/02/1981 -7.43 16.02 11/21/1984 7.92 21.7 06/06/1989 10.31 17.17 07/06/1995 10.93 22.28 09/29/1998 21.11 26.4 01/03/2001 -4.26 -7.78 09/18/2007 -11.93 -22.78 07/31/2019 7.43 -2.05 Mean 9.9 14.43 Median 10.23 15.16
SP:SPXLong
by SimplerSignals
EUR/USD Finds Stability Amidst Inconclusive Dollar MovementEUR/USD witnessed a significant rebound on Thursday, returning to the upper end of recent consolidation above the 1.0700 level as market sentiment stabilized ahead of another US Nonfarm Payrolls Friday. The pair faces initial resistance at the weekly high of 1.0750, followed by key levels such as the 200-day SMA at 1.0798 and the April peak of 1.0880. On the downside, a break of the 2024 low of 1.060 could indicate a return to the November 2023 low of 1.0510. The uncertain price action of the US dollar led to mixed movements in EUR/USD around the 1.0700 level on Thursday, influenced by investors' reactions to the recent Federal Reserve decision to maintain interest rates stable. The Fed reiterated its stance on the Fed Funds target range and expressed intentions for potential interest rate cuts amid concerns about inflation and economic balance disruptions. Comments from Chairman Jerome Powell also weighed on the dollar, suggesting reluctance towards rate hikes in future monetary policy adjustments. Despite short-term weakness, expectations of a delayed interest rate cut by the Fed could limit the prolonged weakness of the US dollar. Additionally, US yields decreased while the divergence in monetary policies between the Fed and other G10 central banks, particularly the ECB, persisted. The subdued economic fundamentals of the eurozone contrast with the resilience of the US economy, supporting expectations of a stronger dollar in the medium term, especially with the possibility of the ECB cutting rates before the Fed. Consequently, EUR/USD is expected to undergo a more significant decline in the medium term.
Short
by Forex48_TradingAcademy
2
USD/JPY slides – did Tokyo intervene?It has been a remarkable week for the yen, which has exhibited sharp swings throughout the week. The Japanese yen fell as much as 1% earlier and on Thursday but has pared most of those losses. USD/JPY has risen 0.38% to 155.19 at the time of writing. Japan suspected of intervention In the Asian session, the yen fell as low as 157.55 but then recovered to precisely 153. The reason for the swing is unclear but there are strong suspicions that Japan’s Ministry of Finance (MoF) ordered another round of intervention. Japan’s top currency official, Masota Kanda, refused to comment on whether Japan had intervened. Kanda was also mum about whether there was intervention on Monday, when the yen spiked and fell below the 160 level before recovering. Money market movements indicate that the MoF did intervene on Monday, selling as much as $35 billion to prop up the yen. The yen’s swings Monday and today could signal that the MoF has targeted 160 as its “line in the sand” for intervention. Fed holds rates, US dollar slips There was no surprise from the Federal Reserve which maintained the benchmark rate in the target range of 5.25% to 5.50% on Wednesday. This marked a six straight pause, as Fed Chair Powell was clear that high inflation has delayed rate cuts. The rate statement said that inflation had fallen in the past year but there was a lack of progress towards the 2% inflation target in recent months. At a press conference, Powell said that the Fed was not yet confident that inflation was falling closer to the target. Consumer inflation has been moving higher and the US economy remains surprisingly strong, which has complicated the Fed’s plan to provide relief to households by lowering rates. Still, the Powell said the next rate move was unlikely to be a hike, which sent the US dollar broadly lower against the majors on Wednesday. The yen soared as much as 3.2% against on the dollar after the rate announcement and closed on Wednesday with gains of 2%. USD/JPY is testing resistance at 155.13. Above, there is resistance at 157.26 There is support at 152.27 and 150.14
by OANDA
Strifor || USDCAD-01/05/2024Preferred direction: SELL Comment: A busy middle of the week, during which we expect large statistics on production and the US labor market, and at the very end we expect the announcement of the Fed interest rate. In addition, we will find out the Fed's prospects for the near future. Against this background, US dollar shorts still look better, at least in the short term. For the USDCAD currency pair, we consider two scenarios that can be found on the chart. We consider two scenarios simultaneously, since volatility is a common phenomenon against the backdrop of such economic events. We consider the target for the fall to be at the level of 1.37020. Additional comments on this trade will be provided as situation changes. Follow us! Thank you for like and share your views!
