Get started

Interestrates

US 10 YEARS -W1/D1 - DB TARGET @ 1.6500WEEKLY : Double bottom (@1.1270) gives a technical target @ 1.65 %; it has nearly been filled with a high so far @ 1.6150 Interesting to note that current level coincides with the former congestion top seen early this year between April and May. Therefore, this 1.6000/1.6500 area may this time trigger the second top and should be watch at very carefully ! DAILY : The upside breakout of the triangle pattern around 1.3900 which also coincided roughly with the daily top clouds triggered an upside acceleration with a small consolidation. Note the RSI which is currently in a bearish divergence mode (wait for confirmation) As long as the US 10 Y stays and hold above TS, it is fine for further upside towards former March high @ 1.774 (50 % Fib ret @ 1.8060) ... but a failure to do it, would directly put the focus on the next support level around 1.35/1.45 former resistance area which becomes now the new support zone. As usual, watch an monitor closely price action on shorter intraday time frames to get intermediate clues for the upcoming trading sessions. Have a nice week All the best Ironman8848
TVC:US10Y
by Ironman8848
US GOV BONDS 10 YR YIELD - M1 ---> D1Good morning, today we are going to look at 3 time frames, beginning with : MONTHLY September monthly closing level is showing a failure to close above the ongoing downtrend line resistance.(1.5570). Interesting to note that the September intramonth high (1.56) was slighly higher than the 61.8% Fib ret @ 1.5270 (1.7740-1.1270 move). So for the time being recent price action was only a corrective move. October monthly closing level will validate or invalidate a potential breakout of this important downtrend line resistance. WEEKLY This week ongoing price action is, for the time being, showing also, a failure to clearly breakout the W1 downtrend line resistance. Important support levels on a weekly basis @ 1.4360 ahead of 1.3950; a failure to hold above this area would open the door for lower levels, towards 1.3440 (W1 top clouds) ahead of 1.25 Wait the weekly closing level for confirmation. DAILY Recent price action seen over the last couple of days, is also showing, for the time being, a breakout failure to crossover the daily downtrend line resistance and hold above it ! Looking forwards, I strongly suggest to look at the following levels : Support area : 1.43 - 1.38 A failure to hold above this zone would put the focus on the daily clouds support 1.35-1.27 Resistance area : On the upside, as above mentioned, a breakout and daily closing level above the ongoing downtrend line resistance (currently around 1.52), would be the first significant warning signal for a trend change (from a SELL on rally to a buy on dips) in watching carefully the following price action, if the breakout occurs. Be careful, on pullback (bull "yield" trap !!) Have a nice day All the best If you like my analysis, please do not forget to like it and me on your following list. Many thanks in advance Best regards Ironman8848
TVC:US10Y
by Ironman8848
ČNB massively increases interest ratesČeská národní banka (Czech National Bank) has increased interest rates from 0.75 to 1.5 This was not expected at all and is likely to have continuous impact on the markets. I started shorting both USD and EUR against CZK. Support on EUR Support on USD There is far more room to go for Crown against Dollar, but I expect the support to be broken unless FED and ECB also increase the rates. I will be updating my indicators this weekend with a new value.
Short
by OrcChieftain
US Dollar and the macro landscapeThe USD is currently looking pretty strong, with 96 looking very likely the first key target and resistance zone. It looks like it has formed a major based and has potentially bottomed for real... The US compared to other countries can raise rates a lot more and therefore the dollar could strengthen more, but the key is that raising rates will create all sorts of issues. There is too much US denominated debt and as rates go higher people struggle to pay debts and therefore sell real assets to buy USD. As inflation is going higher, people are already struggling to pay certain things and this is just the cherry on top. I seriously don't understand how raising rates will stop energy prices going higher, especially when the way the system is currently set and in its current state raising rates even to 3% would blow up the entire US junk bond market. There is too much leverage and malinvestment at this stage that can only be washed out violently. However I am not as bearish for now, especially on US stocks. I believe we will get a dip, and a strong dip but it is a great opportunity. I truly believe stocks have much higher to go and this is just an ordinary correction. We haven't had a 10% correction in the S&P 500 for about a year and in the meantime stock prices have risen tremendously. Yes there is more upside, but corrections are part of the game regardless of whether there is a narrative behind them or not. That could be high inflation, Fed raising rates, Evergrande or whatever... but the truth is that it was time. Based on my analysis stocks could fall another 5-10% before they bottom, but this doesn't mean it is going to