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GBP/USD Hits Intraday High as BoE's Bailey Keeps Hawkish ToneThe GBP/USD pair has once again hit an intraday high as bullish sentiment continues for a second day. Optimism around Brexit and hawkish comments from Bank of England Governor Andrew Bailey have propelled the British Pound. Meanwhile, the US Dollar is being weighed down by fears of banking fallouts, mixed Federal Reserve talks, and downbeat yields. GBP/USD is currently trading near 1.2320 as the risk-on mood in the market has combined with positive headlines from the UK to support Cable buyers. Bailey's hawkish comments on inflation and the potential for further monetary tightening have added strength to the pair's upside momentum, particularly after similar comments from him on the previous day. Brexit barriers and labor problems that have recently affected the British economy have also contributed to the Cable pair's upward movement. On the other hand, the US Dollar is being weighed down by global policymakers' efforts to prevent banking contagion, as well as deposit insurance schemes and emergency credit lines extended to troubled banks. Recent comments from central bank officials pushing back against concerns of a banking crisis and the Silicon Valley Bank (SVB) deal have also contributed to the risk-on mood in the market, further weighing on the US Dollar. Looking ahead, GBP/USD bulls will be looking for further hawkish comments from BoE's Bailey, as well as softer prints of the US Conference Board's (CB) Consumer Confidence for March, to maintain their position.
Long
by FOREXN1
5
EUR/USD: Economists Predict Euro to Rise Against by End of YearAccording to economists at Commerzbank, the Euro (EUR) is expected to gain some value against the US Dollar (USD) towards the end of the year as the US moves closer to rate cuts. The Federal Reserve is expected to commence cutting rates again in early 2024, which is likely to reduce the demand for the USD's 'safe haven' property as market concerns subside. As a result, the EUR/USD exchange rate is predicted to rise. The European Central Bank (ECB) and the Federal Reserve are both expected to end their rate hike cycles in the summer. However, while the ECB rates are expected to remain stable, the Fed is expected to begin cutting rates again in early 2024. This convergence of monetary policies is seen as a significant advantage for the Euro. The economists at Commerzbank have set a target of 1.12 for the EUR/USD exchange rate. As market concerns ease, the demand for the USD's safe haven property is expected to decrease, which would lead to a rise in the EUR/USD exchange rate.
Long
by FOREXN1
23
GBP/USD rises on US recession fears and UK energy relief hopesGBP/USD has continued its two-week upward trend and hit an intraday high near 1.2250 at the beginning of the week. The rise is attributed to fears of a US recession and positive news from the UK, including hopes for more economic measures to support energy companies from PM Sunak. However, the Cable pair buyers are being tested by cautious sentiment ahead of the key data and events this week. The Bank of England's (BoE) recent 0.50% rate hike, combined with mostly positive economics and downbeat US Treasury bond yields, have also contributed to the rise in GBP/USD. However, Friday's risk-negative headlines challenged the GBP/USD buyers before the latest surge, which was supported by weekend news. Over the weekend, Minneapolis Fed President Neel Kashkari expressed concerns about stress in the banking sector and the possibility of a follow-on credit crunch, which he believes could bring the US closer to recession. This news, along with the Financial Times' suggestion of more relief for UK energy companies, has favored GBP/USD prices. Looking ahead, BoE Governor Bailey's speech may interest intraday traders of the GBP/USD pair. However, the major attention will be given to the Fed's preferred inflation gauge, namely the Core Personal Consumption Expenditure (PCE) Price Index. In the meantime, geopolitical concerns such as Russia's nuclear usage in its war with Ukraine and the ongoing Brexit negotiations continue to influence the GBP/USD bulls.
Long
by FOREXN1
9
EUR/USD: Pullback 50% 61.8% FIBO For a New LONG SetupAccording to ING economists, the EUR/USD pair has retreated after surpassing the 1.0900 mark. Nevertheless, they anticipate that the pair will reach the level of 1.1000 in the near future. Today, market focus will be on the PMI readings in the Eurozone. ING predicts that the survey will stabilize around the figures from February. Unless there are any major surprises, the PMI releases are unlikely to have a significant impact on the market as the macro fundamentals are currently playing a secondary role to the financial market's stress. ING suggests that the Dollar bias will remain bearish, and European currencies will be supported by hawkish central banks and a less volatile banking environment, which could lead to the testing of the 1.1000 level in the near future.