Short
by Strifor
1
Confirmation of Bear Flag?? - EUHere I have EUR/USD on the 4Hr Chart! Since the LOW on Apr' 16th, Price has been traveling in what looks to be an Ascending Channel! Price today was unable to make a NEW HIGH to give us another test of the Rising Resistance and instead gave us quite the drop out of the Ascending Channel! With this break, I believe multiple confirmations are pointing to this price action being CONFIRMATION of PATTERN being a BEAR FLAG!! -RSI BELOW 50 -Price working BELOW DSR -Price BELOW 200 EMA -3-Point Sell Check Bear Flags are a strong continuation pattern typically giving investors the ability to foresee Selling Opportunities with Price giving a Strong Bearish Break of pattern, then to Test the Break of Pattern which is what I am currently waiting for!! -Once the current LOW has finished forming, I want to see price retrace to the Break of Pattern being in the ( 1.069 - 1.07 ) range for potential Sell Entries! *TP will be the Support Zone last visited in Oct. 2023 @ ( 1.0516 - 1.0462 ) *SL TBD
Short
by Novi_Fibonacci
AUD/USD stabilizes after taking a tumble, Fed nextThe Australian dollar has steadied on Wednesday after sliding 1.4% a day earlier. AUD/USD is up 0.19%, trading at 0.6489 at the time of writing in the North American session. Australian dollar slides after soft retail sales Retail sales in Australia fell 0.4% m/m in March, following a downwardly revised 0.2% gain in February and shy of the market estimate of 0.2%. The decrease in sales was felt across all industries, as consumers held tight to the purse strings. On an annualized basis, retail sales grew by just 0.8% in March, the lowest level since August 2021. The Australian dollar responded with sharp losses to the disappointing retail sales release. China posted soft PMIs which also weighed on the Aussie. The manufacturing PMI eased to 50.4 in April, down from 50.8 and just above the market estimate of 50.3. The services PMI fell to 51.2, compared to 53.0 in March and below the market estimate of 52.2. The data indicates that manufacturing and services are showing little growth, another sign of the slowdown in China, which is Australia’s largest export market. Weaker economic activity in China means less demand for Australian exports, which is weighing on the Australian dollar. Will Powell make a hawkish pivot? The Federal Reserve meets later today, with little doubt that it will maintain interest rates for a sixth straight time. The target range for the benchmark rate of 5.25% to 5.5% hasn’t changed since July and the Fed has shown that it is willing to prolong its “higher for longer” stance as long as is needed. Fed Chair Powell is expected to have a hawkish message for the market, which would likely provide the US dollar with a boost. AUD/USD Technical AUD/USD is putting pressure on resistance at 0.6504. Above, there is resistance at 0.6537 0.6439 and 0.6406 are the next support levels
by OANDA
GBP/USD expected to move lower!The GBP/USD exchange rate shows a lack of direction, hovering below 1.2500 early on Wednesday, amidst US Dollar strength and cautious sentiment ahead of key US employment data and Federal Reserve policy communications. The exchange rate experienced a sharp decline on Tuesday, erasing previous gains amid subdued trading activity due to the closure of European markets for the May Day holiday. US Dollar strength, fueled by better-than-expected Employment Cost Index data, hindered GBP/USD recovery momentum. Market sentiment remains cautious awaiting the release of ADP Employment Change and ISM Manufacturing PMI data for April, with investors awaiting the Fed's monetary policy decision. The Fed is expected to maintain rates at the current level, but any changes in the statement language or hints from Chairman Jerome Powell could influence market sentiment. Currently, markets anticipate a 94% probability of no rate change in June, with a probability of a rate cut in September just below 50%. Powell's comments on inflation and future rate adjustments will be closely monitored, potentially impacting the performance of the US Dollar against the British Pound and other currencies. A dovish stance from Powell could weigh on the US Dollar and support a rebound in GBP/USD, while a hawkish tone could further strengthen the US Dollar and maintain pressure on the exchange rate.
Short
by Forex48_TradingAcademy
XAU/USD | GOLD OVER ALL PLAN ( SMART MONEY ) DECRYPTERS Welcome to DECRYPTERS ! NOTE:- PLEASE READ FULL DESCRIPTION BEFORE CONCLUDING ANY THING UPON ANALYZING GOLD OVER ALL TRENDI IS BULLISH DUE TO SEVERAL FACTORS 1 - GEO POLITICAL SITUATION 2- BANKS DEMANDS FOR GOLD 3- INFLATION ISSUES IN US 4- JAPAN CURRENCY DEVALUING ISSUE 5 BRICS 6 -INFALTONUN CERTANITY SMART MONEY HATES UNCENRTANITY , SO THEY ARE BUYING ALOT OF IT OVER ALL GOLD IS BULLSIH IN YEARLY / MONTHLY /WEEKLY CHARTS ( FOR NOW) FOR Now gold is moving in 4 H desecnding channel once it Reaches 2215 - 2225 Area we may see rejection from there . in case if its Flip the Area we may see possible up side Even new All time highs too The down side area 2225 - 2240 we have yearly V WAP Area there as well The projected path of that is shown in chart Even Alot of confluences at that area as POI for trade Thanks for reading the post and be with us till Now , Plz Press Like button if you like the post "REGARDS DECRYPTERS"
OANDA:XAUUSDShort
by DECRYPTERS
4
Strifor || GOLD-Week StartingPreferred direction: BUY Comment: After a quiet week in the metals market, the coming week is likely to be very volatile. In addition to the technical accumulation in the triangle format, we have a lot of economic data and events that will happen this week. The most likely scenario №1 will involve a breakout trade at the level of 2340 . Scenario №2 assumes a preliminary fall to 2300 , but you need to be careful here, since a close below 2300 will most likely generate a downward movement to 2200 and 2150 . In the case of a positive outcome, a closure can be expected above the level of 2340 , and then enter a long position with a target of 2400 , then 2440 and higher. Additional comments on this trade will be provided as situation changes. Follow us! Thank you for like and share your views!