happen in one candle. Expect chop for some time and a potential bottom when we get really high volatility with the VIX around 40. In the short term US rates could go up (bonds going down) and that move was building up for quite some time, but I don't think it will be a moonshot for rates and it won't be a long lasting move. At some point growth will slow down and many of the structural issues will be solved, so inflation will come down and we will be stuck in the same disinflationary environment... Lots of things will start breaking, lots of people will be trapped on the inflationary trade and rates will go negative next time around. So what do I see? Rates up to 1.5-2% and then back down again. What I find most interesting here is how the Russell 2000 looks like distribution, but as rates go up it could be the biggest beneficiary as people exit large caps to enter into small caps. Maybe that's a key rotation to pay attention to as it has shown quite a lot of strength recently. Not only that, but the lows on RUT could be broken violently and then we could see an even more violent come back with new highs shortly after (essentially that range being re-accumulation). Personally I really don't like the way the VIX has bottomed and I feel a big move is coming and that we will have a very volatile environment for quite some time. Things aren't going well globally and nothing has been done to fix all the issues going on. What worries me the most is how relentless Oil and Natural gas look like, which could do a lot of damage on huge parts of the economy as inequality keeps growing. We are stuck in a trap and we can't escape... a vicious loop that only makes things worse. So who knows... maybe my expectation for a small correction is small and a much larger one will come. It is clear that the main trend has broken and I have spoken about it quite a bit over the last few weeks. I have no idea how bad things could get, but for now being patient and waiting to buy the dip is what I think is best. Buy dips on Oil and Stocks. Forget metals and bonds for sure.
TVC:DXY
by BitcoinMacro
USDJPY Breaking Out Of A Triangle USDJPY finally breaks out of a triangle as both SP and US yields rally. Keep in mind that higher Yields are positive for the currency, while risk-on means depreciation of JPY, especially now when BOJ is not ready to take any action on interest rates. Based on their recent statement, they will most likely maintain stimulus in the next few years. Technically I expect USDJPY to see more upside after a completed triangle, so looking for a retest of the 2021, maybe even 2020 highs. JPY crosses are also looking interesting, GBPJPY in particular.
by ew-forecast
GOLD before FEDAs expected GOLD has reached the resistance zone at 1780. Now we are looking for the next move. It all comes down to the FED interest rate decision. Technically speaking it looks like price will continue lower and below the previous lows. However, DO NOT use big lot size before the news! Entries a little after the news will be more confirmed. In case of a downside continuation the first target will be 1735. If price goes to the upside, then the level to look out for is 1810. The best time to enter will be after the news and a close below 1770.
FX_IDC:XAUUSD
by ForexTrendline
30
EURUSD before FED The sideways moves on EURUSD are still there. That's something usual before such an important events. Today we will see if this downtrend will continue or there will be a reversal. That's why a big portion of the players are stepping aside and not getting involved in any positions. We do not recommend to enter any long term trade ideas before the events today. Once we see what happens after the news, that's when we want to look for entries. Any entries before that are based on expectations and carry more risk. There is a higher probability for a downside continuation, but also a big chance for spikes during the news.
by ForexTrendline
10
EURUSD awaiting the FED The most important news for this month are due tomorrow - the FED interest rate decision. Usually, before such a news price is trading sideways and we shouldn't be entering trades with a lot of risk. That's what we're expecting now as well - slow price action which should find it's direction after the news. We are currently looking at a downside direction and that's what we would expect after the news as well. After the news we will have confirmed trading ideas and a confirmed trend as well.
by ForexTrendline
28
EURJPY: a pinbar where you need one!Yesterday price dropped down below 200 EMA to the support zone. Later, it moved back up again closing above EMA and within the previous candle's range. This pinbar has three supportive factors making it more significant than any other. ► It breached 200 EMA, yet it closed above it confirming the dynamic level to be a support. ► Opened and closed within the previous candle's range => the whole downside momentum was completely absorbed within a single candle. ► Interest rates support the bullish narrative although it is 5 years since they were changed. There is also one contrarian point that should be weighed in. Japanese Yen is usually a currency relied upon in times of uncertainty. I think we've got a lot of that lately. Good luck!