Long
by FOREXN1
20
USD/JPY REMAINS HEAVILY BEARISH,LOWEST LEVEL SINCE FEBRUARY 10For the third consecutive day, USD/JPY is experiencing heavy selling pressure, pushing the pair lower. The anticipation of a hawkish shift by the Bank of Japan (BoJ) is increasing demand for the Japanese Yen, thus contributing to the downward trend. However, some follow-through USD buying may offer some support to the pair, helping to limit further losses. During the first half of the European session on Friday, the USD/JPY pair extended its rejection slide from the 133.00 level earlier this week, and the spot prices dropped to their lowest point since February 10th. The bears are now looking to push the pair further below the psychological level of 130.00. Japan's consumer prices rose at their fastest pace since 1982 in February, and the Japanese Yen strengthened across the board in response to the domestic data. Specifically, Japan's core-core CPI, which excludes energy and food prices but includes alcoholic beverages, accelerated to 3.5% YoY, marking the fastest increase in 41 years. This has increased the likelihood of the Bank of Japan adjusting its bond yield control policy in the near future, which would benefit the domestic currency and continue to push the USD/JPY pair lower. Bearish traders have also taken cues from a further decline in US Treasury bond yields. This decrease in yields is led by the Federal Reserve signaling that it may soon pause its rate-hiking cycle due to the recent banking sector turmoil. As a result, the yield on the benchmark 10-year US government bond and the rate-sensitive two-year Treasury note are hovering near a six-month low reached earlier this week. This further narrows the US-Japan rate differential, which is another factor driving flows towards the JPY and contributing to the heavily offered tone surrounding the USD/JPY pair.
Short
by FOREXN1
4
SILVER: BULLS RETAIN CONTROL NEAR MULTI-WEEK HIGH, ABOVE $23.00Silver is currently consolidating after a strong move upwards on the previous day, reaching its highest level since February. The technical setup favors bullish traders and supports the potential for additional gains. Even if there is a pullback below the 61.8% Fibo, it is likely to attract fresh buyers and remain limited. The white metal is hovering above the $23.00 level, consolidating recent strong gains that began from the year-to-date low earlier this month, and is poised to continue the upward trajectory witnessed over the past two weeks or so. This sustained upward move is supported by this week's break and acceptance above the 61.8% Fibonacci retracement level of the recent pullback from a multi-month peak, adding credibility to the positive outlook. Technical indicators on the daily chart remain in the positive territory, and the absence of overbought signals indicates that the potential for an extension of the upward trend remains intact, which favors bullish traders. Therefore, a subsequent move beyond the $24.00 level could be in the cards, with a retest of the multi-month peak around the $24.65 region seen in February being a distinct possibility. Additional gains could occur if there is follow-through buying, which would enable XAG/USD to reclaim the psychologically significant $25.00 mark for the first time since April 2022. The next relevant hurdle is situated in the $25.30-$25.35 zone. However, dips below the $23.00 level may find some support near the 61.8% Fibo resistance breakpoint, located around the $21.80 region. Any subsequent decline is likely to attract new buyers near the $22.50 horizontal zone, which should limit the downside for XAG/USD near the $22.20 area or the 50% Fibo level. This is followed by the $22.00 mark, which if broken decisively, could set the stage for more significant losses.
OANDA:XAGUSDLong
by FOREXN1
6
GBP/USD: KEY 1.2420 AND 1.2500 LEVELS CAN BE TESTED QUITE SOONAccording to analysts at ING, GBP/USD is currently fluctuating below the 1.2300 level after the Bank of England's recent decision to raise the policy rate by 25 basis points. The economists predict that the pair will soon test the key resistance levels of 1.2420 and 1.2500. Despite the rate hike, the Bank of England did not provide much guidance in their statement, and it seems that the Monetary Policy Committee (MPC) has left all options open. It was anticipated that the BoE would not offer any substantial guidance, leading to a brief impact on the Pound. As predicted, this has been the case. It is likely that the BoE will take a pause in May, despite the recent rise in inflation. The analysts believe that with around 30 basis points of tightening in the price, there is potential for a repricing lower to favor a slightly higher EUR/GBP. The BoE's decision does not seem to have much of an impact on Cable, and with the view for Dollar downside risks, the key resistance levels of 1.2420 and 1.2500 are expected to be tested in the near future.
