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Gold price juggles ahead of Fed’s preferred inflation gaugeDaily Digest Market Movers: Gold price remains inside the woods as the upside was capped amid uncertainty ahead of the United States core PCE price index data for December. While the downside is being supported because of geopolitical tensions and the chance of rate-cuts by the Federal Reserve this year. The Fed’s preferred inflation gauge is forecast to rise by 0.2% against the former reading of 0.1%. The annual underlying inflation data is set to slow to 3% versus 3.2% in November. The US economy expanded at a robust pace of 3.3% in the final quarter of 2023 while market participants projected a slower growth rate of 2.0%. This has uplifted the economic outlook, which could keep price pressures elevated. US Treasury Secretary Janet Yellen said surprisingly strong economic growth came from higher productivity and robust consumer spending without escalating inflation risks. A stubborn core PCE price index report could combine with an optimistic economic outlook to propel upside risks to price pressures. This would allow Fed policymakers to continue to maintain a hawkish interest rate stance for the first six months of 2024. After the release of the Fed’s preferred inflation gauge, market participants will shift their focus towards the Fed’s first monetary policy of 2024, which will be announced next week. The Fed is widely anticipated to keep interest rates unchanged in the range of 5.25-5.50% for the fourth time in a row. Investors will keenly focus on the timing of when the Fed will start reducing interest rates. The CME Fedwatch tool is showing that the chances in favour of a 25-basis point (bp) rate cut in March are at 48%. This indicates that traders are seeing the Fed reducing interest rates from May. Till now, Fed policymakers have been considering expectations of rate-cuts from March as “premature” due to resilient US economic prospects and stubborn inflationary pressures. Fed policymakers have been warning that rate cuts at this stage would be premature, which could lead to a surge in overall demand and dampen efforts made to bring down core inflation to its current 3.9% level. The US Dollar Index (DXY) holds onto recovery inspired by upbeat US Q4 GDP data but struggles to print a fresh high near 104.00.
OANDA:XAUUSD
by dc_analytics
EURUSD | Long Trade on Daily and M15 ChartsThe future of the EUR/USD is uncertain, with the possibility of further declines if the support level of 1.0821 is breached. In case of a descent, it could test the 100-day moving average at 1.0774 and then touch the December 2023 low of 1.0723. The negative outlook would intensify if it surpasses the key 200-day moving average at 1.0843. On the positive side, the pair needs to surpass the weekly high of 1.0998 to open the door for a possible visit to the December peak of 1.1139. In the short term, the pair seems to be consolidating near 1.0820. Technical indicators such as the MACD and RSI suggest downward pressure, with the RSI falling below the 40 level. Events such as the ECB press conference and German economic data influence the sentiment of the EUR/USD, with the lack of surprises leading to a decline on Thursday. Contrasting economic prospects between Europe and the United States, along with positive signals from the U.S. GDP, have contributed to supporting the dollar. The Federal Reserve appears inclined to delay an interest rate cut until at least May, according to market probabilities. The release of PCE-measured inflation on Friday could further influence interest rate expectations. In summary, the current context suggests uncertainty in the future movements of the EUR/USD, with economic factors and decisions from the ECB and the Federal Reserve having a significant impact on the currency pair's outlook. Therefore, I consider it safer to evaluate a trade on the daily chart, where I observe a neater chart setup. I have identified a demand zone where the price could retrace to rotate and provide a long entry confirmation at the 15-minute chart, with a target set at the level of 1.1142, where we have a significant liquidity zone yet to be filled. Greetings and happy trading to all.
