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Greenback slows down for next Fed rate decisionEUR/USD 🔼 GBP/USD 🔼 AUD/USD 🔼 USD/CAD 🔽 XAU 🔼 WTI 🔽 US and Germany have recorded minor contractions in their respective economies at 0.6 and 0.1% respectively, with optimistic projections expecting growth to reappear in the short term. The greenback retreated slightly against other major currencies, EUR/USD slightly moved up to 0.9974, and the British Pound closed at 1.1829 with minor gains. The Chinese government has promised more stimulus packages to boost its economy, sending AUD/USD to 0.698 with minor oscillations. Although the US bond yield curve is still inverted, investors anticipated another rate hike from the Federal Reserve in September, USD/CAD then closed at 1.2924 and recovered to 1.2953. Gold futures took up the role of an inflation hedge, increasing to $1,778.2 an ounce, only to fall to $1,771.4 afterward. As the final draft of the nuclear deal is ready, awaiting Iran’s confirmation, the possible daily injection of 1 million barrels of crude oil into the market once again saw WTI oil futures dropping to 92.52 and stabilizing at 93.00. Later today, the US Core PCE Price Index and a speech from the Fed’s Chairman Jay Powell could prove to be insightful, but they are unlikely to confirm market bets of a 50 or 75 bps rate hike next month. More information on Mitrade website.
by Mitrade_official
ALERT - Top and DropTraders, Is This One Key Indicator Telling Us That it is Time to Buy Again? For the last few weeks, you’ve heard me sus out my thoughts on the dollar potentially double-topping and then dropping. Heh, top and drop. Should be a song title. Anywho, a double-top is precisely what the dollar has done thus far. Is this signaling to the markets that it is finally time to buy or will the fed continue to tighten the noose on the markets? I think you all know where my bets lie. And thus, I thought it worthwhile to put out a quick post here regarding the topic. If you’ve watched any of my videos, you’ve all seen this chart before. The RED highlighted area is, of course, my anticipated price action for the dollar, which is currently a key and leading indicator for the markets along with the VIX (fear index). When the dollar drops (becomes weaker), this weakness is often added to the market growth and appears as strength. Essentially, it is simply the market’s attempt to factor in inflation. Strength in the dollar often negatively impacts the market and denotes deflationary pressures, in this case, coming from the fed. The VIX has been dropping since mid-June. And now, I expect the dollar may follow suit. If so, we may have a huge buy signal flashing in front of our eyes. Let’s watch this closely and trade accordingly. Best to you all! Stew
TVC:DXYShort
by stewdamus
Market split bets on the next Fed rate hikeEUR/USD 🔽 GBP/USD 🔽 AUD/USD 🔽 USD/CAD 🔼 XAU 🔽 WTI ▶️ There is a month between now and the next US Federal Reserve interest rate decision and the investors are undecided about how high it would be. Given the falling gas prices, strong labor market, and the looming recession, the US central bank could favor a 50 bps rate hike. On the other hand, the latest comments from Fed officials maintained they are adamant about controlling inflation to 2%, hinting at another 75 bps rate hike. As a result, the greenback extends its strong run against its peers. EUR/USD slid to 1.0034, and despite having slightly optimistic retail sales readings, GBP/USD stabilized at 1.1820 and closed at 1.1827. The Aussie was held back by a sluggish Chinese economy, AUD/USD went below 0.7000 to 0.6872, while USD/CAD climbed to 1.2993 and edged towards 1.3000. With another rate hike marked on the calendar, gold’s safe haven status was overshadowed by the US dollar, gold futures declined to $1,762.9 an ounce. Oil prices were stuck between prospects of Iranian oil entering the market and a possible recession, which ended up closing at $90.44 with little change. In US stocks, Bed Bath & Beyond (BBBY) enjoyed a rapid rise that reached meme status, but it just lost 40.54% of its market cap, after a major shareholder sold his entire stake. More information on Mitrade website.