Long
by OrcChieftain
Dovish Tapering Locks In QE (08 September 2021)The dovish tapering decision. During its monetary policy decision yesterday, the Reserve Bank of Australia (RBA) kept its cash rate unchanged at 0.10%. As promised, the central bank proceeded with its quantitative easing (QE) tapering plan announced back in the July’s meeting. What came as a surprise is the duration of the new round of QE. Previously, the RBA opted for a two-month QE duration. But during the announcement yesterday, the central bank decided to extend the duration by five months instead. Thus, the tapered A$4 billion QE will run from September until at least February 2022. As a result, the Australian dollar strengthened for a brief period of time before weakening across the board, reflecting the dovishness as a result of the extension of the QE duration. Delta variant still a concern to the RBA. Despite RBA Governor Lowe saying previously that fiscal policy will prove to be more effective than monetary policy in providing aid at the moment, this does not deter the central bank from making a more cautious decision. As explained in the rate statement, the RBA’s decision to extend the QE duration “reflects the delay in the economic recovery and the increased uncertainty associated with the Delta outbreak”. Rate hike remains out of sight. As with the previous meetings, the RBA continues to reiterate that its cash rate will not be increased until inflation falls within the 2-3% target range and this condition will not be met before 2024 based on their current projection.
by GH_Lee
10 YEAR BOND YIELD - Have Interest Rates Bottomed?My count has not changed that much over all the attempts that I have made at finding the right count in this market. Which is why I always ask the question, have interest rates bottomed? I believe once we rise above a couple of key levels mentioned in the video we will have more of an idea. At the same time I find it intriguing how the NASDAQ and Dow Jones both appear to be at an inflection point. I have linked the latest NASDAQ and other ideas below. Remember to use Disciplined Money Management Principles to ensure longevity as a trader. If you don't know the long term pattern shouldn't you be doing your research instead of just following the crowd? Just remember: I am not a financial advisor, I suggest using this only as a guide. Always do your own research.
TVC:TNX
by AriasWave
1
Will FED Taper?Fed tightening 10 year surged to almost 3.2% when Powell tried to tighten this can be seen on the chart below. Now following that measure to tighten you see the S&P fall 20% this miscalculation of the FED to increase rates. Powell was out to pop the equity bubble, but again this miscalculation caused them to stop tightening, and on the chart below you can see this was followed by the cutting of rates. Low growth married to market expecting liquidity has allowed us to see huge growth. We are stuck in the circle of asset growth over strong economic growth.
SP:SPX
by tahirg0010
U-Turn In Rate Hike Decision (18 August 2021)The last-minute decision. During their monetary policy meeting earlier today, the Reserve Bank of New Zealand (RBNZ) carried out a last-minute change in decision, holding its overnight cash rate unchanged at 0.25%. New COVID case in six months thwarted RBNZ’s rate hike plan. Just yesterday, the first local COVID case was reported in New Zealand in six months. As a result, Prime Minister Jacinda Ardern announced a nationwide level-four lockdown with immediate effect. Prior to this new COVID case, the RBNZ was expected to announce a rate hike during today’s meeting as the country’s economic recovery has been robust and the economy is starting to overheat. In the released rate statement, the central bank mentioned that the “ Committee discussed the merits of an increase in the OCR at this meeting and considered the implications of alternative sequencing of OCR changes over time ”. However, with what went down yesterday, the central bank decided to put on hold their rate hike decision, highlighting in the rate statement that the “ decision was made in the context of the Government’s imposition of Level 4 COVID restrictions on activity across New Zealand ”. A delay rather than a setback. New Zealand’s “go hard, go early” approach to the containment of the pandemic has been highly effective as is evident from being one of the first few countries to declare COVID-19 free. With the country’s snap lockdown and effective approach, it is possible that the spread of the virus will be contained within a short period of time and is unlikely going to pose a setback to the country. Moreover, the RBNZ has carried forward their expectation of a rate hike from September 2022 to this coming December as indicated in the quarterly monetary policy statement, delivering a hawkish tone. To conclude, this sudden turn of events is unlikely going to hold the New Zealand economy down for long. As the next monetary policy meeting will be held on 6 October, this will give the central bank sufficient time to make a hawkish return, with the condition that the virus is once again contained swiftly.
