GBP Strength?News came out on Forex Factory, a News article regarding the Bank of England. Apparently they are going to raiser interest rates for the Second Month in a row. The last time they did this was 2004. This is a big deal because of the cost of money has increased. This can be attributed to the Federal Reserve for adding more Poker Chips to the Table. Inflation. We have moved bullish nearly 100
pips since this rumor came out. Looks like people are buying the rumor. I believe this news may be a catalyst for a more bullish next few weeks. It may encourage bullish sentiment in the markets, continurbting to a rebound in other risk on assets. possibly the dollar cools down. anyways, cheers everyone. Like and Follow for more content like this
Interestratehike
EURO Rate Hike Expected on Feb-3-2022 /// Currently Jan-31-22We have seen a news release come out on forex factory around NY open about the expected Interest rate decision by the Bank of England. It turns out that it is indeed expected of the BOE to raise interest rates for the second time in a row. This has not occurred since 2004. This is positive news for the EURO as inflation is not necessarily a bad thing. The cost of money goes up in England, because apparently the economy can handle it, in the eyes of the BOE. This is why it is positive. But personally, I don't hear about wages going up a whole lot. Workers are the backbone of the Economy. Bit concerning. Unsure where price will go from here. Not going to be doing much EURUSD trading as we lead up to the IR announcment on thursday.
I'm leaning Bullish
I would like to see the Daily candle close solid bullish , as it looks to close in 1Hr, (our first daily close of the week)
This would begin our fakeout structure here on EURUSD on the Daily Timeframe
Stock Index selloff and key levels to watch on major marketsA rally in crude oil triggered more concern into inflation and interest rate rises which saw a stock market selloff. In the video I look through the key levels I am watching on major Indexes, US bonds and the USD.
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Stock Index Futures at Major Daily SupportBoth the S&P500 and Nasdaq futures tonight have tagged Daily Support levels. The CME_MINI:ES1! has hit the Daily Kijun Sen which is the 50% Retracement of the December 20th through New Year rally and CME_MINI:NQ1! has hit the Daily Senkou B which is the 50% Retracement of the rally of Q4 2021.
Checking news events this week JPow (Jerome Powell) is scheduled to testify Tuesday at 10am. I would expect Monday to be a muted day in anticipation of this talk and Tuesday to be the more interesting day of the week. All risk markets have focused on on rate hikes. Rate hike speculation is the defining theme going into January 2022.
USDCAD Potential Buy @SupportUSDCAD has given us a nice pullback to support around the 1.27800 level, price broke through this level as resistance earlier this month and is now retesting it as support. With interest rate hikes coming in 2022 we can expect dollar bulls entering the market. This may be yet another pivotal moment to see USDCAD take another move to the upside
Double Hawkish Tone From The BOC (28 October 2021)QE has ended.
During the monetary policy meeting yesterday, the Bank of Canada (BoC) carried out a hawkish move. The initial expectation from the market was for the central bank to taper its quantitative easing (QE) from C$2 billion per week to C$1 billion per week. However, the BoC surprised the market by bringing its QE to a halt.
Rate hike timeline carried forward.
Back in September’s meeting, the BoC mentioned in the rate statement that interest rate will be held at its current level until its 2% inflation target is sustainably achieved. The central bank projected this target to be met during the second half of 2022. However, in the released rate statement yesterday, the BoC revised its projection and is now expecting the target to be met in the middle quarters of 2022. This directly translates to an earlier timeline for the central bank to hike interest rate.
Quarterly economic projections.
The BoC revised its economic growth projections for 2021 and 2022 downwards while revising upwards for 2023. The downwards revision comes as the central bank is expecting global supply chain disruptions and shipping bottlenecks to carry on into next year, having a negative impact on economic growth.
As for inflation, the BoC revised its projections upwards for all three years, explaining that higher energy prices and supply bottlenecks are now “stronger and more persistent then expected”. Hence, the central bank is expecting inflation to be elevated into 2022.
For year 2021,
GDP: 5.1% (6.0%)
CPI Inflation: 3.4% (3.0%)
For year 2022,
GDP: 4.3% (4.6%)
CPI Inflation: 3.4% (2.4%)
For year 2023,
GDP: 3.7% (3.3%)
CPI Inflation: 2.3% (2.2%)
*Figures shown in parentheses refers to projections from July 2021
What’s next for the BoC?