by Mitrade_official
A Bearish Call On Financial Markets and The Global Economy China/Europe/EM: The UK and the entirety of Europe are in trouble. The UK now experiencing double-digit inflation and to make matters worse they are facing extreme weather and an energy shortage going into the winter. All the while Putin's war is complicating European energy supply and political ties even further. China is experiencing civil unrest, mostly thanks to an ugly property crisis. China also is experiencing lower-than-expected GDP growth. China's economy slowing has large implications given its massive presence in global trade. Emerging markets are struggling partly due to an incredibly strong dollar as well as a tight global food/energy supply. US: The US housing market is in a recession with 6 straight months of declining sales and more importantly a monthly decrease in median home prices for the first time in years (the housing market gets hit first by rising rates… remember 08?). US consumer credit I.e., debt levels, are through the roof. Signaling that the consumer might not be as strong as market commentators are saying. Layoffs are increasing steadily, while inflation is staying high. I am bothered to see the number of peak inflation calls after just ONE MONTH of zero gains in headline inflation. The FED is now in a lose-lose scenario where they can continue to aggressively tighten and bring down this wildly levered up global economy or back out and try to save the issue for a later date. The latter would cause additions to the size of their already immense balance sheet and create an ultra-severe recession later down the line. Either way, the recent rate hikes have not at all been fully felt by markets, and add on the possibility that the FED truly commits to QT, then a few quarters down the line we will start to see a serious weakening of market conditions across the board (equities, bonds, real estate, you name it). Forecast: Risk assets globally are going to get decimated during the next several months of trading, especially low-quality speculative names. Crypto investors should prepare to see some nasty losses, BTC to 9800, and ETH to 575 seem attainable in the medium-term. S&P 500 will NOT make any substantial or sustainable gains over the 4300 mark, 3500 is my next low target. Nasdaq 100, like crypto, is in for a large selloff, next target: 10,200. VIX will rise substantially, and could easily double from current levels. The dollar will stay higher as US rates rally upward, likely well higher than markets currently have priced in. Some commodities will make new highs- nat gas- while others like oil are poised to depreciate modestly but remain historically high. Low/non-profitable, high debt companies- Wingstop and its zombie cohorts - are at high risk of bankruptcy in the coming quarters. Widespread bankruptcies are on the horizon. Things look a little too good to be true right now in financial markets… well that's because they are. On the bright side, this bear market bounce of the past 60ish days has provided a good opportunity to exit risk assets, load up on cash and begin to add on to short positions. As always this is not financial advice. Good luck!
ECONOMICS:USCCR
by Gooby_Trades
3
USD/JPY eyes Japanese CPIIt hasn't been a good week for the Japanese yen, as USD/JPY has climbed 1.24%. The yen is almost unchanged today, trading at 135.16. Japan wraps up the week with a key inflation release on Friday. Core CPI is forecast to rise to 2.5%, up from 2.2% in June. Japan's inflation rate is much lower than what we're seeing elsewhere, such as double-digit inflation in the UK. Still, after decades of deflation, inflationary pressures are a whole new world for Japanese policymakers, and the Bank of Japan is having to keep an eye on inflation, which is slightly higher than the central bank's inflation target of 2%. Unlike the Fed and the Bank of England which have declared inflation as public enemy number one, the BoJ is focused on stimulating the weak economy with an accommodative policy. That has meant being vigilant to keep JGB at low rates, even if this has resulted in a widening of the US/Japan rate differential and the yen falling close to 140 in July. Until the BoJ is convinced that inflation is not transient, a tweak or two is all we can