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Pre-NFP Analysis | 9th March 2023Fundamental Context 1. Fed Powell's speech that "Fed is prepared to speed up rate rises if warranted by data releases", resulted in strong bullish pressure on DXY and USD across markets. 2. A few US data releases has coincided nicely with Powell's speech. 3. ADP Non-Farm Employment Change came out at 242000 jobs compared to a forecasted 197000 and 119000 previous. 4. JOLTS Job Openings came out at 10.82m compared to a forecasted 10.58m, beating expectations. 5. All eyes will be on NFP releasing tomorrow. 6. Given the recent strong USD fundamental news release, there is reason to believe that the NFP print will come out stronger than expected, which will highlight the resilience of the US economy once again. At Olympus Lab, we believe that the USD can continue heading bullish in the market. NOT FINANCIAL ADVICE DISCLAIMER The trading related ideas posted by OlympusLabs are for educational and informational purposes only and should not be considered as financial advice. Trading in financial markets involves a high degree of risk, and individuals should carefully consider their investment objectives, financial situation, and risk tolerance before making any trading decisions based on our ideas. We are not a licensed financial advisor or professional, and the information we are providing is based on our personal experience and research. We make no guarantees or promises regarding the accuracy, completeness, or reliability of the information provided, and users should do their own research and analysis before making any trades. Users should be aware that trading involves significant risk, and there is no guarantee of profit. Any trading strategy may result in losses, and individuals should be prepared to accept those risks. OlympusLabs and its affiliates are not responsible for any losses or damages that may result from the use of our trading related ideas or the information provided on our platform. Users should seek the advice of a licensed financial advisor or professional if they have any doubts or concerns about their investment strategies.
TVC:DXYLong
by OlympusLab
EURUSD:Couple of Scenarios depending on Friday's NFPHey Traders, above is a technical overview on EURUSD and the most important zones to watch, Fed yesterday have threw some hawkish comments "rates are likely to be higher than previously anticipated", but before the next FOMC we have a couple of events to consider. First of all NFP and next week CPI data. If NFP comes again above expectations that will signal more rate hikes from the fed and thus more USD strength and EURUSD downsides. If the numbers are normal that will not be enough for fed to hike rates massively. and for CPI it's the same story. Numbers above expectations will lead to a more restrictive monetary policy and normal number will slow down the pace. Feel free to ask any questions in the comment section. Trade safe, Joe.
by JoeChampion
53
XAUUSD 5TH MAR XAUUSD looking pretty similar to U.S. oil here for our Sunday analysis. We have a clear supply at the high of our swing, it's unmitigated with a clear level of imbalance. I'm looking for a clear bearish rejection from this zone to then look for either a run of the low on the larger time frame or a pullback from our demand areas highlighted below. If, for example, we don't hit this area of supply, I'll be looking for Long's from the areas of demand. Overall, both options add up to one move being overall sell off for gold. Current price action is bullish, so we need to see a clear reversal to confirm this. Make sure that you always use your confirmations to get into a trade and always be flexible with your analysis. Remember, sticking to your trading plan and consistently entering the same setups will bring you profitability. If you like this idea, drop us a boost and a comment down below. We hope you all have a profitable and successful trading week.
OANDA:XAUUSD
by PipSurfingSociety
BTC UPDATETwo scenarious to look out for... if the bulls take the horn we would see a recovery to test the 200 days moving average at around 23.3k. otherwise a breakdown would cost us another long wick down to 21.6k 🚨IMP Event to Watch in March 📈 - US CPI release on March 14th - FOMC meeting on March 22nd In the picture is also the Mt. Gox event. The distribution of funds to creditors of the defunct crypto exchange is set to kick off on March 10, 2023. Whats your perspective? do you think the bulls or bears would have more control over the market, cosidering these events and the overview market sentiment?
