All about Jackson Hole, Wyoming, Aug. 26-28, 2021.Not legal and financial advice;
Any information provided here is only the personal opinion of the author.
Jacksonhole
Special Gold pre-NFP UpdateGoodmorning traders and welcome to the most important day of the rest of the month. It is exactly 1 year ago when gold made its all time high at $2075.
The FED has two targets to raise interest rates and start tapering. The first is inflation above the 2% target per year (currently sits around 3.5%), so that is a check. ✅ The second is that the labor market gets going again, which is not the case thus far.
Today might change that:
🔹 If NFP rises above 870k (whispers are talking about 1 million+ jobs), then we will see a strong $100 bearish move on gold before the end of month.
🔹If NFP comes in as expected between 800k and 900k, gold will test the 1790 support zone and we remain in the month long range 1790-1835 until Jackson Hole.
🔹If we see NFP coming in between 600k-800k, gold will surely test the 1830 resistance zone, with an extension to 1850.
🔹Below 600k and it is game over for the gold bears and gold is ready for a rocket to 1900.
Arguments For Stronger Non-Farm Payrolls
• Employment component of ISM Non-Manufacturing rises to 53.8 from 49.3
• Employment component of ISM Manufacturing rises to 52.9 from 49.9
• Challenger job cuts drop to 21-year low
• University of Michigan Consumer Sentiment Index rises to 85.5
• Conference Board Consumer Confidence Index hits pandemic high
• Continuing Claims fall to pre-pandemic lows
Arguments for Weaker Non-Farm Payrolls
• ADP drops to 330,000 from 680,000
• Jobless claims have been missing forecast in the whole month of July and kept rising
🔮 My personal expectation is that NFP will miss the forecast and come in between 750k-850k and we remain ranging between 1790-1835 for the rest of the month. However, we can not ignore the charts and currently we have broken the bearflag and the daily is on the verge of creating a deathcross. All to played out in a few hours.
Goodluck, and keep your TP's close but your SL's closer.
Gold bulls' revenge will be sweet (Update 1)Hi guys,
Goldy is rangebound for over a week now and I am expecting a breakout this week. Today is the last day for Basel III, and I expect the metalbanks to start buying gold this week with ADP & NFP functioning as the fundamental catalyst.
Gold bulls have done a terrific job so far to de-accelerate the selling and dips are being bought pretty quickly. We have a beautiful golden cross formation on the daily timeframe, and a (very rare) bullish Harami candle formation on the weekly TF, which is a strong buy signal.
Still expecting a test of the 1750-1755 zone (maybe even 1740-1745), but for me it's pretty clear gold heading northbound after. Fundamentally we are still in the same situation and nothing has changed on the ground. USA is on an unsustainable path towards bankruptcy with the amount of debt that has been created.
There will be a tipping point in the near future that they need to increase interest rates to fight inflation (I believe much earlier than 2023), and once that happens the interest that the US government has to pay on their debt will be more than they can afford. The house of cards will collapse and no one that can do anything about it.
Until the FED actually starts tapering and/or increase rates, gold will remain bullish and I expect to hit my target zones before the Jackson Holy Symposium in August.
The summer holiday season is near and I will be less active in the coming time. After all, summer bankrolls are built in winter, and wintergains are spent in the summer :).
Love and hugs,
Cesaro
Gold - *RANGE BOUND* - Until it's broken. Will today be the day?What a great pair to trade recently!
Let me explain why - Currencies have lacked momentum of volume. Even though, gold has been range bound the moves has been a lot cleaner on scalp trades including silver too. However, today will be very critical which us trades much pay attention. Jackson Hole Summit, Powell to speak today about monetary policies longer term and various other speakers too during the day.
I will not be trading today, one because well when it comes to speeches it's very unexpected it could go either way and unfortunately i don't have crystal ball to predict the next moves but with the help of technicals!... I will be waiting for what will be being said two things to keep in mind from my last DXY post and I will repeat here today: If it is like the Feds minutes, no changes that's hawkish. If there is further change and more easing etc. that's Dovish. It's important to hold discipline wait 5-10 mins see where the market is heading.