Short
by Forex48_TradingAcademy
1
USDCAD Sell Setup Towards 1.33 with Explanation!The USD/CAD pair is trading laterally near 1.3440 after a sharp descent from the psychological resistance of 1.3500 in the early hours of the European session. The Canadian Dollar (CAD) showed limited activity on Monday to start the trading week with subdued momentum across the major currency landscape before a sudden decline against the US Dollar (USD). CAD traders will closely watch Wednesday's interest rate decision from the Bank of Canada (BoC), and markets brace for an eventful Friday to conclude the week with a fresh release of the US Personal Consumption Expenditures (PCE) price index. The latest figures for Canada's New Housing Price Index are expected in the early hours of Tuesday's US session, but their impact is anticipated to be limited. The Canadian Dollar lacked significant momentum on Monday before extending short-term losses against most of its counterparts. Markets are proceeding cautiously to start the new trading week but remain near the high side after US stocks reached record prices last Friday. The Bank of Canada is widely expected to keep rates steady at 5%, and investors will be watching the subsequent press conference. According to a Reuters survey, 22 out of 34 economists consulted predict that the first BoC rate cut will occur in June, while the remaining 12 indicate April. In December, derivatives markets predicted a 60% probability of the first BoC rate cut in March. This week will see interest rate decisions from three central banks, but market sentiment is likely to depend on central bank press conferences and statements, with hopes of global rate cuts widely disappointed in recent weeks. Furthermore, geopolitical concerns are keeping crude oil bids high, but accumulations in refined products are becoming hard to ignore as global fossil fuel demand prospects begin to fade. The upcoming OPEC meeting will be interesting to assess the potential strength of Brent and consequently the Canadian Dollar, which, according to the bearish channel depicted on the chart, could decline towards 1.33 after a rebound that appears to be concluding these days around the reversal level of 1.3480. Wishing everyone successful trading, greetings from Nicola.
Short
by Forex48_TradingAcademy
7
EURUSD is ready for the ECB with target 1.07!The EUR/USD exchange rate is advancing significantly after two consecutive days of retracement, although a convincing break of the 1.0900 barrier remains elusive at the moment. The prospects for the pair are expected to turn bearish if it sustains a convincing breach of the crucial 200-day moving average, currently at 1.0844. On the upside, the weekly level of 1.0998 (January 11) must be surpassed to open the door to a possible visit to the December high of 1.1139 (December 28). Based on the 4-hour chart, the pair seems to have returned to a consolidation phase. The unexpected and intense dollar sell-off has allowed the EUR/USD to shake off some of its recent weakness and refocus on the upside, surpassing the 1.0900 threshold to print new multi-day highs. The USD Index (DXY) has succumbed to the prevailing risk-friendly environment and dropped below the 103.00 region despite the rise in U.S. yields along the curve, while speculations continued to indicate decreasing bets on a Fed rate cut in March, favoring a rate reduction in May instead. Also contributing to the renewed buying interest in the pair, advanced PMI readings in Germany and the Eurozone came in on the strong side for January, highlighting a revival of economic activity in the region and suggesting the possibility of a soft landing for the regional economy. With the upcoming ECB event in mind, it is important to emphasize that market participants have already priced in about 120 basis points of rate cuts for the current year. However, there is a growing debate among market participants and decision-makers at the ECB regarding when the central bank will decide to implement a policy rate reduction for the region. Additionally, President Lagarde has hinted at the possibility of a potential move during the summer. Tomorrow will be a truly interesting day, with no cuts expected, and the euro-dollar heading towards 1.07 as indicated by the chart. Greetings and happy trading to everyone from Nicola.
Short
by Forex48_TradingAcademy
3
Gold: Explanation of the Bearish Channel with a Target of 1981!Gold faced bearish pressures and reversed its trend during Wednesday's American session, dropping below $2,020. Positive PMI data from the United States contributed to the rebound in the yield of the 10-year US Treasury bond, negatively impacting XAU/USD. The latter could, therefore, become vulnerable to an acceleration of the decline towards the intermediate support of $1,988 before potentially descending to the 100-day Simple Moving Average (SMA), currently around the $1,972 zone. The next target would be the 200-day SMA, near the region of $1,964-$1,963. However, a possible continuation of buying could neutralize the short-term bearish outlook and trigger a short-covering rally. Consequently, the price of gold could rise to the $2,077 zone, aiming to reclaim the psychological threshold of $2,100. The precious metal, however, remains confined within a familiar trading range that has persisted in recent days, situated below the supply zone of $2,040-$2,042. Meanwhile, geopolitical tensions in the Middle East show no signs of easing and continue to act favorably for gold as a safe-haven asset. Furthermore, the decline in US Treasury bond yields weakens the US dollar, providing additional support for the commodity denominated in US dollars. On the H4 chart, the decline of gold from the peak of 2088 to the potential minimum in the coming weeks around 1980 is highlighted. Currently in a bearish channel, the price, after creating a new supply area, could retrace to it, creating a spike at the 0.62 Fibonacci level. I believe this could be interpreted as a confirmation signal for a short entry. I will await appropriate confirmations and keep everyone informed of the situation. Greetings and happy trading to all.