Long
by FOREXN1
3
GOLD FUTURES: DOOR OPEN TO EXTRA GAINAccording to the latest updates from CME Group on gold futures markets, there has been a notable surge in open interest, which rose by approximately 11.2K contracts on Thursday, reversing the two consecutive daily declines. Furthermore, volume has also experienced a similar increase, going up by around 33.4K contracts after a streak of three consecutive daily drops. To sustain further upward momentum, it is imperative that gold prices close above the critical $2000 mark per ounce troy. Fortunately, on Thursday, gold prices continued their rebound and once again surpassed this key level, albeit closing below it. This positive movement can be attributed to the surge in both open interest and volume, indicating a positive outlook for the yellow metal in the near future.
COMEX:GC1!Long
by FOREXN1
1
USD/CAD Remains Steady Amid Mixed Fundamental BackdropThe USD/CAD currency pair is currently trading in a tight range, as it is influenced by a combination of factors. The Loonie, as it is also known, is being supported by a recent uptick in oil prices, which has increased due to fears of potential supply disruptions in the Middle East. This has acted as a headwind for the USD/CAD pair, which is also being weighed down by subdued US dollar demand. Additionally, traders are eagerly awaiting important macroeconomic data from both the US and Canada, which could provide a fresh impetus for the pair. Despite a goodish rebound from the 1.3630 area, or over a two-week low, the USD/CAD pair remains below the 1.3700 mark due to a combination of factors that are keeping any meaningful upside in check. It is important to note that the recent collapse of two mid-size US banks, Silicon Valley Bank and Signature Bank, has contributed to the Federal Reserve's cautious outlook on the economy. This has resulted in the Fed lowering its median forecast for real GDP growth projections for 2023 and 2024, which is keeping the US Treasury bond yields and the USD subdued. While there is generally a positive tone around the equity markets, growing concerns about slowing economic growth denting fuel demand are capping the upside for oil prices. This, combined with expectations that the Bank of Canada (BoC) will refrain from raising interest rates any further, is providing some support to the USD/CAD pair. From a technical perspective, the lack of a clear near-term trajectory is reflected in the two-way price movements that have been witnessed since the beginning of the week. Given the mixed fundamental backdrop, traders are advised to exercise caution before placing aggressive directional bets around the USD/CAD pair. Investors are also showing some reluctance ahead of important macro data releases from both the US and Canada, which are due later during the early North American session. Friday's economic docket features the release of Durable Goods Orders and the flash PMI prints in the US, which will be closely watched by traders. Meanwhile, Canadian monthly Retail Sales figures will provide further cues. Finally, oil price dynamics will play a crucial role in determining short-term opportunities on the last day of the week. In conclusion, the USD/CAD currency pair remains steady above 1.3700 but lacks bullish conviction amid an uptick in oil prices. Traders are advised to stay cautious and follow the macroeconomic data releases and oil price dynamics to identify any short-term opportunities.
by FOREXN1
3
GBP/JPY Falls on Weak Treasury Yields - SHORTGBP/JPY is experiencing a decline from a one-week high and a fading corrective bounce off 160.80. The drop to 161.00 is in response to the decline of Treasury bond yields and the general weakness of the British Pound ahead of the Bank of England's monetary policy announcement on "Super Thursday." Following the US Federal Reserve's and US Treasury's announcements, yields tumbled. The pessimistic outlook for big manufacturing firms in Japan according to the Reuters Survey also adds to the pressure on the GBP/JPY. Despite the strong UK inflation data and the Brexit bill's passage through the House of Commons, the GBP/JPY buyers have not seen much success due to ongoing concerns about Brexit and banking fears. The recent announcements by Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen triggered a brief corrective bounce in the bond market, but it was short-lived. Fed officials have indicated that they do not anticipate rate cuts for this year, and Yellen ruled out the consideration of "blanket insurance" for bank deposits. The US 10-year and two-year Treasury bond yields are currently pressured at 3.45% and 3.96%, respectively, while the S&P 500 Futures show mild gains despite Wall Street's downbeat performance. Although the GBP/JPY pair's recent losses ignore the negative results of the monthly Reuters survey, they are still significant. The survey shows that big Japanese manufacturers remain pessimistic about business conditions for the third consecutive month in March. Please support me with LIKE and FOLLOW
Short
by FOREXN1
3
EUR/USD Continues to Climb, Testing 7-Week HighsOn Thursday, EUR/USD remained strongly bullish and showed no signs of slowing down. The pair managed to hit fresh 7-week highs, testing the 1.0930 level. This consistent upward trend can be attributed to the persistent selling pressure on the US dollar, which resulted in the USD Index (DXY) hitting multi-week lows, falling below the 102.00 level earlier in the day. The dovish hike by the Fed during its Wednesday meeting, coupled with Chair Powell's downbeat message at his press conference following the rate hike, also contributed to the pair's upward momentum. The European Commission will release the flash EMU Consumer Confidence for the current month, which will likely have an impact on the euro's performance. In the US, weekly Claims, Chicago Fed National Activity Index, and New Home Sales are expected to be released. The EUR/USD pair's optimistic outlook remains intact, and it looks to consolidate its recent strong rebound past the 1.0900 resistance level. The pair's immediate target is the 2023 high near 1.1030. The pair's future price action will be largely dependent on the US dollar's movement and the European Central Bank's potential next moves, considering the current context dominated by elevated inflation, although amidst dwindling recession risks for the time being.