Gold, key trend-line up. I wanted to see how the day closed yesterday we at this top of the range area and as well as that key area, drop below this trend-line up we have the bears in further control, which further decline will have greater opportunities. BUT if we do go above this range and trend-line up I have key profit ideas and resistance areas. I have a non-bias approach as I have written many times in my posts and that's probably best way to approach the markets we are in a CB heavy mode, what they do or say will shift the markets dramatically.
Today keep an eye on: EURO, GOLD, SILVER, DXY, 10 YR Bonds & SPX.
Just a trade idea, not a recommendation.
Trade safe,
Trade Journal
Breakthrough and triangle! Hello, today is an extremely important day. We are waiting for the press conference of Jerome H. Powell and the movements he will provoke.
One option that looks good is USDCHF. Here we have a break of the downward trend and then the development of a triangle. This triangle will most likely be broken today! We expect to see a rise, as trades are recommended to be made after a breakthrough.
Resistance levels:
0.9212
0.9309
0.9361
Of course we are ready for surprises!
Be patient!
Support us with likes and comments!
Balance, G7 and Jackson Hole outcome, problems of GermanyTrump: China is ready to go back to the negotiating table. China, for its part, reiterated its desire to resolve trade problems through negotiations. safe-haven assets against this background have slightly adjusted and provided excellent opportunities. Despite the optimistic comments from Trump’s side as well as Chinese, everything might change. We have recently observed something similar and buying safe-haven assets tactics on the descents over the past few weeks was the right decision. So our recommendation is to buy gold and the Japanese yen. The only thing, given the increased volatility, do not forget to set stops - it is better to re-enter.
The G7 meeting results can be called insignificant. We did not hear any revolutionary statements. So we believe that this event is already “played out” and taken into account.
As for the Jackson Hole symposium outcome, there was a lot of concern, but representatives of the Central Banks have stated that crisis and cyclical issues need to be solved not only by monetary methods but also by fiscal ones.
Returning to Powell’s speech on Friday, he did not say anything fundamentally new and did not clarify the current state of affairs. Nevertheless, our position on the dollar is unchanged - we are looking for points for its sales.
As for the euro. Data on the business climate in the largest economy of the Eurozone (Germany) again frankly disappointed. The IFO business climate index in August came out worse than expected 94.3 with a forecast of 95.1. This is the minimum value for the last 7 years. Therefore, markets expectations as for the monetary policy easing only intensified. So it’s better to wait a while with euro purchases. But its sales against the pound or the Japanese yen look like good trading ideas.
TRADERSAI - A.I. POWERED MODEL TRADES for Today, FRI 08/23Horror Stories From the G7 and/or Jackson Hole Over the Weekend?
Investors seem to be fretting over the potential for market horrors to unfold over the weekend involving unexpected headlines from the G7 summit or the Jackson Hole. Add to this the Friday options expiration plays and we have got a recipe for chaotic and inexplicable moves today, especially during the afternoon session. The yield curve could still be another curve ball (no pun intended).
Read below for our models' trading plans for the day. Good luck with your trading and/or trading education!
tradersai.com
#ES #ESMINI #SP500 #SPX #SPY #Fed #China #Yuan #Yields #Rates #Tariffs #Tradewar #recession #Fed #G7 #JacksonHole
$CNY: Moving higher$CNY is higher than the initial breakout which caused mass panic among the macro tourists on TV. Instead all eyes are on the hapless Fed Chair who shall be known as the man who crashed equities markets. Equity markets will get spooked regardless whatever Powell decide to do. A hold means money's too tight, a full blown rate cut program means an acknowledgment that fundamentals are in the gutter. Jackson Hole is just another step closer to the end game which the bond markets have been signalling for ages. Wakey wakey for folks still buying equities.