With the conclusion of QE, the BoC is now moving into the reinvestment phase. In this phase, the central bank will offset bonds maturities by purchasing new bonds to replace those that are maturing in order to maintain the overall bond holdings at around the same level. The targeted range of purchase will be from C$4 billion to C$5 billion per month.
With that, the duration of the reinvestment phase has become a future monetary policy decision and will depend on the economic recovery and how inflation plays out in the future.
GBPAUD H4 - Short SetupGBPAUD H4
Annotations and order details marked for the possible sell setup, another 10 pips upside required for the RR offering of 3R. Ideally would like to see some sort of confirmation rejection too, we have 3 confluences, but still looking extremely bullish.
Lets see if we start to exhaust around this price zone.
GBP/JPY - Pound Bullish on BoE Rate Hike Expectations
Fundamentals
Key Points:
1. Markets are expecting UK Inflation to overshoot the central banks' 2% target and reach 3.35% in the coming years.
2. UK 10 Year Bond yields have been rising as a result of high inflation expectations.
3. Against countries like Japan, Switzerland & Germany the UK 10 Year Government Bond Yield is more attractive for investors causing money to move into the UK from these countries and the pound has been getting stronger against all three currencies as a result of the UK's Bond Yield rising.
4. The Bank of England said on May 27th that if people are moved off furlough back into work at a faster pace than previously expected, The Bank of England may be forced to withdraw some of its monetary stimulus and potentially raise interest rates as inflation will rise as the demand for goods and services rise from employment and the re-opening of the economy.
5. High levels of employment will boost price pressures at a time when inflation is already expected to be high from supply shortages caused by the pandemic.
6. This scenario means the central bank will be forced to act and withdraw its monetary support to curb inflation by reducing its bond-buying program, causing the price of bonds to decline and pushing up the Yield due to their inverse correlation.
7. A rate hike would also cause UK short-term rates to move into a profitable carry trade against currencies like the Japanese Yen & CHF & EUR.
What To Watch
Employment Data
Rate Hike Expectations
UK Bond Yield’s
Trade Idea’s
EUR/GBP - SELL
GBP/JPY - BUY
GBP/CHF - BUY
Technicals
GBP/JPY - Key Resistance ¥160.00
GBP/CHF - Key Resistance 131.000
EUR/GBP - Key Support €183.500
ATR Volatility
GBP/JPY - 4.76%
GBP/CHF - 4.06%
EUR/GBP - 3.72%
EUR/RUB & USD/RUB - Short SellWith high inflation above the Russia Central Banks 4.00% inflation target.
Markets are currently pricing in two interest rate hikes from the central bank over the next 6 months.
This will make short-selling EUR/RUB and USD/RUB very attractive to yield-seeking investors.
In this video, I break down both trades in detail.
AUDUSD BUY ENTRYHello Traders! Our First entry is in 120 pips profit. If it breaks the previous high we are ready to enter another buy entry because i am expecting bullish move from AUD After Positive Interest Rate Decision. We are targeting 0.7220. We will Enter more BUYs for maximum profit in this bullish move.
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Previous AUDUSD Post
Gold may consolidate until FOMC meeting if econ. data is inlineThe Fed meets in 14 days, and futures markets are currently predicting about a 25% chance of an interest rate hike. That would be bearish for gold. Gold will likely consolidate and perhaps even move a bit lower leading up to the meeting as investors start to price in the rate hike possibility. If the Fed leaves rates alone, then gold will move higher.
One thing that might move gold earlier is tomorrow's slate of economic data, including a JOLTS jobs report and homebuilding numbers. A positive surprise might increase the likelihood of a rate hike and move gold lower, while a negative surprise might increase the likelihood that rates will stay the same, moving gold higher.