Long
by FOREXN1
24
BITCOIN:Crypto Market Dips After Fed's Interest Rate HikeBitcoin and other cryptocurrencies experienced a decline on Thursday after a selloff on Wednesday, following the Federal Reserve's latest interest-rate hike. Despite the setback, cryptocurrency traders predict that the digital asset rally will continue, albeit with a temporary pause. Over the past 24 hours, the price of Bitcoin has fallen by 1.5%, reaching $27,700, dropping from the high point of $28,500 on Wednesday. However, the digital asset rebounded from the trough below $27,000 immediately after the Fed raised interest rates by a quarter of a percentage point. Wednesday's peak marked the highest level for Bitcoin since the crypto bear market accelerated last June. Prices for the largest digital asset are still up by more than two-thirds in 2023 in a rally that has spurred calls for a new bull market. Sam Yilmaz, co-founder of venture fund Bloccelerate, said, "Bitcoin's rally ahead of the Fed set us up for disappointment, and sure enough, we saw Bitcoin retreat from just shy of $29,000 after Powell's press conference. A cooling off period is overdue and allows Bitcoin and crypto to settle. I still believe Bitcoin could go to $35,000 in a matter of weeks because, put simply, price action breeds price action in crypto." Cryptocurrencies fell in line with the stock market after the Fed hiked rates. This return to Bitcoin's correlation with equities comes after weeks of outperformance. While the rate hike of 25 basis points was expected, digital assets dropped in step with the Dow Jones Industrial Average and S&P 500 as investors worried about how tightening financial conditions would continue to pressure the banking system.
COINBASE:BTCUSDLong
by FOREXN1
10
GOLD:Prices Rise as FED Reserve Signals Less Future Rate Hikes Gold prices surged after the March 22 Federal Open Market Committee (FOMC) meeting, with the precious metal reaching a peak of $1,978. This was mainly due to the US Federal Reserve's indication that it would probably not raise rates as much as previously expected in the future, as tighter credit conditions caused by banking stress could bring down inflation. This news was viewed as bullish for gold as lower interest rates are favorable for the metal, which does not provide a return to holders, unlike cash or cash equivalents. Although the Fed increased the Fed Funds Rate by a quarter of a percent to a target range of 4.75%-5.00%, in line with market expectations, this was already priced in by the markets. The Fed's Summary of Economic Projections (SEP) showed a lower-than-previous future rate hike trajectory in the dot plot, which further drove up the price of gold. The Chairman of the Federal Reserve, Jerome Powell, also suggested that the Fed may not need to raise rates as much as expected, given the credit crunch caused by the banking crisis. The US Dollar weakened in response to Powell's statements since lower interest rates tend to have a negative impact on the currency. As gold is priced in dollars on international markets, a weaker dollar buys less gold, which resulted in a surge in the price of the precious metal. Looking at the technical analysis of gold prices, it has recovered and risen in line with the dominant short-term uptrend. A continuation higher is probable, with a break above the $1,984 highs of the previous bar signaling an extension higher. The just-broken trendline is likely to present an initial target and resistance at $1,991, and the gold price will probably pullback at that level. However, an eventual rally all the way to the yearly highs at $2,009 is quite possible. In conclusion, gold prices rose due to the Fed's dovish hike, which suggested that tighter credit conditions due to banking stress might do the job of bringing down inflation on its behalf. This caused gold prices to surge, as expectations of lower interest rates are seen as bullish for the metal.