expect with regard to monetary policy. The Federal Reserve minutes on Wednesday were essentially a rehash of the Fed's hawkish message; namely, that inflation has not been beaten and rate tightening will continue. Meeting participants said that the pace of rate hikes could ease once it was clear that inflation was easing, adding that there had not been signs of that so far. This is a very different take than the markets, which were practically giddy after US inflation dropped unexpectedly in July. The Fed has pledged to keep raising rates, but the markets are marching to their own tune and appear to be expecting a U-turn in policy, which has sent the equity markets higher and the US dollar lower. 135.46 is under pressure in resistance. Next, there is resistance at 1.3744 There is support at 133.60 and 131.62
by OANDA
Pound recovers losses after jobs reportThe British pound remains under pressure. In the North American session, GBP/USD is trading at 1.2055, unchanged the day. The pound fell as low as 1.2007 in the Asian session, just above the symbolic 1.20 line. The economic outlook in the UK is grim and today's employment report didn't bring any cheer. Unemployment claims continue to fall and the labour market remains strong, but wage growth indicates trouble. Wages dropped to 5.1% in June, down from 6.4% in May. However, real wages (adjusted for inflation) actually fell by 3% in Q2 on an annualized basis, a new record. The cost of living is thus increasing at an even faster rate and is far outpacing wage growth. The headline wage growth reading of 5.1%, which is not adjusted for inflation, may have fallen, but still remains high and will likely force the BoE to continue hiking aggressively. The BoE has forecast that inflation will hit a staggering 13% this year, and the last thing it needs to contend with is a wage-price spiral, which could entrench inflation. The markets won't have much time to dwell on the employment numbers, with the inflation report being released on Wednesday. Headline CPI is expected to accelerate to 9.8% in July, up from 9.4% in June. If inflation pushes higher than the estimate, it could be a nasty day for the pound.  The Federal Reserve continues to send out the message that its rate hikes are far from over as the battle against inflation will continue for some time yet. The markets expect the Fed to raise rates to a peak in a range of 3.50% - 3.75%, well above the current benchmark rate of 2.50%. Despite this hawkish stance, the financial markets don't seem to be listening. US equity markets have been rising, while the US dollar, which should be benefitting from a hawkish Fed, is struggling. The lower-than-expected July inflation report of 8.5% raised risk sentiment and sent the dollar tumbling. If inflation resumes its upward trend in August, risk appetite could evaporate and the dollar might have the last laugh. GBP/USD is testing support at 1.2030. Below, there is support at 1.1925 There is resistance at 1.2153 and 1.2258 
by OANDA
MSFT Short position Much to the surprise of many investors, this month has seen stocks continuing to rally. A bullish rally can be identified using swing high and low underlying price points since the start of July. The golden dotted line presents this, indicating upward underlying price movements. During this period MSFT saw lows of $243 and highs of $293. Currently trading above 20, 50, 100 and 200 day ranged EMA levels, the underlying valuation of the stock is suggested to be overvalued given that it’s trading above these averages. When trading above all EMA levels, investors should anticipate a correction, back in line with these moving averages. When using a 1-week ranged Fibonacci investors can see that the stock is currently trading in line with its weaker 0.382 resistance level: a price of $293. Based on bullish momentum, we anticipate this resistance level to strengthen. We anticipate the stock to reach it’s stronger 0.786 resistance level: a price of $298. The investor should look to buy around this price. Once the underlying price of the stock reaches this point, it is reasonable to anticipate a correction towards its support. Therefore, we have set a sell price in line with the 100-day ranged EMA and stronger 0.786 Fibonacci support level. The buyer should sell at $275.