OANDA:XAUUSDShort
by Forex48_TradingAcademy
1
USD/CAD eyes Bank of CanadaThe Canadian dollar is showing limited movement on Wednesday. In the North American session, USD/CAD is trading at 1.3436, down 0.19%. The Bank of Canada will announce its first rate decision of 2024 later today. The BoC has maintained the cash rate at 5.0% for three straight times and barring further acceleration in inflation, the rate-tightening cycle is over. The key question is the timing of a rate cut. The BoC would love to chop rates and kick-start the weak economy, but a rate cut appears unlikely unless inflation moves closer to the 2% target. We've seen the Federal Reserve grapple with the "last mile" of the inflation battle, as inflation remains stubborn in the range of 3-4%, higher than the 2% target. The BoC has managed to push inflation down from a high of 8.1% in mid-2022 but rose slightly in December to 3.4%. Inflation is currently driven by services and housing costs, which are unlikely to fall considerably in the near term. This means that further rate hikes may not be effective in pushing inflation lower. The BoC has little reason to raise rates, but it is reluctant to start cutting rates while inflation remains well above the target and wage growth is still high. That leaves BoC policymakers with a strong reason to continue holding rates and remaining cautious until inflation moves closer to the 2% target. When can we expect the BoC to hit the rate-cut button? Two of Canada's major banks, RBC and BMO, expect a rate cut in mid-2024, while TD Bank is projecting an initial rate cut in the spring. USD/CAD is testing support at 1.3451. Below, there is support at 1.3360 There is resistance at 1.3520 and 1.3611
by OANDA
USDJPY Short Idea towards 144.50 with explanation!The Japanese Yen benefits from the hawkish stance of the Bank of Japan (BoJ) on Tuesday, although it lacks follow-through. The reduced bets on an imminent interest rate cut by the Federal Reserve (Fed) provide support for the US Dollar and the USD/JPY pair. The 147 area could act as a crucial point, and if decisively breached, it might trigger aggressive technical selling, dragging the USD/JPY pair towards the 144.00 level towards the next liquidity zone. On the flip side, the round figure of 148.00, followed by the 148.15-20 region, now seems to act as an immediate hurdle before the recent weeks' high around the 148.80 zone touched on Friday. Investors seem convinced that the Bank of Japan (BoJ) will show little willingness to end negative interest rates or make changes to the Yield Curve Control (YCC) policy at the end of a two-day meeting on Tuesday. This, along with a generally positive tone in equity markets, weakens the safe-haven JPY. Additionally, decreasing odds of a rapid interest rate cut by the Federal Reserve (Fed) act as a tailwind for the US Dollar (USD) and help the USD/JPY pair attract some buying near the 147.75-147.70 area. Furthermore, persistent concerns about slowing economic growth in China and the risk of a further escalation of geopolitical tensions in the Middle East might limit any optimistic movement in the markets. In the market, I have defined a hypothetical short scenario on the H4 timeframe, aiming to wait for further downside below the 147 level before considering a possible retracement to the 0.70 Fibonacci level. Only then will I enter the market to evaluate a short entry if the right confirmations persist on the M15 timeframe, with a target of 144.50, which is the first swing zone with excellent liquidity for the price to recover. Greetings and happy trading to all.