Back to the USDCNY, it is a breakout so it is going to go higher. As previously mentioned, the bid ask spread between the US and China in this trade war is too far apart and the FX is an adjustment mechanism to the tariffs especially when the Chinese have been keeping the RMB artificially STRONG .
TRADERSAI - A.I. POWERED MODEL TRADES FOR Today, THU 08/22(these plans were published at tradersai.com much earlier - re-posting it here for your easy reference; please subscribe at tradersai.com for free - no credit card required - if you want to be able to view the posts as soon as they are originally published)
PLEASE NOTE that the chart shows a short level at 2921 (from yesterday), but it is updated to 2918 (the text of the trading plans show the correct level of 2918 but the chart does not; not sure how to change the level on the chart once published, hence this note)
Powell in Hole, Esther on Accommodation, Yields in Inversion...
Fed Chair Powell's speech at Jackson Hole tomorrow is going to be watched very keenly and parsed feverishly, and can set the tone of the trading for the next week. Kansas' Fed Esther's comments that July rate cut was "not necessary" could be setting the tone for Powell's speech? May be, may be not - but, the FOMC meeting minutes released yesterday coupled with her comments today could have some on the markets worried.
Add to the above the inversion in the yield curve, and we have a potential storm brewing. The unwinding of it all could jolt the markets out of the range they have been stuck in for the last few weeks. Read below for our models' trading plans for the day (mostly unchanged from yesterday's). Good luck with your trading and/or trading education!
tradersai.com
#ES #ESMINI #SP500 #SPX #SPY #Fed #China #Yuan #Yields #Rates #Tariffs #Tradewar #recession #FOMC
NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) The results of these indicated trades would vary widely depending on the timeframe you use (1 minute, or 5 minute, or 15 minute or 60 minute etc), the quality of your broker's execution, any slippages, your trading commissions and many other factors.
(iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
FED vs. POTUS... who will push the dollar more? Find out on the next episode of Dragon Ball DXY...
Or we could just guess with what we know now like any analyst. Expecting fed meeting minutes to state what the fed members are stating already, they believe the economy is still resilient and does not need too much expansionary policy, cuts above standard aren't necessary, etc. These statements will reassure many regional institutional investors who put faith in the FED and are confident in their outlook... but investors in other parts of the world who don't like the current leadership of the country or what said leadership is doing to economic relations may not feel the same. It's possible we could see similar unrest in the markets like last week depending on whatever tweet happens to be sent out between Thursday and Friday. While I believe were no where near a scenario where a 100bp cut is necessary, with bond yields inverting and Trump's war on China grinding the global economy, international outlook for the dollar may not be as optimistic.
All the same I've drawn out a possible double top scenario I'm picturing as the dollar approaches exhaustion towards the upperside of its range and supply pressure increases from international investors searching for better options. Previous bearish analysis was invalidated so I'll be watching with a neutral perspective as I avoid the dollar this week. But I wouldn't be surprised to see an overall bearish move by end of the week.
Waiting for Jackson Hole, riot in Britain and ruble problemsWe have already noted that this week promises to be calm but The Jackson Hole Economic Symposium is an annual symposium, traditionally gathering representatives of all the leading Central banks in the world, might give enough reasons for bursts of volatility.
The most vulnerable are the euro and the dollar. Weak inflation in the Eurozone (yesterday's report showed that consumer inflation in the Eurozone fell by 0.5%), So the euro is definitely in danger.
As for the dollar, Powell's performance is scheduled for Friday expecting from him a hint to the next Fed rate cut in September. It will be a hit to the dollar. We consider the current dollar growth an excellent opportunity for its sales.