NASDAQ:MSFTShort
by vf_investment
1
Pound steady ahead of UK GDPThe British pound is trading quietly today, after posting sharp gains on Wednesday. In the North American session, GBP/USD is trading at 1.2220, up 0.02% on the day. US inflation surprised on Wednesday, as both the CPI and the core CPI readings were lower than expected. Headline CPI dropped sharply to 8.5%, down from 9.1% in June and below the estimate of 8.7%. Core CPI remained steady at 5.9%, below the forecast of 6.1%. After months of inflation climbing higher, there was palpable relief in the markets as the headline reading finally broke the upward trend. The US dollar was roughed up, dropping sharply against the major currencies. GBP/USD rose an impressive 1.19% yesterday. The Federal Reserve is breathing easier as inflation has finally slowed, and it is more likely now than 24 hours ago that the Fed will ease up on rate hikes and deliver a 0.50% increase in September rather than a 0.75% hike. Nevertheless, it would be premature to declare that the inflation dragon has been slayed and the Fed will soon pivot with regard to rate policy. The inflation rate of 8.5%, although lower than last month, is still close to a four-decade high. Inflation fell chiefly due to a drop in gas prices, but with the volatility we are seeing in the oil markets, gasoline could quickly change directions. Perhaps most importantly, inflation remains broad-based; the core reading, which excludes food and energy costs, remained steady at 5.9%. Fed members left no doubt that despite the positive CPI report, more tightening was on the way. Minneapolis Fed President Kashkari said that the Fed was "far, far away from declaring victory" over inflation, and Chicago Fed President Evans said that inflation remained "unacceptably" high. With the Fed looking to increase the benchmark rate to 4% or higher by the end of 2023, there is plenty of shelf life remaining in the Fed's rate-tightening cycle. In the UK, the week wraps up with Friday's GDP report for Q2. The markets are bracing for a soft release - GDP is expected to slow to 2.8% YoY, down from 8.7% in Q1. On a quarterly basis, GDP is projected at -0.2%, following a 0.8% gain in Q1. The pound received a huge lift on Wednesday courtesy of US inflation. If GDP is weaker than expected, the pound will likely lose ground. GBP/USD continues to test resistance at 1.2241. Next, there is resistance at 1.2361   There is support at 1.2123 and 1.2061
by OANDA
Bitcoin Is That a Bullish RSI Breakout?It feels like ages since I last wrote or thought about a bullish breakout in bitcoin. The market has been bad, as we all know. But I see signs of green shoots now, at least on technical charts. For instance, the relative strength index, the darling indicator of experienced and tyro traders, is crossing above the year-long-downtrend line on the three-day candlestick chart. Ya, you read that right. On the three-day chart, every candle represents three days. The latest candle will end on Aug. 13! The RSI needs to confirm the breakout on Aug. 13. The question now is whether we should trust the breakout; after all, indicators are based on prices. I think we should, given the CPI released yesterday has strengthened the narrative that inflation has peaked (even though nobody knows it has), and swap markets have priced out bets for 75 basis point hikes by the Fed in September. The dollar is falling as I write, the Ethereum merge trade is alive and kicking and the 10-year real yield (FRED: DFII10) seems to be forming a head-and-shoulders pattern. So, a continued rally toward $30K looks likely. That said, I would building aggressive longs for two reasons: Bond markets are not buying the peak inflation narrative. The 10- and two-year yields ended mostly flat on Wednesday. The Fed is set to accelerate balance sheet shrinkage from next month. So, remain flexible and ditch longs if prices fall below $24,000. I would go short if prices drop below $22,600, that would imply a re-test of the yearly low of $17,567. Also go short if the current 3-day candle closes under $24K.