Short
by Forex48_TradingAcademy
1
EUR/USD: It's Time to Evaluate a Short Trade!Good morning traders, EUR/USD has firmly maintained its downward trend and retreated to multi-week lows in the 1.0820 zone amidst increasing pre-ECB weakness. Looking at the 4-hour chart, the pair seems to have broken below the consolidative phase. That said, the first support level will be around 1.0821 before 1.0723. On the bullish side, attempts should look for a test of the 200-SMA at 1.0920, followed by the 100-SMA at 1.0930 and then 1.0998. The continuation of the strong dollar buying bias has kept risk appetite in check, pushing the US Dollar Index (DXY) to a new yearly high around 103.80, also aided by higher US yields, especially in the belly and the long end of the curve, and the current risk-off environment. In light of the upcoming ECB event, it is interesting to note that market participants have already priced in around 120 bps in rate cuts for the ongoing year, and there is a growing debate between market participants and ECB decision-makers regarding the timing of the central bank's decision to initiate a reduction in the region's policy rate. Despite inflation surpassing the target set by the European Central Bank, policymakers in Europe seem inclined to maintain a cautious approach, even though weak economic fundamentals in the region limit the potential for the European currency to strengthen. The situation looks heated for the dollar; the market today broke a double demand zone at H4, and now it could retrace to the 62 Fibonacci level in the supply zone at 1.0884 before seeking liquidity at a swing low around 1.0750. In case of a retracement, it will be crucial to evaluate an entry, possibly towards the end of the London session, perhaps following a bearish structural change to confirm our view. Greetings to everyone and happy trading.
Short
by Forex48_TradingAcademy
1
AUDUSD is ready for a reversal with target 0.631The AUD/USD indicates a slight uptick, trading around 0.6580 on Tuesday after registering losses in the previous session. The improvement in NAB's Business Confidence may have contributed to supporting the Australian Dollar. The evident resumption of the downward trend around the Australian dollar led the AUS/USD to leave behind a two-day recovery, remaining under pressure in the sub-0.6600 zone at the beginning of a new trading week. So far, dollar dynamics, coupled with the still-lacking convincing signs of an economic recovery in post-pandemic China, are expected to continue dictating the mood around the spot and keeping its price action subdued, all in combination with an anticipated steady hand by the RBA in its February meeting. Returning to the RBA, it is widely expected to leave its official cash rate unchanged at 4.35% next month. The downtick in inflation figures recorded in December, along with further cooling of the (still tight) labor market, have underpinned that consensus among market participants for the time being. That said, the near-term outlook for the AUD remains tilted to the dovish side, a view that could gain further traction if the Federal Reserve continues to push back bets for an interest rate cut in the next few months. On the daily chart, I have highlighted a possible short scenario likely to unfold if confirmation is received around the 0.66-0.6650 level, with a final target of 0.63 and the recapture of all sell-side liquidity. Greetings and have a good day of trading to everyone.
Short
by Forex48_TradingAcademy
3
GBP/USD is ready to make a false high before going down!The GBP/USD exchange rate fluctuates in a narrow channel just above 1.2700 on Monday. The rebound of the major pair is supported by a positive risk environment. However, the increasing tension in the Red Sea could increase demand for safe-haven assets and limit the upside potential of the pair. GBP/USD experienced a rebound in the second half of the previous week, erasing a large portion of its weekly losses. However, the short-term technical outlook for the pair has yet to show an accumulation of bullish momentum as it holds steady around 1.2700 in the European morning on Monday. The rally in the U.S. Dollar (USD) exerted bearish pressure on GBP/USD last week. The improved risk sentiment towards the end of the week, as reflected in the significant rally in Wall Street's main indexes, weakened the USD and paved the way for a decisive rebound in the pair. However, investors remain uncertain about the timing of a Federal Reserve (Fed) policy shift ahead of key U.S. growth and inflation data this week. The CME FedWatch tool shows that the probability of a 25 basis points rate cut in March has decreased from 70% earlier in the month to about 50%. U.S. stock index futures are trading positively in the European session. I expect a strong rally from the short but intense bullish channel that could take the price to the supply zone at 1.2750, bouncing off the downtrend trendline. Currently, the current session is relatively calm, with focus on the BOJ; we will see if they have the courage to raise rates and bring them above zero, I hope so. It requires a shock to the market and, principally, to the yen. Greetings and happy trading to everyone from Nicola.