OANDA:XAUUSDLong
by Strifor
1
GOLD XAUUSD SELLGold prices could plummet if the Federal Reserve fails to enact anticipated rate cuts, particularly amidst widespread expectations for such actions. Here's why: Market Expectations: Investors often base their decisions on expectations, including anticipated actions by central banks like the Federal Reserve. If there's a widespread belief that the Fed will cut interest rates to stimulate the economy or combat inflation, investors may adjust their portfolios accordingly, including buying gold as a hedge against potential economic uncertainties or inflationary pressures. Pricing In Expectations: Financial markets typically "price in" expectations, meaning they incorporate anticipated events into current asset prices. In the case of gold, if investors expect rate cuts and buy gold in anticipation, the price of gold may already reflect these expectations. However, if the expected rate cuts don't materialize, the rationale for holding gold as a hedge against potential economic risks or inflation diminishes, leading investors to sell off their gold holdings. Disappointment and Market Reaction: If the Federal Reserve decides not to cut interest rates despite widespread expectations for such action, it could disappoint investors who had positioned themselves for a rate cut. This disappointment could trigger a sell-off in gold and other assets that were bought in anticipation of rate cuts. Additionally, the lack of rate cuts may signal to investors that the Fed is less concerned about economic risks or inflation than previously thought, further dampening demand for gold as a safe-haven asset. Shift in Market Sentiment: Market sentiment can quickly shift based on unexpected central bank actions or economic developments. If the Federal Reserve's decision not to cut rates is interpreted as a sign of confidence in the economy or a belief that inflationary pressures are transitory, investors may become less inclined to hold gold as a hedge. This shift in sentiment could accelerate the decline in gold prices as investors reevaluate their investment strategies. In summary, if the Federal Reserve fails to cut interest rates despite widespread expectations for such action, gold prices could decline as investors adjust their portfolios and reassess the need for gold as a hedge against economic risks and inflation.
FOREXCOM:XAUUSDShort
by ZILATRADES
USD/JPY: Breaching 158.500 signals potential run to 160? USD/JPY: Breaching 158.500 signals potential run to 160? The JPY weakened below 158.200 against the dollar. It is the first time since May 1990 we have seen this exchange rate for the USD/JPY. The reason is being attributes to the Bank of Japan keeping interest rates unchanged last Friday. With the USD/JPY comfortably above both the 50-day and 200-day EMAs, a break above 158.500 might propel it towards 160.000. Market attention remains fixed on whether Japanese authorities will intervene in currency markets to stem the yen's decline. Other than this, short-term USD/JPY movements may depend on this week's US and Japanese economic data. In Japan, focus lies on April's consumer confidence, unemployment rate, retail sales, and industrial production, along with insights from the BoJ's meeting minutes. better-than-expected figures could boost demand for the Japanese yen. However, most eyes will be on the US Fed's upcoming decision this week, with expectations for maintaining record-level borrowing costs, potentially pushing the yen further down. The Fed decision will be followed by the non-farm payrolls report, expected to show a rise of 210K jobs in April, though slower than March's 303K. Better-than-expected figures here could affect investor outlooks on a September Fed rate adjustment, and giving the USD/JPY more reason to target the 160.000 level.
by BlackBull_Markets
Fed decision preview: Zero rate cuts and EURUSD parity in 2024? Fed decision preview: Zero rate cuts and EURUSD parity in 2024? Expectations point to the Federal Open Market Committee maintaining interest rates at their current levels in the upcoming decision slated for May 1. However, fixed income markets suggest the possibility of rate cuts surfacing in either the July or September meetings of the FOMC. Nonetheless, Thursday’s economic activity report ushered in another jolt for investors and Federal Reserve policymakers. They had been bracing for lower inflation to pave the way for substantial interest-rate cuts this summer. The core price index for personal consumption expenditures in the United States, excluding food and energy, surged by an annualized 3.7% during the first quarter of 2024. This marks an acceleration from the previous three-month period's 2% increase, surpassing the estimated 3.4%. Recent remarks by Fed Chair Jerome Powell and other policymakers have solidified the conviction that rate cuts won’t materialize in the near term. In fact, there's been discussion about the potential for further hikes if inflation fails to abate. Given the challenging scenario, where higher interest rates don't appear to be substantially denting the economy, the question arises: What if policymakers opt to maintain current rates throughout 2024 without any cuts? With the divergence in outlook from the Fed and the ECB, can we expect parity to be reached again in the EUR/USD this year?
by BlackBull_Markets