COINBASE:BTCUSD
by OmiFX8
A Tale of Two Americas CME:LE1! The U.S. Bureau of Labor Statistics (BLS) released July non-farm payrolls on August 5th and July Consumer Price Index (CPI) on August 10th. Both reports beat market expectations. About 528,000 new jobs were created in July, well above June level. Annualized Inflation was lowered to 8.5% from the record 9.1% in June. While strong jobs data and taming inflation show the resilience of US economy, worrying signs are emerging. There are strikingly different faces of America: 1) People with jobs and those without; 2) Financially sound public companies and struggling small businesses; 3) Commodity prices that are under control, and those still flying high. July Non-farm Payrolls According to the Census Bureau, US population was 332 million in January 2022. Civilian Labor Force data reported by the BLS was 164 million in July, 49% of total population. It appears that the non-farm report shows us only half of the country. America: People with Jobs Total number of non-farm employees was 158 million in July. Of the half-million new jobs created, Leisure & Hospitality contributed to 96,000 (18%), while retail, wholesale, transportation, and warehousing together accounted for 42,000 (8%). Service-sector jobs tend to be low-pay, part-time and/or without benefits. Health care and Government created 70,000 (13%) and 57,000 (11%) new jobs, respectively. Since 2020, the Federal government has spent trillions to fight the pandemic and rescue the economy. These jobs were funded by budget, not by growing demand of a free market. Although American consumers continue to support the economy, low-income earners are struggling with rising costs of housing, food, transportation, and household necessity. America: People without Jobs Officially, the U.S. had 5.7 million unemployed persons in July. It is very misleading. According to the July report, “The number of persons not in the labor force who currently want a job was 5.9 million in July. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.” If we take both into consideration, the total number of unemployed people would be 11.6 million, with real unemployment rate at 6.8%. Additionally, more than half of the population is not included in the labor force, who count children, housewives, retirees, military members, adult students, and US citizens living abroad among them. People without jobs still have living expenses. They may be supported by working family members, government programs, or charities. They are the most vulnerable when the economy turns south. Retirees with fixed income are also being hit hard. With rising price, they sometimes must make the hard choice between food, medicine, and filling up the gas tank. Now, let’s turn our focus to American businesses. American Business: Public Companies From the pandemic triggered selloff in March 2020, the S&P 500 rebounded and doubled its value to 4800 last December. In 2022, the index was down 24% in the first six months. It has since recovered half the losses, down just 11% year-to-date as of August 10th. Based on data compiled by Liberated Stock Trader, these 500 publicly traded companies employed 28 million people worldwide. Walmart (WMT) is the biggest employer with a 2.3 million workforce. Amazon (AMZN) came in 2nd, with 1.3 million employees. On average, S&P component companies have 56,000 employees. With the ability to produce and distribute their products around the world, Big Businesses could withstand the impact of higher cost or adverse policy better than most companies. According to WSJ data, as of August 5th, the trailing 12-month Price/Earnings Ratio (P/E) is 22.6 for S&P 500. Forward P/E is 18.2. Market expects S&P component companies to have lower earnings, but the impact of pending recession is not very significant. American Business: Private Companies Let’s start off by saying that I do not have comprehensive research on private businesses. Since most readers could only invest in the secondary market, we could use the Small-Cap Russell 2000 index as a proxy to mainstream American businesses. Russell has a YTD return of -12%, about 1% below the S&P. In the past five years, Russell underperformed S&P by 28%. Small-Cap stock performance is especially weak at time of market turmoil. A big difference is in the P/E ratio. Russell has a trailing P/E of 68.9, but the forward P/E sharply drops to 22.6. In good times, Small-Cap stock price have been inflated a lot more than the Blue-Chip. I expect their price to deflate faster in the pending recession. July CPI Data July CPI is unchanged from June month over month (M/M), and up 8.5% year over year (Y/Y). Core CPI, which excludes food and energy, is up 0.3% M/M and +5.9% Y/Y. Diving in the data by commodity category shows a different picture. Food: Up 1.1% M/M in July from 1.0% in June. Annualized