Short
by Forex48_TradingAcademy
1
Gold is ready for a new rally towards $2055The price of gold struggles to capitalize on the recovery trend in place for over two days, after hitting a low of over a month, and faces renewed selling pressure at the beginning of Monday. Declining US bond yields, a weaker dollar, and geopolitical risks could limit further losses. Additional gains could occur if gold manages to stabilize above the $2,030 resistance, while a downward movement could gain momentum with a break below the psychological support of $2,000. In addition to the conflict in Gaza, tensions between Houthi rebels and the US military are rising in the key commercial shipping route of the Red Sea. Furthermore, Pakistan carried out military attacks in Iran on Thursday, following a similar attack by Iran in its territory. In this context, the precious metal has recovered significantly, but short-term prospects have not yet turned bullish as further upside seems limited by diminishing bets favoring an interest rate cut by the Federal Reserve (Fed). Price growth is gradually declining, but recent data suggests that the economy is robust, particularly due to strong household spending. This adds pressure to inflation and makes it more likely that the Fed will maintain a restrictive monetary policy stance for a longer period. The Fed is expected to keep interest rates unchanged in the range of 5.25%-5.50% for the fourth consecutive time at the monetary policy meeting on January 31. On a daily chart, we can observe that the price is in a possible reversal zone and could gather liquidity in the highlighted box at the 2020 level. From there, a bullish impulse could start, reaching the 2055 level, another area that holds significant buyside liquidity. Greetings and happy trading to everyone.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
1
USDJPY Will the BOJ raise the rates?The USD/JPY exchange rate finds support near 148.00 as bets in favor of a Federal Reserve (Fed) decision to cut interest rates are gradually diminishing. Weak inflation data could lead the Bank of Japan (BoJ) to postpone its plans to exit from accommodative monetary policy. According to the CME Fedwatch tool, traders see a 53% probability of a 25 basis points interest rate cut in March, lower than the 70% from the previous week. The U.S. Dollar Index shows a clear contraction in volatility due to the absence of significant economic indicators. 10-year U.S. Treasury yields are hovering near 4.13%. The argument for maintaining interest rates at restrictive levels will be supported by persistent price pressures, steady labor demand, and robust consumer spending. Meanwhile, producers at factory gates are struggling to raise prices for goods and services due to weak demand. Additionally, the national Consumer Price Index (CPI) data for December slowed to 3.7% compared to the previous reading of 3.6%. Inflation data excluding fresh foods also softened to 2.3%, in line with expectations, compared to the previous reading of 2.5%. I primarily anticipate two scenarios: in the first, the BoJ will raise rates, and the market is likely to decline to seek liquidity around the 134-144 level, where there is a significant concentration of demand and the 0.62% Fib. Level. In the second scenario, if the BoJ doesn't change rates, it is more likely that the market will rise to touch the upper side of the bullish channel. Greetings and a good start to the week to everyone.
Short
by Forex48_TradingAcademy
1
SP500 is directed to $4200 after the last high!January 19th Closing: The U.S. basket index concluded the day with a significant increase, recording a gain of 1.23% compared to previous values. The initial movements were lively, with the index opening at 4,796.3 points, surpassing the previous day's high. Throughout the day, it continued the positive trend, closing at 4,839.8, approaching the highest level reached during the entire session. Status and Trend Analysis: Currently, the short-term outlook for the Standard & Poor's 500 index highlights a clear growth, with a target set at 4,873.3, but I don't believe it. In case of a temporary correction, the immediate target is set at 4,772.7. However, the prospects indicate a further downturn of the curve, reaching the peak of 4200. The situation reflects an uncertain phase and the potential for further negative market developments.