OANDA:XAUUSDLong
by FOREXN1
2
USD/CAD falls as US Dollar weakens and oil prices riseDuring early trading on Thursday, the USD/CAD pair saw a decline, hitting its intraday low near 1.3700. This came after a two-day absence, as the US Dollar weakened and oil prices increased. The US Dollar Index (DXY) saw its sixth consecutive day of decline, with bears pushing the index towards the 102.30 mark. This decline occurred despite the Federal Reserve's announcement of a 0.25% rate hike, as dovish concerns about the US central bank's next move and fears regarding the US banking sector persisted. While the Fed's rate hike matched market expectations, its statement regarding "some additional policy firming may be appropriate" instead of "ongoing increases in the target range will be appropriate" pushed back policy hawks. The statements made by Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen were also important. Powell indicated that there would be no rate cuts for this year, providing breathing space for greenback bears. Yellen, on the other hand, ruled out considering "blanket insurance" for bank deposits. Bloomberg also reported that the Federal Deposit Insurance Corporation would delay the bid deadline for a Silicon Valley private bank. Despite a surprise build in weekly inventories, WTI crude oil continued its upward trend, rising for the fourth consecutive day and ignoring the downbeat EIA Crude Oil Stocks Change report. This was driven by optimism surrounding China and hopes for increased energy demand. Looking ahead, second-tier US and Canadian statistics may entertain traders ahead of Friday's key data, which includes Canadian Retail Sales and US Durable Goods Orders for January and February.
by FOREXN1
3
EUR/USD:FOMC Announcement and European Market DevelopmentsThere are mixed signals regarding the EUR today. On one hand, the FOMC announcement could trigger a recovery in the USD, which would likely have a negative impact on the EUR/USD pair. On the other hand, there are positive developments in the European market, specifically in terms of efforts to contain adverse side-effects of the UBS-CS deal, which could boost European sentiment. However, there is also uncertainty around the baseline assessments of inflation and growth, given recent financial market tensions. Regarding the ECB, President Lagarde expressed concern about the ongoing war in Europe and the high inflation rate, and the ECB has raised interest rates by 50 basis points to ensure the 2% inflation target is met. While growth is predicted to be at 1%, underlying price pressures remain strong, and the bank will continue to monitor market tensions closely and be data-dependent in its policy rate decisions. The next meeting is scheduled for 4 May 2023. Overall, the EUR may be influenced by a combination of factors, including the FOMC announcement, developments in the European market, and ongoing inflation and growth concerns.
by FOREXN1
9
GOLD Could Rally Toward $2,000 on Fed's Dovish LanguageThe price of gold is currently below $1,950 and may see a bullish trend as XAU/USD bulls may make one last attempt to rise before the Federal Reserve meets. Mehta suggests that for any recovery to occur, gold would need to be accepted above the psychological level of $1,950 and reach the previous resistance level of $1,960. If the Federal Reserve adopts a dovish outlook, it could cause gold buyers to push the price back to $2,000 and potentially even higher. However, if the previous day's low of $1,935 is breached, selling interest may be reinforced, leading to a potential drop towards the $1,900 level. Should Fed Chairman Jerome Powell adopt a hawkish stance, gold's bullish commitments may be challenged, and the price could fall to the March 17 low of $1,918 before potentially dropping further to the $1,900 round level. "The anticipation of a 25bps increase in the Federal Funds Rate by the Fed will likely hurt the price of gold . Gold is often seen as a safe-haven asset, and when interest rates rise, it becomes less attractive to investors seeking higher yields."
OANDA:XAUUSDLong
by FOREXN1
7
USD/JPY Awaits FOMC Decision with Subdued Trading.The USD/JPY pair is experiencing a lack of clear direction on Wednesday and is trading within a narrow range. The subdued performance of the US dollar is holding back the pair, while a positive risk sentiment is providing some support. Traders seem hesitant and are waiting for the highly-anticipated FOMC decision. The USD/JPY pair is struggling to build on the gains of over 150 pips from the previous day and is trading below the weekly high reached earlier in the day, hovering around the 132.55-132.60 area. Investors are eagerly awaiting the outcome of the FOMC monetary policy meeting, which is scheduled to be announced later during the US session. The Fed is expected to deliver a smaller 25 bps rate hike, and the focus will be on the accompanying monetary policy statement, updated economic projections, and Fed Chair Jerome Powell's post-meeting press conference remarks. Investors will be looking for fresh cues on the future rate-hike path, which will play a key role in influencing the near-term US dollar price movements and providing a fresh directional impetus to the USD/JPY pair. The US dollar is currently trading near its lowest level since February 14, which is acting as a headwind for the major. However, the stable performance of equity markets is undermining the safe-haven Japanese Yen (JPY), which is providing some support to the pair. The Fed recently unveiled an enhanced seven-day dollar swap to add liquidity into the monetary system, while the news that UBS will rescue Credit Suisse in a $3.24 billion deal has eased fears of a global banking crisis and boosted investors' confidence. These factors, along with the more dovish stance adopted by the Bank of Japan (BoJ), are likely to continue supporting the USD/JPY pair, at least in the short term.