food inflation is now 10.9%. Energy: Down 4.6% M/M, of which, gasoline, -4.6%; diesel, -4.7%; natural gas, -3.6%. Annualized energy inflation remains uncomfortably high at +33%. Gasoline price is 45% higher Y/Y after 50 days of consecutive price cuts. Commodities (excluding food and energy): Up 0.2% M/M and 7.0% Y/Y. CPI data M/M and Y/Y for selected products is: New cars, +0.6% and +10.4%; Used cars, -0.4% and +6.6%; Clothing, -0.1% and 5.1%; Pharmaceuticals, +0.6% and +3.7%. Services (excluding energy): Up 0.4% M/M and 5.5% Y/Y. CPI data M/M and Y/Y for selected service categories is: Housing, +0.5% and +5.7%; Transportation, -0.5% and +9.2%; Medical, +0.4% and +5.1%. Overall, inflation is lower in July only because the sharp decline in energy prices offset the price gains in food, housing, new cars and medicine . Investors' thrill in the stock market may be gone when they go the supermarkets after work. There are signs that consumers are downgrading their food purchases in the face of runaway inflation. Firstly, people tend to give up dining out in favor of cooking at home to save money. In July, food at home inflation was +1.3% M/M and +13% Y/Y. Price inflation for food consumed away from home increased at a slower pace, up 0.7% M/M and 7.6% Y/Y. There is a 5.5% spread, which impacts food spending at these two segments. Secondly, meat purchases show an apparent shift toward less expensive options. In July, beef price inflated 3.4% Y/Y, while pork was up 7.6% and chicken up 17.6%. Within each meat category, lower cost products also show higher inflation, indicating more demand. For example, ground beef was up 9.7% Y/Y, while steak price was down 1.5%! Bearish Trade Ideas With the headwind facing American economy, I think that a recession is inevitable. Based on the above analysis, I recommend shorting the Russell 2000. A 60+ P/E is too rich a valuation. The index could crash harder than S&P during an economic downturn. We could consider shorting the CME Micro E-Mini Russell 2000 December contract (M2KZ2) . Each contract is $5 x Index. At current quote of 1,974, each contract has a notional value of $9,870. CME requires initial margin of $550. Another idea is on beef prices. American consumer generally eats more beef while dining out. With the shift to cooking at home and buying cheaper meat, I expect beef prices to fall faster than pork price during a recession. We could short the CME Live Cattle December contract (LEZ2) . Each contract is 40,000 pounds of cattle. At current quote of 150.575, each contract has a notional value of $60,230. CME requires initial margin of $1,600. The futures market is extremely volatile this year. Getting an information edge increases your odd of success. I suggest my readers to subscribe to CME market data. TradingView users already have access to delayed data. A Pro user could upgrade to real-time CME market data for only $4 a month, a huge discount at the time of high inflation. 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:LE1!Short
by JimHuangChicago
5
GBP/USD soars as US inflation fallsThe British pound has surged in today's North American session. GBP/USD has jumped a massive 1.20% on the day and is trading at 1.2218. The economic calendar is very light on both sides of the pond today, but that didn't matter as today's US inflation report has sent the US dollar on a nasty slide. The July data saw both the headline and core readings come in lower than expected. Core CPI remained steady at 5.9%, lower than the forecast of 6.1%. However, the real news was the headline reading, which dropped to 8.5%, down from 9.1% in June and below the estimate of 8.7%. It is of course too early to talk about a peak in inflation based on one reading, although readers may see some headlines trumpeting just that. Still, the markets have responded with vigour, sending the US dollar sharply lower on the assumption that the Fed can ease its rate hiking, possibly to a 50 basis point hike in September. It wasn't long ago that a 50bp rise was labeled "supersize", but times have changed and with central banks raising rates by 75 and even 100bp, a 50bp move is almost modest. The Fed is breathing easier today and is hoping that inflation is on its way down, after relentlessly accelerating. This is also good news for President Biden, as voters have been hit hard by the cost of living crisis and may well take out their anger on the Democrats in the mid-term elections. I'm assuming Biden will not credit his brand new Inflation Reduction Act as the reason that inflation has fallen, but there's no doubt that the drop in inflation is great news for the White House. The pound certainly got a fortuitous break as US inflation fell and has taken advantage by rising sharply. It could be a very different outcome on Friday, as the markets are braced for a downturn in the UK economy. GDP is expected to slow to 2.8% YoY, down from 8.7% in Q1. On a quarterly basis, GDP is projected at -0.2%, following a 0.8% gain in Q1. If GDP is weaker than expected, a fall in the pound is a strong possibility. GBP/USD is testing resistance at 1.2241. Next, there is resistance at 1.2361  There is support at 1.2123 and 1.2061