BINANCE:BTCUSD
by ReNLoG
USDCAD: Top of the range?Looking back over this pair, it's been ranging for a long time. The candlestick patterns are clearly showing rejection, we now have a doji to back up the change of direction potential. Fundamentally it seems hat it doesn't matter how good the US news is, the dollar's fate is sealed. Interesting to see how NFP goes on Friday (but still can't see it getting much past 105.5 even with positive news). I'll probably wait on this pair until after the event has calmed down before getting involved. Overall I'm bearish on this, waiting for a good entry for at least a 4:1 score initially, but think it'll go further.
Short
by Finchcliffe
1
DXY:A Temporary push to upsides as Yields riseHey Traders, today we have noticed a temporary push to upsides as treasury Yields near 5%, but that will not be enough to push DXY above the major trend again as we see the price have rejected the retrace zone along with the double top. so we expect that USD will resume the downsides and remain indecisive until the release of CPI so the market will have a more clear idea on Fed next actions. if CPI numbers are high that won't make fed happy so we'll expect further rate hikes and more of USD strength.. in the opposite sense if CPI numbers come low we can expect more of a weak dollar and less restrictive monetary Policy. Trade safe, Joe.
TVC:DXYShort
by JoeChampion
46
Sweet Divergence Since the start of January, most leading macro markets have experienced a reversal around their 38.2% Fibonacci retracement levels. However, BTC has shown resilience and fought the cross-asset sell-off. This divergence is likely driven by the fact that there has been over $1 trillion in net liquidity added to the market since the bottom in October, primarily driven by the People's Bank of China and the Bank of Japan, helping to off-set the damage the Fed is doing to risk-on assets such as the crypto market. Considering BTC tends to be somewhat of a liquidity sponge, it tends to outperform other assets when there is a boost in liquidity. However, the jury is still out on whether BTC's performance indicates the end of the bear market for crypto or a temporary outlier. Despite BTC's recent outperformance, it's still catching up to significant rallies in other markets between Q4 2022 and Q1 2023. An important note is that the S&P 500 has never seen a bear market bottom before the unemployment rate began to rise, and this is yet to be the case. Furthermore, the yield curve is currently the most deeply inverted it has been since the 1980s, ultimately signalling that long-term interest rates are lower than short-term interest rates. An inverted yield curve has been a perfect predictor of the last seven recessions since 1960, ultimately implying that it's likely the market isn't out of the woods yet. When yields and risk assets diverge, historical patterns suggest that other assets quickly catch up to the sell-off. Although yields have moved exponentially since last month's CPI data, markets expect them to stabilize at last year's high levels. It would likely take very hot inflation data and a significant rate hike following the next FOMC meeting on the 22nd of March to trigger the next leg lower for risk assets. Until then, BTC is expected to continue ranging, waiting for its next cue. In other news, a recent article by Forbes threw Binance into the fire after they released an alleged hit piece on the exchange and its founder, Changpeng Zhao (CZ). The article drew parallels between the exchange and the now-defunct FTX after Binance allegedly transferred $1.8 billion to hedge funds such as Tron, Amber Group and Alameda Research between August and December 2022. However, CZ then hit back at this, arguing that the article referred to some old transactions from Binance's clients. He then reiterated that the exchange always holds user funds 1:1 and that this can be referenced through Binance's proof-of-reserve system. From a technical perspective, it is clear from the weekly chart that Bitcoin has been trading between two significant demand and supply zones. The bulls will be hoping for a weekly close above the $25,000 supply zone, which would light the way towards the massive $28,800 to $30,000 resistance, the Head and Shoulders neckline. An important contributor to the bullish scenario is that EMA20 and EMA200 are beginning to converge, with a potential cross in the coming weeks. The importance of this should be considered, as EMA20 crossing below EMA200 back in September accurately predicted short-term market direction. Bears will rejoice at the fact that many traders believe that a final Elliot Wave 5 sell-off is to come. This would likely result in a break below the $15,500 - $16,500 November market bottom. As we advance, all eyes will be on the CPI data releases. U.S. CPI data on the 14th will likely dictate the outcome of the rate decision of the FOMC on the 22nd. Volatility will be high around these dates, so caution should certainly be exercised, especially in leveraged positions.