FED rate decision vs technical analysisThe USD/JPY is currently in a weak symmetrical triangle pattern, this is also coincidentally where the 25 MA and the 13 MA look like they will be crossing over in the near future (I would moreover say 13 MA crossing above the 25 MA, indicating a bullish play). Also, the Coppock curve is positive, but is slowly reaching prior resistance, so this could mean a potential rebound if a bullish breakthrough occurs. However, a bullish breakthrough seems more likely since the Fibonacci 0.382 retracement line is providing support to the currency pair.
On the other hand, the FED interest rate decision is tomorrow. So, if the volatility is high and there is a bullish breakthrough, I would be expecting it to be very short-term. If there is a bearish breakthrough, then I would be expecting it to be short-medium term.
9/24/18 DXY pre-FOMCA lot of indesecisiveness in the DXY since the last FOMC meeting where they decided to leave rates unchanged. Source CNBC article states ," the committee is widely expected to approve an increase at the September meeting and a tweak in the language from the post-meeting statement could be a nod toward more monetary policy normalization." www.cnbc.com
-Looking to long to the next key level at 97.00
Cash it with BAC
With interest rates rising — and deposit rates staying at low levels — the company has been able to generate substantial profits
Net income jumped by 33% to $6.8 billion in the last quarter
"Yet it seems like a good bet that the momentum will continue. The Federal Reserve has indicated there will be two rate increases this year and another three in 2019"
Target price according to fundamentals - $34.57 per share
EURGBP BUY OPPORTUNITY. EVENT TRADING - BoEBank of England (BoE) meeting minutes 12:00 UTC today (2nd August)
Two Catalysts for EUR/GBP
1) BoE will announce its interest rate decision at 14:00 UTC+2 on 2nd of August. Markets are pricing 80-90% implied probability of a rate hike to 0.75% (it is 0.5% now).
From reported economic indicators, the unemployment rate remains glued at 4.25% and wage growth has decelerated compared to latest inflation report from May ( from 2.9% to 2.7%). Core inflation has also surprised to the downside.
Calculating using the futures contracts, markets have priced in the rate hike, therefore there should not be a gap up if they hike. In that case the market would react more on BoE outlook of the economy and economic projections, and there is a chance they will not be as good as markets may expect, as expectations right now are really high, Which gives me grounds to believe that even with a rate hike there is bigger change of a gap up of EUR/GBP (weak GBP) than gap down.
And if they surprisingly do not hike, then than would be a hell gap up omg that would be awesome.. :D
2) You can also see that EUR/GBP is on the up trend and is approaching lower trend line, which is a huge support for this pair. That means that there is a technical catalyst for EUR/GBP to go up.
Cooperate risk not yet attractive to investors?This is one of the few indicators that gives genuine sentiments about the highs or lows made in the stock market. We broke through significant highs in the SPY but the HYG which is a high yield cooperate bond etf didn't budge. Before the stock market rallies this one should rally first.
GBPUSD - Stuck in a bearish channel The pound still seems to be stuck in the bearish channel, we will need to watch this over the next few weeks as fundamentals and Brexit talks are going to play a major role in the direction this currency is going to be moving. The most important thing to lookout for is the chance of an August interest rate hike from the Bank of England, this could send this pair flying.
GBPUSD - Bullish signals!The graph has just formed a morning star as the price touches the support level of the bearish channel and the price was also touching the oversold level on the RSI. This means that the price is getting ready to change direction and we might see bullish moves over the coming days. This pair has been looking very interesting lately after the BOE (Bank of England) announced that they are likely to increase interest rates over the coming months. An interest rate hike could see some significant bullish gains for this currency pair, I would be updating this frequently yo keep everyone up-to-date with what is happening with the interest rate hike. If anyone has any questions please feel free to ask.
Is It Time to Sell Your Gold? Fed Rate Hike In HighlightsThe violation of $1,294 can lead gold prices towards $1,289 and $1,281. Whereas, the bullish breakout will open a room for buying until $1,307 and $1,317 today. Investors will be watching very closely to see if there’s any forward guidance that will intimate a possible fourth rate hike into the year-end.
Oil continues higherOil should continue its bull run higher after a short correction. Saudi's seem to be finally getting their act together, and with power consolidation, should be able to limit supply enough to continue this rebound in prices this year. Fed's higher interest rates should dampen the response from debt-laden shale producers. These should set up for long-term higher oil.