CBOE:SPXShort
by Forex48_TradingAcademy
1
XAUUSD is directed towards 2060 while the Recession is coming!The price of gold has reached almost $2,030, benefiting from the stabilization of the US dollar. However, a downward correction is not entirely convincing as traders reduce bets on a Fed rate cut in March. The precious metal has experienced a strong recovery after finding support near $2,000, backed by the 50-day Exponential Moving Average (EMA). Nevertheless, the resistance of the 20-day EMA at $2,035 hinders the gold bulls. The 14-period Relative Strength Index (RSI) has bounced back, but the future remains uncertain. Geopolitical tensions in the Middle East, including conflicts in Gaza and tensions between Houthi rebels and the United States, have driven gold higher. However, short-term prospects are not entirely bullish as bets for a Fed rate cut decline. Uncertainty about inflation in the United States persists, with conflicting data on price growth and a strong economy due to household spending. The Fed is expected to keep rates between 5.25% and 5.50% at the January 31 meeting, but traders will be attentive to any comments on managing expected rate cuts in 2024. Let's prepare for future gold rallies in anticipation of the turbulent storm that awaits the markets in the next 6 months. The market may not believe it yet, but the words of central bank speakers have been clear: no rate cut in the first quarter. Greetings and have a great weekend to everyone from Nicola.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
1
EUR/USD | No interest rate cut and towards 1.11The exchange rate between the Euro and the US Dollar remains consistently below 1.0900 on this Friday. A slight increase in the value of the US Dollar and yields on US Treasury bonds, in a context of general caution, is influencing the currency pair. Daily indicators are just beginning to highlight a negative direction, suggesting that the most likely path for the EUR/USD pair is downward, indicating that it's time to consider long positions. During the first European session on Friday, the EUR/USD exchange rate shows a subdued movement, remaining near the Wednesday low and extending for over a month, a region sensitive to the 0.62 Fib. The European Central Bank (ECB) is struggling to convey a clear message regarding the possibility of raising or lowering interest rates, which is preventing traders from taking directional positions on the common currency. Christine Lagarde, President of the ECB, has avoided countering bets for rate cuts exceeding 150 basis points this year but has emphasized the need for caution in the face of rising inflation in the Eurozone, reaching 2.9% YoY in December. Recent more cautious statements from various Federal Reserve officials have tempered expectations of an imminent interest rate cut. Meanwhile, the reduced likelihood of a more aggressive easing by the Federal Reserve has pushed yields on US 10-year Treasury bonds to their highest in over five weeks, providing some support to the US Dollar. In this context, markets are still considering a 50% chance of a Fed rate cut in March. This, along with stable performance in stock markets, limits the rise of the safe-haven US Dollar and provides some support to the EUR/USD pair. In the daily chart, it is evident that the price has reached the 62% Fibonacci zone and is now in a phase of a modest rebound, with expectations of an upward movement towards 1.11. It will be interesting to observe the Monday morning session in London to evaluate any bullish impulses and identify entry opportunities in what could be the most significant rally of the year. I wish everyone greetings and a pleasant weekend, from Nicola.
Long
by Forex48_TradingAcademy
2
Advanced Forex Trading Strategy M15The trading strategy under examination is tailored for the M15 timeframe in the forex market, focusing on identifying supply and demand zones to make well-informed trading decisions. Let's delve into the key steps to successfully implement this strategy. Step 1: M15 Chart Analysis Position yourself on an M15 timeframe chart to gain a more detailed view of the market. This shorter time frame allows for capturing swift movements and identifying potential trading opportunities. Step 2: Identification of Supply and Demand Zones Utilize technical analysis tools such as supports, resistances, and volume indicators to clearly pinpoint supply and demand zones. Demand areas represent points where price is expected to rise, while supply zones indicate potential downward reversal points. Step 3: Confirmation of Demand Zone Breakout Wait for the breakout of a demand zone, accompanied by a bounce. This confirms the strength of the movement and suggests a potential change in the price direction. Step 4: Waiting for Price Bounce Above the Broken Zone After the demand zone breakout, observe price behavior and wait for it to return above the same zone. This confirms the effectiveness of the breakout and suggests a potential entry opportunity. Step 5: Identification of Supply Zone Once the price has surpassed the demand zone, identify a possible supply zone. This is the level where price is expected to encounter resistance. Step 6: Market Entry and Goal Planning Enter the market when the price reaches the identified supply zone, aiming to capture the downward movement. Set the target corresponding to the minimum that led to the last uptrend, intending to capitalize on the potential downward movement. Conclusions: This advanced forex trading strategy on the M15 timeframe is based on analyzing supply and demand dynamics. Always remember to manage risk carefully and adapt the strategy to evolving market conditions.