by GH_Lee
GBPUSD - basic Interest Rates StudyThis is a simple study of how interest rates influence the market. I included 10 last values in my indicator. The base currency (GBP) is black. The second currency (USD) is red. Between June and December, FED (USD) increased the interest rates 3 times by 0.250 BoE (GBP) also increased the interest rates by the same number but only once. Obviously, this was a catalyst for a major bearish move. Not only that the rates difference had already been bearish at a time. The gap between the rates further increased! But look at the moment when BoE increased their rates. Even if insignificant for the long-term, it started a good counter-trend rally in the short-term. In 2019, FED decreased the rate a few times, hence the difference changed a little in favor of GBP. At look how long the pair grew. It even smashed the previous highs until it resumed its downward trend based on the rate difference. March 2020 was full of interest rate changes across all currencies. When BoE dropped the rate a little (in relative terms), FED decreased the dollar's interest rate rather drastically leading to a more than a year and a half long rally. Although it is losing its steam, it might yet continue for a while. I created two indicators that can be used to study these relations and create a long-term vision once the rates change again (might take a moment to update). You can find them both in the public library :)
Education
by OrcChieftain
1
QE Tapering Plan Will Go On (06 August 2021)Three days ago, the Reserve Bank of Australia (RBA) delivered a little surprise when it decided to stick with its quantitative easing (QE) plan announced back in July despite the recent spike in COVID cases in Australia. (Refer to my post "RBA Sticks With QE Tapering Plan (04 August 2021)" on RBA monetary policy) Details on why the central bank decides to proceed with its decision on QE tapering were provided during Governor Lowe testimony earlier today. Lowe’s Testimony During his testimony before the House of Representatives Standing Committee on Economics, Governor Lowe said that the RBA has considered holding back its plan for QE tapering during the monetary policy meeting. However, the central bank’s positive projections on the economic growth for 2022 permitted the plan to continue. Lowe explained that “any additional bond purchases would have their maximum effect at that time and only a very small effect right now when the extra support is needed most.” Furthermore, he mentioned the RBA felt that fiscal policy would be more appropriate than monetary policy in terms of providing aid at the moment. Nonetheless, the flexible approach of its QE programme allows the central bank to make adjustments to the rate of bond purchases in response to any unexpected turn of events. On the subject of the RBA cash rate, Lowe highlighted that the central bank will not be increasing cash rate until inflation is sustainably in the 2-3% range. He emphasised that the RBA needs to be confident that inflation will remain within the targeted range before any rate hike is considered. Finally, Lowe said that the condition for a rate hike “is not expected to be met before 2024”. RBA economic projections. For year 2021, Australian GDP: 4.00 (4.75) CPI Inflation: 2.50 (1.75) Unemployment Rate: 5.00 (5.00) For year 2022, Australian GDP: 4.25 (3.50) CPI Inflation: 1.75 (1.50) Unemployment Rate: 4.25 (4.50) For year 2023, Australian GDP: 2.50 (N/A) CPI Inflation: 2.25 (N/A) Unemployment Rate: 4.00 (N/A) *Figures shown in parentheses refers to projections from May 2021
by GH_Lee
No Signs Of QE Tapering From The BoE Yet (06 August 2021)The BoE’s decision. As widely expected, the Bank of England (BoE) carried out no change to its monetary policy during its meeting yesterday. Interest rate remains at 0.10% with all eight voting committee members voting for no change. Quantitative easing (QE) remains at £895 billion in total. Michael Saunders, one of the hawks of BoE, voted for a reduction in government bonds purchase by £45 billion. Overall positive outlook of the UK economy in the near future. In the quarterly release of the BoE’s monetary policy report, the central bank said that the “impact of COVID on the UK economy fades further over time” although the Delta variant of the virus continues to spread in the UK. The confidence on the economic recovery led to the central bank’s positive revision of its economic projections. Economic Projections: For year 2021, UK GDP: 7.25 (7.25) CPI Inflation: 4.00 (2.50) Unemployment Rate: 4.75 (5.00) For year 2022, UK GDP: 6.00 (5.75) CPI Inflation: 4.00 (2.50) Unemployment Rate: 4.75 (5.00) For year 2023, UK GDP: 1.50 (1.25) CPI Inflation: 2.00 (2.00) Unemployment Rate: 4.25 (4.25) *Figures shown in parentheses refers to projections from May 2021 The BoE expects the UK economy to return to pre-pandemic level during the fourth quarter of 2021. As with the other major central banks, the BoE also felt that the recent rise in inflation is due to transitory factors. With the ceasing of the UK furlough scheme at the end of September, BoE Governor Andrew Bailey highlighted that unemployment was “no longer expected to rise”. He also mentioned that the challenge for the economy now is whether employers can fill up the job vacancies. On the matter of QE. Little was mentioned on QE during this meeting. The BoE said towards the end of its rate statement that “should the economy evolve broadly in line with the central projections in the August Monetary Policy Report, some modest tightening of monetary policy over the forecast period is likely to be necessary to be consistent with meeting the inflation target sustainably in the medium term”. The committee members also intend to start unloading the bond purchased by the central bank when interest rate has risen to 0.5% and will consider to do so actively when interest rate is at least 1%. According to the BoE, interest rate is projected to be at 0.5% by the third quarter of 2024. Hence, it is likely that the central bank will be holding on to its purchases at least in the near future. Interest Rate Projection: 2022 Q3: 0.2% 2023 Q3: 0.4% 2024 Q3: 0.5%
by GH_Lee