Meanwhile, in Britain, a statement by opposition leader Jeremy Corbyn that he promises to take any action just to prevent an exit without a deal is gaining momentum. As a result, the issue of early parliamentary elections is being increasingly discussed in the media. And although in any other situation we would say that this is a negative sign for the pound, in this particular case, early elections are more likely positive, since they reduce the likelihood of a “no-deal” Brexit, therefore this is the reason for the pound to grow. So the descent of the pound paired with the dollar of 1.21 is a good opportunity for the pair to buy: both on the intraday basis and medium-term positions.
Given that there is a chance that the pound value might growth this week, and the euro, on the contrary, a decline, it makes sense to pay attention to the sales of the EURGBP. This can be done simply from current prices.
Another promising deal continues to be sales of the Russian ruble. And although it has already lost quite a lot of its value, the potential for its decline is far from being exhausted. Argentina scared investors around the world and showed how it could be dangerous to invest in risky assets. So the already “toxic” ruble has become even less desirable. In this regard, recall our recommendation to buy USDRUB. We advised buying it when the pair fluctuated around 63, but even now the pair’s purchases do not look hopeless.
Total, today we will sell the dollar primarily against the pound and the Japanese yen. Also, we will sell EURGBP, as well as the Russian ruble. Gold continues to be an extremely interesting asset for short-term speculative trading. In the current uncertainty, we choose the tactics of oscillatory trading without obvious preferences, that is, we buy in the oversold zone and sell in the overbought zone (as a guideline, it is quite possible to use classic RSI oscillators or more advanced versions of oscillators developed by our experts for a deeper analysis of the price dynamics).
Key points of the Jackson Hole meetingThe Fed and ECB chiefs have kept their promise not to touch on the monetary policy issues in Jackson Hole, but Janet Yellen has suddenly succeeded more in that. The dollar lost ground on Friday after the release of text version of Yellen speech which was generally useless for investors. The absence of any clues was a signal for the reduction of dollar positions and increased concerns about weak inflation in the US.
In general, the head of Federal Reserve used the Jackson Hole platform for self-vindication, speaking in defense of post-crisis reforms, QE, free trade. Globalization in the opinion of Yellen is the key to international economic stability, as it contributes to raising living standards and accelerating technological progress. On the flip side this process contributes in widening the wealth gap through moving jobs to regions with cheap labor, off-shoring, which strikes the middle class and is possibly the fundamental reason for the current slowdown of inflation.It should be noted that in the conditions of fencing off from the world economy pursued by Trump, the tools of the Federal Reserve and the ECB can significantly lose flexibility and efficiency.This implicit criticism of the president's protectionist plans clearly reveals the friction between Yellen and Trump, and raises big question on the extension of her term expiring in February 2018.
In turn, Mario Draghi expressed his fears that populist rhetoric and the desire for protectionism could negatively affect the productivity of labor, in particular, jeopardize the prospects for its growth. It can be assumed that globalization processes preserve for the world economy some medium-term expansion potential and its some uniformity, which allow the Central Bank to rely on this fact to build future monetary policy. Much more information weight in Draghi's speech was a comment about justified appreciation of the euro, meaning that the ECB will not take any efforts to contain its growth, including verbal interventions. Such a nod from the official goes against the protocol of the July meeting, which said that too strong a currency makes officials nervous, creating the risk of "overshooting". ECB head publicly refused to repair the barriers for the European currency, causing a sharp rise in EURUSD above the 19th figure. Among other "delicious" details was the promise of Draghi to carry out the most painless cuts in the money supply, but when this happens is yet unknown.
Now the chances of breaking through the psychologically important level of 1.20 are much greater, however, the bulls are not likely to gain a foothold higher before the release of the NFP on Friday. Strengthening the labor market and the peaceful tone of Yellen suggest that the Fed allows for a further reduction in unemployment, in order to see which next minimum initiates the acceleration of inflation.