by OANDA
Euro edges higher despite soft confidence dataThe euro has started the week in positive territory. In the North American session, EUR/USD is trading at 1.0217, up 0.36% on the day. The week wrapped up with a superb nonfarm payroll report, which sent the US dollar broadly higher. However, the gains proved to be short-lived, as the euro has recovered most of Friday's losses. The July nonfarm payroll report posted a blowout gain of 528 thousand, crushing the estimate of 250 thousand, and improving on the solid June release of 398 thousand. Unemployment ticked down to 3.5% from 3.6%, and wage growth remained unchanged at 5.2%, ahead of the forecast of 4.9%. The nonfarm payroll release was certainly impressive, but the Federal Reserve may be less than enthusiastic. Why? Since the data points to a tight labor market, especially the sharp gain in wages, as firms continue to experience labor shortages and must sweeten their compensation in order to attract employees. At 5.2%, wage growth is far higher than the Fed's inflation target of 2%, and Fed policy makers are concerned about a wage-price spiral which could increase inflationary pressures and force the Fed to remain hawkish. Fed officials were already pushing back against the idea that the rate-hike cycle was almost over, and with the latest employment numbers, the Fed may feel the need to remain aggressive and respond with another supersize 0.75% increase at the next policy meeting in September. Fed Chair Powell has said that the Fed will be data-dependent as it considers its next move, which means that upcoming inflation and employment reports will be crucial and carefully monitored by the markets and Fed officials. The eurozone could well face a recession, as Germany, the bellwether of the bloc, has posted weak data which is raising concerns. With a possible energy shortage this winter due if Russia decides to turn off the tap, the economic outlook is troubling. Unsurprisingly, German and eurozone confidence indicators have been pointing downwards, a reflection of uncertainty and pessimism. Earlier today, Eurozone Sentix Investor Confidence for August came in at -25.2, a bit better than the July reading of -26.4 but shy of the estimate of -24.7. This indicator has been mired in negative territory for a sixth straight month, pointing to prolonged pessimism amongst financial experts. EUR/USD is testing resistance at 1.0199. Above, there is resistance at 1.0274 There is support at 1.0103 and 1.0028
by OANDA
GBP/USD slides as Nonfarm Payrolls surgesThe British pound is falling sharply in the North American session, after a massively strong US nonfarm payment release. GBP/USD is trading at 1.2040, down 0.98% on the day. It wasn't so long ago that US nonfarm payrolls was one of the most anticipated events on the economic calendar and often had a significant impact on the movement of the US dollar. That has changed in the new economic landscape of red-hot inflation and central banks raising interest rates practically every month. The markets seem more absorbed with new inflation records and the threat of recession, which may make for more catchy headlines than labor market statistics. Today, however, NFP demonstrated its ability to be a market-mover. The July gain of 528 thousand crushed the estimate of 250 thousand and follows the June release of 372 thousand. The US dollar has responded with strong gains against the majors, as a strong labour market will enable the Fed to remain hawkish with its rate moves. The BoE was widely expected to raise rates by 50bp, and the central bank did exactly that. The MPC vote was 8-1 in favour, with one member voting for a 25bp hike. This split shows that Governor Bailey appears to have the MPC members in line, which should bolster Governor Bailey's credibility. With inflation hitting 9.4% in June and no sign of a peak, the BoE has been accused of raising a white flag with regard to inflation. The 50bp increase, the biggest in 30 years, is an important step in fighting inflation, which has hit 9.4% and shows no signs of peaking. Even with this hike, the Bank Rate is at 1.75%, well behind the Federal Reserve, the central banks of Canada and New Zealand and others. The BoE's rate increase was accompanied by a stark warning of a prolonged recession, and the pound responded with losses. The pound managed to recover these losses but it is clear that the currency isn't getting any support from the BoE's rate moves, with such a huge gap between inflation levels and current rates. Investors were also less than impressed as the BoE said that it might ease up on raising rates in the coming months. Governor Bailey has said he would be forceful in combating inflation, but the message that the central bank doesn't plan to be forceful with its forward guidance is weighing on the pound. GBP/USD is testing resistance at 1.2128. Next, there is resistance at 1.2295  There is support at 1.2010 and 1.1876