Long
by FOREXN1
1
USOIL: WTI on track to record second weekly loss.WTI is set to end its second week in negative territory and trades close to levels seen earlier this month. The decline in crude prices can be attributed to Russia's recent output and export cuts announcement, as well as a decrease in demand for oil in the US, evident from the accumulation of inventory over the past week. However, renewed optimism surrounding China's reopening and upgraded forecasts for global growth by IEA and OPEC for 2023 are keeping crude prices from completely collapsing. In this report, we will explore the catalysts driving WTI's price. A report from Reuters last week revealed that Russia would reduce its crude production by 500 thousand barrels per day in March, accounting for approximately 5% of its output, in response to the West imposing a price cap on Russian oil and oil-related products. The G7, the European Union, and Australia agreed to ban the use of Western-supplied maritime insurance, finance, and brokering for seaborne Russian oil priced above $60 per barrel. In addition, Russia plans to cut oil exports to western ports by up to 25% in March and re-route exports towards the east. The International Energy Agency raised its expectations for global oil demand in 2023 to 2 million barrels per day, with the rise attributed to China's reopening and an improvement in Europe's economic outlook. The American Petroleum Institute (API) reported a buildup of almost 10 million barrels in crude oil inventories yesterday, exceeding expectations for a mere increase of 1.2 million. This is the second straight week of significant inventory buildups and could be one of the reasons why WTI prices dropped during yesterday's session. Later today, the Energy Information Administration's (EIA) weekly crude inventories report is due, and it is expected to capture the attention of energy traders. Forecasts indicate that EIA's stocks would increase by 2 million barrels after last week's 16-million-barrel buildup. However, the inventory figure may end up being much higher than expected, based on yesterday's API release. The continuous buildup of EIA's inventories over the past eight weeks suggests weakened demand for crude and increases the likelihood of WTI prices declining further. Finally, the Baker Hughes oil rig count on Friday showed a decline in the number of active oil rigs in the US by 2, indicating a slowdown in demand.
TVC:USOILShort
by FOREXN1
24
EUR/USD: Price to Test Resistance Area Before a Decline.What to Expect for EUR Today: German ZEW Economic Sentiment and ECB President Lagarde's Speech Today, the EUR may face downward pressure as the German ZEW Economic Sentiment is predicted to drop from 28.1 to 14.9. This could lead to reduced foreign investment and a weaker euro. Regarding the central bank's notes, the ECB raised interest rates by 50 basis points to meet the 2% inflation target. Despite projected inflation averaging 5.3% in 2023 and growth at 1%, underlying price pressures remain strong. The bank will remain vigilant of market tensions and rely on data for policy rate decisions. The next meeting is set for 4 May 2023.
Short
by FOREXN1
28
EUR/USD: Economists at Danske Bank Predict Lower in 6-12 MonthsDanske Bank economists maintain their strategic case for a lower EUR/USD, predicting the pair to reach 1.02 in the next six-to-twelve months. They argue that this will be driven by tighter financial conditions, relative rates, and asset demand, along with new energy and real rate shocks. In this article, we will explore Danske Bank's reasoning for this forecast and the potential implications for traders and investors. Introduction The EUR/USD has been trending downwards, with the pair currently trading at around 1.19. Danske Bank economists have long predicted a strategic case for a lower EUR/USD, citing factors such as relative terms of trade, real rates, and relative unit labour costs. However, they now also see the potential for a short-term dip in the currency pair due to tightening financial conditions, relative rates, and asset demand. Factors Driving the EUR/USD Forecast Danske Bank's forecast for a lower EUR/USD is based on a combination of long-term and short-term factors. These include: Relative Terms of Trade Danske Bank economists argue that the Eurozone's terms of trade have been deteriorating relative to the US. This is due to the EU's high dependence on exports and a less competitive manufacturing sector compared to the US. As a result, the bank expects the EUR/USD to trend lower over the long term. Real Rates and Growth Prospects Danske Bank also believes that real rates and growth prospects are more favorable in the US than in the Eurozone. The bank notes that the US has outperformed the Eurozone in terms of GDP growth, and that US real rates are higher. This gives the US a relative advantage, which is likely to drive down the value of the EUR/USD. Relative Unit Labour Costs Finally, Danske Bank argues that relative unit labour costs are