by Coinrule
2
US30 HTF Analysis & Prediction March 1st 2023February proved to be an interesting month for US30. Throughout the majority of the month, we traded sideways, ranging directly below the key price sensitivity level of 34000. This level had previously caused price reactions, and as buyers began to liquidate positions due to fear and anticipation of continued rate hikes and bad economic data, price began to range, indicating a potential shift in market sentiment. After pricing in the 25bps rate hike and higher than anticipated CPI data, price attempted to squeeze to the upside before rejecting and shifting momentum bearish, ending the month at another key support zone of 32500. As we approach the end of the first business quarter, we're hoping for a clearer market direction. The next FOMC meeting with Powell's tone could prove to be a deciding factor. If Powell brings a more hawkish tone and a 50bps rate hike supported by other negative US data indicating the fight against inflation is far from over, we could see a fall in US30, correcting the optimistic bullish run that ended 2022. However, we must remain adaptive, as more optimistic data and a dubbish tone from Powell with a lower than expected rate hike could result in bulls capitalizing and price beginning pullbacks before any sentiment shift. It's important to closely monitor market movements and adjust trading strategies accordingly.
U
by Itskaleel
1
DXY Outlook 27th Feb 2023On Friday, the US Core PCE price index was released at 0.6% (Forecast: 0.4%). As the Core PCE price index is a key inflation indicator for the Federal Reserve, a stronger-than-expected change signals that we could see further interest rate increases from the FOMC. This is also why following the news release, the DXY climbed steadily from the 104.65 price level up toward the 105.30 price area. Currently consolidating above the 105 price level, look for the price to retrace briefly (possibly toward the 104.80 level (supported by the horizontal level and the upward trendline) before resuming to trade higher again, toward the next key resistance level of 105.80.
TVC:DXYLong
by JinDao_Tai
GBPUSD: SHORTGO SHORT GBPUSD Entry: 1.19430 Stop loss: 1.20570 Take profit: 1.15700 Reason: he GBP has also benefitted from a hawkish repricing of BoE rate hike expectations thatwas driven by the paring back of recession risks for the UK economy. The strong pick-up in the UK PMI surveys for February signalled that growth likely continuesto hold up better than expected at the start of this year. The deterioration in global investor risk sentiment and broader USD rally has meant though that cable has still fallen back below the 1.2000-level
Short
by Yurino86
1
USDJPY: Increase expected but watch end of week JPY FundamentalsAs we see the DXY continue to push up thanks to the fundamentals and potent9ial for a 0.5% rate hike, I'm expecting this pair to continue to push up. Key fundamentals out of Japan this week with inflation data on Thursday, there's also a speech on Friday by incoming Governor Ueda, not expecting policy comment, but if we get some it will likely have an impact on USD and JPY pairs. Depending on the DXY this week, and some weakness I'm expecting to continue for JPY based on JPYWCU, I'd expect we may reach the 137.5 region / where the 50MA and 100MA look about to cross, and then a drop / retracement. We saw a bearish pinbar on the daily on Friday, which does suggest a drop first, however I think this could be misleading due to the USD sell-off on Friday ahead of the long weekend. I'll be getting in with a bullish indicator on a LTF, and then out around 137 or end of day Thursday (ahead of the JPY CPI), whichever comes first. Whatever I expect volatility at the end of the week for this pair, it could drop very quickly with the fundamentals so I'll trade carefully and book profits!
Long
by Finchcliffe
1
$USDJPY: Dollar reversal?I suspect we are seeing a large scale reversal in the dollar, which will be further confirmed if CPI favors renewed hawkishness surpassing current consensus estimates (consensus was already shaken by NFP yesterday, and would be further shocked if CPI allows Powell to keep hiking for longer than expected, or even do larger hikes as well). The BOJ governor change is looming as well, and with it the retirement of YCC apparently (yield curve controls). Overall, a decent trade if you need to hedge some equity risk in your portfolio or if you are an avid Forex trader already. Best of luck! Cheers, Ivan Labrie.