Education
by Forex48_TradingAcademy
1
XAUUSD | Strong bearish momentum towards 1980On Wednesday, the price of gold (XAU/USD) experienced a downward correction in response to statements by Federal Reserve (Fed) Governor Christopher Waller, who cast doubts on a potential interest rate cut in the March meeting. The XAU/USD pair marked its second consecutive decline, indicating further declines in the daily chart. Despite falling below a 20-period Simple Moving Average (SMA), the pair remains above the 100 and 200 SMAs, both in the $1,960 region. In the short term, technical signals show a significant decline without signs of a bearish exhaustion. On the 4-hour chart, XAU/USD is below all moving averages, with the 200 SMA providing resistance around $2,037.25. Technical indicators suggest bearish pressure, supporting the possibility of a downside break below the $2,000 threshold. The price of gold is at its lowest since mid-December, while the U.S. dollar gains ground at the expense of declining global stocks. The XAU/USD pair approaches an intraday low of $2,003.28 as investors reduce bets on a potential Fed rate cut in March. According to the CME FedWatch tool, the probability of a cut is now 52%, down from the approximately 70% recorded a few weeks ago. Mixed U.S. data on Wednesday, with Retail Sales and Industrial Production both increasing in December, along with assertive Fed statements, reduce the likelihood of a rate cut in March. Bond yields are rising, with the 2-year Treasury offering 4.36%, and the 10-year yield at 4.10%, both at new multi-week highs. Meanwhile, Wall Street extends its Tuesday decline.
OANDA:XAUUSDShort
by Forex48_TradingAcademy
4
GBPUSD | Bullish triangle with liquidity problemIn the Forex market, there is a consistent upward movement of the US dollar, impacting overall risks and causing the GBP/USD pair to trim its initial gains, descending towards 1.2700. However, the GBP/USD remains above the lower limit of the ascending regression channel, and the Relative Strength Index (RSI) signals a bullish trend in the short term. Key levels include resistances at 1.2780, 1.2830, and 1.2860, and supports at 1.2750, 1.2710-1.2700, and 1.2670. Despite a brief dip below 1.2700, the GBP/USD closed positively above 1.2750 on Thursday. The improvement in risk sentiment supports the pair on Friday, as markets await PPI data from the USA. Thursday's CPI inflation data exceeded estimates, but markets do not rule out a Fed interest rate cut in March. The UK's Office for National Statistics (ONS) reports a 0.3% monthly GDP growth in November, keeping the British Pound resilient. The UK's FTSE 100 is up by 0.8%, reflecting a positive mood in European markets. An increase in US PPI inflation is expected in December, but the impact on the USD will depend on its significance.
Short
by Forex48_TradingAcademy
1
USOIL | How will geopolitical tensions influence the price?The West Texas Intermediate (WTI) price stands at around $72.70 per barrel during Thursday's Asian session, highlighting an upward trend supported by optimism generated by the Organization of the Petroleum Exporting Countries (OPEC). OPEC's monthly report anticipates robust growth in oil demand for 2024 and 2025, forecasting an increase of 2.25 million barrels per day (bpd) in 2024 and 1.85 million bpd in 2025. From a geopolitical perspective, disruptions in the supply chain in the Red Sea are preventing a more significant decline in crude oil prices, with attacks by Houthi forces in the area. The United States responded with strikes against the Houthi, and tensions escalated when the Houthi rebels targeted a U.S. ship. Internally, the American Petroleum Institute (API) reported an unexpected increase in weekly crude oil stocks, while the market awaits the upcoming Energy Information Administration (EIA) report, expected to show a decrease of 0.313 million barrels compared to the previous reading of 1.338 million barrels.
TVC:USOILLong
by Forex48_TradingAcademy
1
EURUSD | Best Trading Approach for the London SessionThe EUR/USD exchange rate remains around 1.0900, benefiting from demand in Thursday's Asian trading and the decline of the US dollar. The ECB, with a hawkish stance, opposes expectations of a rate cut, providing additional support. The pair may face downward challenges, with the key level of 1.0844 as the initial support, followed by 1.0723 and other previous lows. Conversely, surpassing the weekly high of 1.0998 could lead to a retest of the December 2023 peak at 1.1139. The technical outlook currently indicates potential short-term losses, with indicators such as a negative MACD and RSI rebounding from the oversold zone. On Wednesday, the EUR/USD recorded new multi-week lows before bouncing to 1.0870, influenced by robust US retail sales data, fueling expectations of a Fed rate cut. Monetary policy tensions also arise in the ECB, with Knot highlighting the discrepancy between market expectations and official forecasts, while Lagarde suggests a potential rate cut in the summer. The increase in bond yields, especially German bunds and US treasuries, has contributed to the strengthening of the dollar. Despite the absence of significant news in the euro area, disappointing results in Chinese fundamentals have added to an atmosphere of uncertainty about the global economic recovery.