also more favorable in the US than in the Eurozone. This is due to factors such as wage growth and productivity. As a result, the bank expects the EUR/USD to trend lower over the long term. Tightening Financial Conditions In addition to these long-term factors, Danske Bank also cites tightening financial conditions as a potential driver of a short-term dip in the EUR/USD. The bank notes that financial conditions have already tightened recently, but expects more tightening to come. This could be driven by factors such as relative rates and asset demand. New Energy/Real Rate Shocks Finally, Danske Bank notes that a return to the September lows would require new energy and real rate shocks. While these are difficult to predict, they could have a significant impact on the EUR/USD. Implications for Traders and Investors For traders and investors, Danske Bank's forecast for a lower EUR/USD has important implications. Firstly, it suggests that long positions in the EUR/USD may be less favorable than short positions. Secondly, it suggests that traders and investors should be cautious about entering long positions in Eurozone stocks and bonds. Conclusion Danske Bank's economists maintain their strategic case for a lower EUR/USD, predicting the pair to reach 1.02 in the next six-to-twelve months. This forecast is based on a combination of long-term factors such as relative terms of trade, real rates, and relative unit labour costs, along with short-term factors such as tightening financial conditions and potential new energy and real rate shocks. For traders and investors, this forecast suggests that short positions in the EUR/USD may be more favorable than long positions, and that caution should be exercised when investing in Eurozone stocks and bonds.
Short
by FOREXN1
24
Gold Prices: Analyzing Immediate Support and Resistance LevelsGold is one of the most popular investments globally, particularly during times of economic and political instability. As a precious metal, its value is widely recognized and it is considered a safe-haven asset. Gold prices are affected by a range of factors, including economic and political events, market trends, and demand and supply dynamics. In this article, we'll analyze the immediate support and resistance levels for gold prices. What is Immediate Support and Resistance? Before delving into the analysis, let's first define what is meant by immediate support and resistance. Support refers to the level at which demand for a particular asset is strong enough to prevent its price from falling further. On the other hand, resistance is the level at which supply is strong enough to prevent the price from rising further. Immediate support and resistance refer to the nearest levels to the current market price that have previously acted as support and resistance. February High of $1,960 - Immediate Support for Gold Prices The recent performance of gold prices has been largely driven by the ongoing COVID-19 pandemic and its impact on the global economy. The February high of $1,960 is now considered the immediate support level for gold prices. If prices fall below this level, the psychological $1,950 level will be put to the test. This support level is critical as it has been tested multiple times in the past and has held strong, preventing prices from falling further. Multi-Month High at $1,991 - Resistance for Gold Buyers On the flip side, gold buyers need to take out the multi-month high at $1,991 in order to aim for the $2,000 threshold. This level of resistance is significant as it has been a key level in the past and has prevented prices from rising further. If gold prices can break above this level and gain acceptance above the latter, it will be critical to resuming the recent uptrend toward the $2,050 static support. Factors Affecting Gold Prices Gold prices are affected by a range of factors, including: Economic and Political Events Gold prices are sensitive to economic and political events. In times of economic instability, investors often flock to gold as a safe-haven asset. Similarly, in times of political turmoil, gold prices may rise as investors seek stability. Market Trends Market trends can also have a significant impact on gold prices. For example, a weak U.S. dollar can lead to an increase in gold prices, as investors look to hedge against inflation. Demand and Supply Dynamics Like any other commodity, gold prices are also affected by demand and supply dynamics. For example, increased demand from India, one of the largest consumers of gold, can drive prices higher. Conclusion In conclusion, the immediate support and resistance levels for gold prices are critical to understanding market trends and making informed investment decisions. The February high of $1,960 is the immediate support level for gold prices, while the multi-month high at $1,991 is the resistance level for gold buyers. Several factors, including economic and political events, market trends, and demand and supply dynamics, can affect gold prices.