Long
by IvanLabrie
2
Value, Growth or neither?Looking at equity markets as a conflict between Value stocks and Growth stocks has become a reflex for many market commentators. ‘Growth is beating Value’ (or the other way around) is always a good headline. Value stocks are defined as basically cheap stocks and it is, therefore, possible in any index, to point to the Value side of that index. Growth stocks are defined as stocks with above-average growth prospects. So again, it is possible to look at an index and point to the growthiest stocks. The main index providers have done exactly that by splitting their main indices in two down the middle, a Growth and a Value version, as early as the 1980s. Using Value and Growth to explain the last ten years While simplistic and playing into human’s love of false dichotomies, it is true that this narrative explained the last ten years of equity performance pretty well. From the overwhelming domination of Growth stocks, in a negative interest rate environment where investment was cheap, to the start of a Value revival last year, on the back of the most aggressive tightening cycle in decades. What about the other factors? Didn’t Quality perform better over that period? However, most things in our world can’t be reduced to a simple choice. Academics have demonstrated over the last five decades that multiple other factors can be used to slice and dice the markets to create outperforming portfolios. In the 90s, Fama and French introduced their 3-factors model using Value but also Size and Momentum to explain market returns. More recently, they added Profitability (often called Quality) and Investment in a new 5-factors model. Looking at the performance of the seven leading factors over the last ten years, we note that while Growth beat the market by 1.6% per annum and Value underperformed by 1.9% per annum, the strongest factor was, in fact, Quality with an outperformance of 2.3% per annum1. Is Quality Value or Growth, then? Using Quality as a third lens, we observe that companies in the Value index are, on average, less profitable than those in the benchmark, and that those in the Growth index are, on average, more so. 23% of the S&P 500 Value exhibit less than 10% in return on equity (ROE) versus less than 5% for the S&P 500 Growth. And 25% of the S&P 500 Growth has more than 50% in ROE versus less than 5% for the Value index. However, what is fascinating is that in the Value index, there are still some very profitable companies and in the Growth index, there are still some unprofitable companies. In other words, the Value/Growth dichotomy is very different from the High Quality/Low Quality one. The market could therefore be split not into two indices (Value and Growth) but into four: High-Quality Value High-Quality Growth Low-Quality Value Low-Quality Growth Historically, High-Quality Value has outperformed High-Quality Growth Using academic data, it is possible to splice US equity markets since the 60s into groups by fundamental data. In Figure 3, we focus every year on the 20% of the universe with the highest operating profitability (that is, High Quality in Figure 3). That group is then split into five further quintiles depending on their valuations (using price to book (P/B) as a metric) from the cheapest to the most expensive. We observe that picking profitable companies with high P/B would have outperformed the market since the 60s but would have underperformed profitable companies in general. On the contrary, picking cheaper High-Quality companies would have outperformed both the market and the overall High-Quality grouping. In other words, Quality Value has outperformed Quality Growth over the last 60 years in US equity markets. Looking at other geographies, such as Europe, we find similar results. At WisdomTree, we believe that a well-constructed Quality strategy can be the cornerstone of an equity portfolio.High-Quality companies exhibit an ‘all-weather’ behaviour that offers a balance between building wealth over the long term whilst protecting the portfolio during economic downturns. However, in 2022, secondary tilts were incredibly important. Value stocks benefitted from central banks’ hawkishness, leaning on their low implied duration to deliver outstanding performance in a particularly hard year for equities. Among Quality-focused strategies, the one with Value tilt delivered outperformance on average, and the one with Growth tilt tended to underperform. Looking forward to 2023, recession risk continues to hang over the market like the sword of Damocles. While inflation has shown signs of easing, we expect central banks to remain hawkish around the globe as inflation is still very meaningfully above targets. The recent coordinated communication plan by Federal Reserve Federal Open Market Committee members is a further example of this continued hawkishness. With markets facing many of the same issues in 2023 that they faced in the second half of 2022, it looks like resilient investments that tilt to Quality and Value that have done particularly well in 2022 could continue to benefit. Sources 1 Source: WisdomTree, Bloomberg. From 31 January 2013 to 31 January 2023. Growth is proxied by the MSCI World Growth net TR Index. Value is proxied by the MSCI World Value net TR Index. Quality is proxied by MSCI World Quality net TR Index. The remaining 4 factors (Min Vol, High Dividend Small Cap and Momentum) are also proxied by indices in the MSCI families.