Gold updated highs, as Hurricane Harvey in the United States forced investors to seek enhanced comfort in defensive assets. Despite the fact that the natural disaster struck directly at the heart of the US energy industry, oil futures did not respond properly to supply interruptions. While Brent added 0.40% while trading at 52.19, the barrel of the WTI lost about 1%, trading below $ 48. Because of the hurricane, it was necessary to cut about 10% of the production capacity, which is likely to be reflected in a greater drop in inventories in the API and EIA reports.
Brief overview before the Jackson Hole meetingThe German economy has revealed signs of slowdown, despite the widespread economic pickup in the euro area and the concomitant strengthening of the euro. A number of data released on Friday pointed to a slowdown in exports and imports in the second quarter. Investment optimism also declined, probably due to the strengthening of the euro, overshadowing the favorable outlook for exporters. As a leading indicator, a slowdown in investment in the leading euro-zone economy could undermine both the economic expectations that until recently were close to buoyancy and to harm inflation expectations struggling for their place in the positive macroeconomic background. The assessment of the current economic situation according to the IFO report turned out to be several points worse than the forecasts, but still quite optimistic.
Nevertheless, the European currency remains almost immune to economic statistics, fully focusing on the event in Jackson Hole. Despite the fact that the topic of the speech of the heads of the Central Bank sounds like “Fostering the growth of the global economy," it is likely that officials will dwell in detail on assessing the economic situation of countries, as well as instructions on how the money supply in the economy will be regulated. Investors expect that Draghi will usher in the ECB meeting in September, saying that the economic momentum gained by the Eurozone allows the ECB to retire, but the current state of affairs is clearly not in favor of this version. Inflation targeting is taking place with very modest success despite huge injections, the European currency surpasses its fundamental growth rates, and the gap in the region's leading economies with laggards is very sensitive. Stock indexes on historical peaks suggest that asset buying has become a bottomless source of financing for European companies, a sort of "symbol of stability" for stock investors. It is possible to trace the relationship of incentives with the growth of hiring, the increase in employment, but consumer demand remains weak, as soft credit conditions have hardly affected such a macroeconomic agent as households.
In my opinion, the need for fresh solutions will push Draghi to announce radical changes. Including the reduction of buying bonds, since it is obvious that the ECB is feeding completely different sectors on which stable inflationary pressures depend.
For Janet Yellen it's all a bit easier. Despite some slippage with the December rate hike, which is still in doubt, the head of the Fed needs to once again plant the idea of safe QE cuts in minds of investors. In order for it to pass most painlessly without explosive growth in yield on the debt market and the release of inflation out of control. There is a possibility that she will again mention the pause in inflation and will report that the economy will withstand another increase, then a bullish correction is inevitable. The Fed Chairman's confident tone is the outcome on which the markets are oriented, since the dollar is ripe for correction, you just need to pull the trigger. Therefore, I believe that Yellen speech will be examined with a slight tinge of bullish bias and wagers on dollar rally in this case are make sense a lot.
Arthur Idiatulin, Tickmill analyst
EURGBP - Bullish GartleyWe have a bullish Gartley setting up on the EURGBP with an entry that aligns with previous structure.
There is nothing bullish about the Pound, and if Mario Draghi fails to specifically address the exchange rate/detailed monetary policy again tonight then we should see further upside to this pair.
All the best,
Mase.
EURJPY - Bearish Bat PatternGood evening traders,
There is a bearish Bat pattern forming on the EURJPY up at the 1.30100 level that we will be looking to enter only if the moon (price) and the stars (Mario Draghi, Jackson Hole) align.
We're hoping for a return of more volatile markets, and Jackson Hole could well be the catalyst.
Have a plan and trade it.
All the best,
Mase.
GBPUSD: Showing the first bullish signalsWe can enter a 0.5% risk long in GBPUSD to get started and then add in the coming days, and tighten the stop as well.
The short term trend has shifted to the upside, and now it's in sync with the daily chart, which shows a potential low is in place, specially confirmed if we don't hit 1.2799 in the next 3 days.
Let's see how this evolves.
Good luck,
Ivan Labrie.