OANDA:XAUUSD
by FOREXN1
11
USD/CAD Reverses Early Losses,Defends Recovery Moves in TriangleIntroduction The USD/CAD currency pair is a popular currency pair traded in the forex market. The pair represents the US dollar against the Canadian dollar, with fluctuations in exchange rates being influenced by a range of factors including global economic trends, political events, and interest rates. This article discusses the recent reversal of early losses by USD/CAD, as well as its defense of previous day's recovery moves inside a one-week-old symmetrical triangle. Early Asian Session Losses During the early Asian session, USD/CAD experienced losses. The market was reacting to economic data from China, which showed a slowdown in its economic growth. This affected the demand for commodities, such as oil, which is a significant export for Canada. This led to a decrease in the demand for the Canadian dollar, resulting in the decline in USD/CAD exchange rate. Mild Gains in Early Monday Morning in Europe However, during the early Monday morning in Europe, USD/CAD was able to reverse its early losses and print mild gains around 1.3735. This can be attributed to a few factors, including the US Federal Reserve's announcement that it will maintain its current policy stance on interest rates, as well as the positive sentiment in the US stock market. These factors increased the demand for the US dollar, leading to the upward movement of USD/CAD exchange rate. One-Week-Old Symmetrical Triangle USD/CAD has also defended its recovery moves inside a one-week-old symmetrical triangle. A symmetrical triangle is a chart pattern that is formed when the price is making higher lows and lower highs, creating a triangle shape. This pattern represents a period of consolidation in the market, where buyers and sellers are evenly matched in terms of demand and supply. As a result, it can act as a precursor to a significant price movement in either direction. Conclusion In conclusion, USD/CAD has recently experienced a reversal of early losses, printing mild gains around 1.3735 during early Monday morning in Europe. This can be attributed to a range of factors, including economic data from China, the US Federal Reserve's announcement on interest rates, and positive sentiment in the US stock market. USD/CAD has also defended its recovery moves inside a one-week-old symmetrical triangle, which could signal a potential price movement in either direction in the near future.
Long
by FOREXN1
7
AUD/USD Risk Proximity and Volatility:What Traders Need to KnowAUD/USD Takes a Leg Higher in Early Asian Trading: A Look at the Factors Driving Risk Appetite In early Asian trading, AUD/USD saw a surge in risk proximity, hitting the 0.6730 mark before retracing and trading unchanged. This movement was accompanied by a broader expansion of risk appetite, particularly in high beta currencies, thanks to coordinated efforts from major central banks aimed at addressing liquidity concerns. In this article, we will take a closer look at the factors driving this movement in AUD/USD, and what traders can expect in the near future. Factors Driving AUD/USD Risk Proximity Central Bank Coordination The main factor driving the surge in risk proximity for AUD/USD was the coordinated action taken by major central banks to address the liquidity crunch in financial markets. This included the US Federal Reserve, the Bank of Japan, the Bank of England, the European Central Bank, and the Swiss National Bank, who all agreed to provide dollar liquidity to their respective banking systems. This helped to ease concerns about liquidity and increase investor confidence, driving risk appetite and boosting high beta currencies like the Australian dollar. Economic Data Another factor driving risk proximity for AUD/USD is the release of positive economic data, particularly from China, which is Australia's largest trading partner. This data included a better-than-expected reading for the Caixin Manufacturing PMI, which showed a rise to 51.7 in December from 51.8 in November. This suggests that China's manufacturing sector is expanding at a faster pace, which bodes well for Australia's export-oriented economy. US Political Uncertainty US political uncertainty has also been a factor driving risk proximity for AUD/USD, with the ongoing impeachment proceedings against President Trump contributing to a general sense of unease in the markets. This has led some investors to seek out safe-haven assets, like gold, which has seen a surge in value in recent weeks. However, the coordinated action by central banks to address liquidity concerns has helped to mitigate the impact of this uncertainty on AUD/USD. Trade Tensions Finally, ongoing trade tensions between the US and China have also been a factor driving risk proximity for AUD/USD, as Australia is heavily dependent on Chinese demand for its exports. However, recent signs of progress in trade negotiations between the two countries, including the signing of a phase one trade deal, have helped to ease concerns and boost investor confidence. What Traders Can Expect in the Near Future Looking ahead, traders can expect continued volatility in AUD/USD, as the factors driving risk proximity are likely to remain in play for the foreseeable future. Ongoing trade tensions and political uncertainty in the US could continue to weigh on the markets, while positive economic data from China and central bank action to address liquidity concerns could help to support risk appetite and boost high beta currencies like the Australian dollar. Conclusion In summary, the surge in risk proximity for AUD/USD in early Asian trading was driven by a combination of factors, including central bank coordination, positive economic data, US political uncertainty, and ongoing trade tensions. Traders can expect continued volatility in the near future, as these factors are likely to remain in play. However, the coordinated action by major central banks to address liquidity concerns has helped to mitigate the impact of these factors on AUD/USD.
Short
by FOREXN1
3