NASDAQ:NQFFUSQ
by aneekaguptaWTE
Momentum Setup // Pre-newsWe have a wicks to fill. One is at 1.06174. The Other wick is the Previous weekly candle low at 1.06120. We have momentum so most likely we will touch these prices at some point. We are trading 2 hours before news here. Ultimate target on week on 1.055. Additionally, I think FOMC will help provide a catalyst to take us lower. We may pullback hard first, for liquidity. So be aware of price spikes as we walk into news. Momentum , with regard to Price Action, is explained in the previous post. If we look at Weekly/Daily timeframes we see all red or what we interpret as rejection wicks, which aligns with our bias.
Short
by ShrewdCatfx
1
AUD/USD rises on strong capital spendingThe Australian dollar has rebounded on Thursday, after a 2-day slide in which AUD/USD lost 100 points. In European trade, AUD/USD is trading at 0.6830, up 0.37%. On Wednesday, the Australian dollar fell to 0.6794, its lowest level since Jan. 6. Australia's private capital expenditure jumped 2.2% q/q in Q4 2022, rebounding from 0.6% in Q3 and above the estimate of 1.3%. Building capex sparkled with a 3.6% gain, after declining by 1.6% in the third quarter. The strong numbers have pushed the Aussie higher on Thursday. The capex release comes on the heels of wage growth, which slowed to 0.8% q/q in Q4 2022. This was lower than the 1.1% gain and the estimate of 1.0%. On an annualized basis, wage growth edged up to 3.3%, up from 3.2% but lower than the estimate of 3.5%. The RBA is keeping a close eye on wage growth, concerned that stubbornly high inflation could trigger a price-wage spiral that would entrench inflation expectations and complicate efforts to curb inflation. The FOMC minutes reiterated what we've been hearing from Powell & Co. for months. FOMC members said there were signs that inflation was heading lower but more rate hikes were needed to bring inflation back to the 2% target. The minutes noted that the labour market remains robust, which is contributing to continuing upward pressures on wages and prices." It should be noted that the minutes are somewhat stale, given the blowout employment report and the jump in retail sales which were released after the February meeting. These releases point to a surprisingly resilient US economy and could mean that members will become even more hawkish. An important takeaway is that although the vote to hike by 0.25% was unanimous, two members (Bullard and Mester) saw a case for a 0.50% increase. The markets widely expect another 0.25% hike in March, but the host of unexpectedly strong releases in recent weeks has raised the likelihood of a 0.50% move. We can expect market pricing to continue to shift as the US releases key data in the coming weeks ahead of the Mar. 22 meeting. AUD/USD has support at 0.6784 and 0.6690 There is resistance at 0.6907 and 0.7001
by OANDA
USD Index Targets 104.820 After US Federal Reserve Meeting?We have learned that almost all US Federal Reserve officials backed a 25-basis-points rate hike at the last FOMC meeting held on January 31 to February 1. Only a few officials favored a larger 50-basis-points hike at the meeting or said they "could have supported" it. Even so, many more dovish sentences were spoken in the latest meeting than compared to the December meeting. Although, officials did not go as far to consider a pause in rate hikes. The only time this topic was broached was in reference to foreign central banks and their potential strategies. Of course, the meetings also showed the obligatory note that, although the rate hikes have started to ease inflationary pressure, officials agreed that there was much more work to do to get inflation under control and were definitely aware of the risk of not doing enough, so the drip of dovish language will likely continue for some time before a dovish outlook overtakes a hawkish. Especially, because the meeting took place before the release of the hotter-than-expected jobs and retail sales data from January. This might go some way in supporting the USD in the short to medium term. Looking at the DXY after the release of the minutes, it looks to have helped the USD index push into the mid 104s, where it is encountering some resistance. The index only has to break into 104.700 to eclipse its recent one week high and return to its month high. A target above this range could include 104.820, which aligns with the 200-EMA and some peaks reached in January.
TVC:DXY
by BlackBull_Markets
1