by OANDA
XAUUSD - KOG REPORT - NFP!KOG Report – NFP This is our view for NFP today, please do your own research and analysis to make an informed decision on the markets. It is not recommended you try to trade the event if you have less than 6 months trading experience and have a trusted risk strategy in place. The markets are extremely volatile and can cause aggressive swings in price. We’re going to keep this short this time as we don’t really want to get stuck around this price point if there is a move to come during NFP and the US session. We’ve done well this month so far with most of our targets being hit and the move on Gold that was illustrated in our reports now being completed. For us this is a short region, however, we have NFP so it’s thrown a bit of a spanner in the works. For that reason we have plotted the higher levels on the chart that we feel would represent price regions to short from and the lower levels we feel would represent an opportunity to long from. The key resistance here is that 1795-1806 level which has been used previously to propel the price in either direction so there is a possibility of a spike into that area before then coming down and then coming back up at some point. A break of this level and you can see the higher levels that we have illustrated, the highest one around 1825-35 is our preferred choice to short if it goes there! When it comes to the lower levels, we’re looking for the price point of 1775 as a key region which if broken should take us down into that lower level shown where, based on strong support we feel an opportunity to take the long trade back up could be on the cards. Please note, this chart is for NFP only at the moment, and that’s if the price moves. Lately, we’ve seen most NFP’s and FOMC are priced in and we don’t get much of a chop in the markets. In summary, we’ve been following the same plan for a few months now and will remain with it. We can see a push to the upside at some point into that 1825-35 price point, so please keep this level in mind! Please do support us by hitting the like button, leaving a comment, and giving us a follow. We’ve been doing this for a long time now providing traders with in-depth free analysis on Gold, so your likes and comments are very much appreciated. As always, trade safe. KOG
FX:XAUUSD
by KnightsofGold
13
USD/CAD eyes Canada, US job reportsIt's a busy day in both Canada and the US, with both countries releasing July employment reports. It wasn't so long ago that US nonfarm payrolls was eagerly anticipated and was the most important event of the week. The NFP often had a significant impact on the movement of the US dollar. That has changed in the new economic landscape of red-hot inflation and central banks raising interest rates practically every month. The NFP has been overshadowed as the media breathlessly reports new inflation records and the threat of a recession. Still, the NFP remains an important indicator and a surprise reading can still shake up the markets. The July NFP is expected at 250 thousand, following a surprisingly strong June release of 372 thousand. A weak reading will raise concerns about a recession, which would likely see US yields and the US dollar fall. Conversely, a stronger than expected number would probably boost yields and the US dollar, as a stronger labour market would allow the Fed to remain hawkish regarding rate policy. The markets have priced in an inflation peak and the Fed winding up its rate-tightening cycle, which has sent the US dollar on a hasty retreat. Fed policy makers have been pushing back, sending out the message this week that there are more large hikes on the way as inflation is not yet under control. A strong NFP reading would reinforce the Fed's message and provide some support for the US dollar. Canada will also publish employment data later today. The economy is expected to have created 20.0 thousand jobs in July, after a decline of 43.2 thousand in May. A stronger-than-expected reading should boost the Canadian dollar, while an underperformance could result in the currency losing ground. As well, Canada releases Ivey PMI. The indicator slumped to 62.2 in June, down from 72.0, and is expected to slow to 60.3. A surprise reading could have an impact on the direction of USD/CAD in the North American session. USD/CAD is putting pressure on 1.2899. Above, there is resistance at 1.3002 USD/CAD has support at 1.2741 and 1.2686
by OANDA