Long
by Forex48_TradingAcademy
1
Market Phases | Buy & Sell zone!Today, we delve into the crucial market phases, focusing on the dynamics of accumulation and distribution, along with the concepts of BOS (Breakout of Structure), Sweep, Range, and Liquidity. Understanding these phases is essential for developing an informed trading strategy and improving trading decisions. The market goes through various phases, such as accumulation and distribution, which play a key role in price formation. Accumulation represents a period when institutional traders accumulate a significant position, while distribution is associated with the sale of these positions. BOS (Breakout of Structure) is a pivotal event where the price surpasses a significant support or resistance level. Analyzing BOS can provide signals for reversal or trend continuation, indicating the end of one phase and the beginning of another. The concept of Sweep involves the rapid and aggressive buying or selling of a large quantity of assets at current market prices. This may indicate institutional interest and influence the future direction of the price. Range refers to a consolidated price interval where the market is temporarily "locked." During these phases, traders can seek breakout or breakdown signals to identify trading opportunities. Liquidity is crucial as it represents the availability of a large volume of trades at a specific price level. Understanding market phases and concepts like BOS, Sweep, Range, and Liquidity provides a solid foundation for chart analysis. Using this knowledge, informed decisions can be made to identify trading opportunities and manage risks more effectively.
Education
by Forex48_TradingAcademy
1
GBPUSD is ready for the Bullrun towards 1.281The GBP/USD is rebounding towards 1.2700, driven by surprisingly high inflation data in the UK, which diminishes expectations of aggressive interest rate cuts by the BoE. US retail sales data has bolstered the strength of the dollar, slightly exceeding expectations. The exchange rate remains above the lower limit of the ascending channel, with the Relative Strength Index (RSI) indicating a bullish bias. Resistance levels are at 1.2780, 1.2830, and 1.2860; supports are at 1.2750, 1.2710-1.2700, and 1.2670. The GBP/USD reversed its direction, closing above 1.2750 due to an improved risk sentiment. US Producer Price Index (PPI) data is awaited, following a 3.4% increase in the Consumer Price Index (CPI) in December. The initial reaction supported the USD, but the market is not convinced that the Fed will avoid rate cuts in March. The UK's Gross Domestic Product (GDP) grew by 0.3% in November, maintaining the resilience of the Pound. Meanwhile, the FTSE 100 is up by 0.8%. It is expected that US producer inflation will rise to 1.3% in December. The USD's reaction suggests that a significant increase in the PPI could influence a potential shift in monetary policy towards the end of the second quarter. Stay tuned for any updates. Regards, Nicola.
Long
by Forex48_TradingAcademy
3
EURUSD | Towards 1.08 today?The EUR/USD exchange rate is recording losses below 1.0900, marking five-week lows at 1.0862 on Tuesday. Investors are monitoring the US dollar and assessing the Federal Reserve's interest rate outlook amid persistent geopolitical risks, with a particular focus on US retail sales data. If the EUR/USD continues to decline and surpasses the 2024 low at 1.0861, it could reach the critical 200-day Simple Moving Average (SMA) at 1.0847, followed by the lows of 2023. The 4-hour chart suggests further short-term losses, with the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) indicating oversold conditions. Potential rebound attempts may encounter resistance at 1.0925 and 1.0998. The weakness of the euro has been influenced by the strengthening dollar, pushing the Dollar Index (DXY) to new 2024 highs beyond 103.00. Comments from European Central Bank (ECB) officials, contrary to investor expectations, have contributed to the situation. Market participants anticipate rate cuts by both the ECB and the Fed in 2024. The probability of a Fed rate cut in March is now at 70%. The decline in the euro's value has been influenced by rising yields, with German bunds reaching yearly highs. The improvement in Economic Sentiment in Germany and the broader Eurozone has not supported the European currency. In the United States, the Empire State Manufacturing Index significantly weakened to -43.7 in January. Greetings and have a good trading day to everyone from Nicola.
Short
by Forex48_TradingAcademy
1