DXY/ USD: THE WEEK AHEAD - ITS ALL IN THE CHARTDXY:
1. Given the firming of USD STIR/ Fed funds following Yellens JH remarks and the markets hawkish reaction i still think there is another % or so of topside to be priced into USD topside.
- Fed funds implying 36% probability of a Sept hike - the highest implied prob in 3 months - hence given cables 50pip appreciation i feel theres another 100pips here to be priced at least in the fron end (tuesday/weds) of next week.
2. The 1yr MA and then the 6m highs are the next targets higher at 96.5 and 97.5 - i feel the market can move to 96.5 based on the steepening of the fed funds curve (now implying 1 hike at close to 100% for 2016 vs 70/75% previoiusly) at the front of next week but then we will need a firm NFP beat to move to the next level higher at 97.5 or 6m highs.
3. Dollar index aside, gbpusd is my favourite expression of long USD aside from DXY - profit target of 1.300/5.
DXY/ USD: FED LOCKHART, MESTER & BULLARD SPEECH HIGHLIGHTSFed Lockhart Speech Highlights:
Lockhart: Tepid Business Investment Plans Raise Questions About Growth
Lockhart: Uncertainty A Real Factor For Economy Right Now
Lockhart: Fed Rate Policy Will Be 'Cautious And Gradual'
Lockhart: 'No Gun To Our Head' To Raise Rates Quickly
Lockhart: Two Rate Rises Remain Possible, One Likely This Year
Fed's Lockhart: There's Some 'Haze' Around Economic Outlook
Lockhart: Doesn't See Major Bubble Risks Right Now
Lockhart: Brexit Related Risks Seem To 'Have Settled Down'
Lockhart: One Rate Rise This Year Likely 'Would Be Appropriate'
Fed's Lockhart: 2Q GDP Data Misleading Read On Economy
Fed Mester:
Mester: Economy Should Pick Up Over Second Half Of Year
Mester: Timing Isn't Key Issue For Rate Rises
Mester: Gradual Upward Path For Rates Remains Appropriate
Mester: Every Fed Meeting Is A Live Meeting
Fed's Mester: Economy Is 'On A Good Track'
Fed Bullard:
Bullard: Fed Has 'Quite A Bit Of Firepower' Right Now If Needed
Bullard: Negative Rates Not Likely For US
Bullard: Fed Doing 'Pretty Well' On Its Job, Inflation Mandate
Fed's Bullard: Dot Plot Not Telling Rate Story About Rate Outlook
Bullard: What Fed Up Activists Seeking Is 'Kind Of Crazy'
Bullard: Monetary Policy Has Been 'Doing Pretty Well'
Bullard: Inflation Is Not Far From Fed's Target
Bullard: Fed Hurting Credibility With Bad Guidance On Rates
Bullard: Understands Financial Risks Could Get Away From Fed
Bullard: Fed Will Need To Use Judgment On Bubble Issues
Bullard: Fed Should Not Be On Cusp Of A Bunch Of Rate Hikes
Bullard: Ideal For Fed To Raise Rates On Good News
Fed's Bullard: 'Agnostic' About When Fed Should Raise Rates
Bullard: Doesn't See Asset Bubbles Right Now
USD/ZAR Far negative net volume level !!!!Far negative net volume level, followed by corrective movement, does it make sense or not?
It seems appropriate to close positions or hedge with options time.
When the market does not teach his game, it is more likely that we are the ball.
www.fxstreet.com
Sticking To Dax Bull CaseYesterday's candle was actually bullish. Long-legged candles signal reversals, even if the intraday selloff may have suggested otherwise. The key message: breakout levels ~10490 were tested (violated), but held. Index is off to a fresh swing higher, which could target 10860 (late December high) and 10981 (cycle fibo level).
With that in mind, yesterday's mini reversal in Gold, and GBP strengthening vs. USD, are short-term technicals suggesting we are getting a dovish Yellen at JH?
