Powell
USDJPY+FOMC+BOJThe chart tells 2 stories. First, the rate drop July 30th. 7 days of strong downward trend, afterward. News spike, comfort zone, FED minutes...........Powell Speaks, the market reverses the following monday. Even though bonds maintained a solid downtrend UJ wanted to recover. As it always does, thats why this pair is the only pair I trade. Its the best for exactly that. But soon I feel this range will end. Allowing Japans currency to continue the rise. This would push Japan to becoming a superpower as their economic model shifts into the new age, leading the way. This of course takes time but moments like these are at the turning points in history, before something big happens? Or will it be where the market just consolidates.
After Powell's speech, the market reverses last wednesday sept 18th within range of the HTF downward trend line, on the HTF. Another Rate Drop, right at the same location.
The market tries again to break the trend (not really just everyone loading up hahaha), right as Quarles FOMC member makes a public appearance, the market begins to see head winds.
And here we are now,
SPY remains with a specified range range:
$281.72-$294.15
Going long the lower end of the range and shorting the upper end of that range has been profitable for the past few trading weeks.
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.
Dollar fails Powell’s test, China and Trump keep tensionsFor the whole last week we were waiting for a symposium in Jackson Hole to be held (The Economic Symposium, held in Jackson Hole, Wyoming, is attended by central bankers, finance ministers, academics, and financial market participants from around the world. ). Fed Chairman Jerome Powell's speech on Friday was the main event. The markets were waiting for the “official” confirmation of monetary easing by the Fed, the ECB and other central banks.
Attention focused on a speech by U.S. Federal Reserve chief Jerome Powell for news on whether it will cut interest rates for a second time this year to boost the world's largest economy. But at the same time, he did not specify a time limit.
China intends to raise tariffs on US imported goods total $ 75 billion the decision was made in response to the USA. Besides, the import tax on American cars and auto parts will be increased.
Trump, of course, reacted extremely nervously to such actions by China, promising to take retaliatory measures. China has a deserved reputation for intellectual property theft. On Friday, Trump estimated China robs the US of “hundreds of billions” a year in ideas. So there is a reason to believe that a very hot and hectic week awaits us. In this light, buying safe-haven assets seems like a good trading idea. But once again we note that the choice of the entry point is extremely important.
The upcoming week promises to be calm. Attention should be paid only on the US GDP. Otherwise, the attention will be focused on the confrontation between the USA and China, as well as the Fed.
Our trading preferences this week: selling the dollar, finding points for buying gold and the Japanese yen, buying the British pound and selling the Russian ruble. Also, oil sales seem appropriate.
Euro suffers, pound is growing, & dollar waits for PowellPowell speaks in Jackson Hole that is what everybody is waiting for. Fed minutes from the meeting also showed the lack of unity among the Fed members. That might lead to the fact that the rate can be either lowered in September or left unchanged. That is complete uncertainty. That is why Powell's comments are that important.
Markets still believe in the rates cut, and afraid to sell the dollar without any existing facts. So Powell’s “pigeon” comments are capable of setting off dollar selling in the foreign exchange market. Therefore we recommend the short dollar. However - if Powell does not give any clear comments, markets may perceive this as the Fed’s unwillingness to cut the rates in September, which could lead to a wave of dollar purchase
Statistics on business activity in the Eurozone and the United States came out.
As for the data from Europe on the one hand, the Eurozone Composite PMI was better than expected above 50, as was the PMI in the services sector. On the other hand, data from Germany showed a sharp deterioration in the situation, and at the highest pace over the past 6 years: respondents are expecting production to decline in the foreseeable future.
The United States also upset. PMI indices came out much worse than expected, and the manufacturing index generally came out below 50, which indicates a reduction in business activity in the United States.
The publication of the last ECB meeting minutes showed that Central Bank officials at their meeting on July 25 discussed the benefits of combining two measures to lower interest rates and bond purchases. Recall that the ECB left its policy unchanged last month, but made it clear that it was preparing to reduce its already negative rate and resume buying bonds in September.
So, the euro does not look like the best thing to buy. We recall our recommendation to sell the euro against the pound.
Moreover, Johnson is stepping up towards agreeing with the EU. Even though Europe in every possible way welcomes his efforts: in particular, Merkel believes that a new deal with Great Britain is possible before the end of October. In general, the Big Seven Conference may be a kind of breakthrough in the stalemate with Brexit. We have strengthened our desire to buy the pound, especially at extremely attractive current prices.
EURUSD: Watch for Rebound at Previous LowAs boring as this week's market is, I think that every good trader should cultivate a high level of patience.
Imagine trading within the tight range throughout this week, chasing after every rebound at the range bottom.
Either you have spent a great amount of time to make very little profit or you have made losses due to impatience and impulsive trading.
It's already the last trading day of the week and the market calmly awaits Powel to deliver his speech.
If the market does give a chance and EURUSD retest its previous low, I think it's a fairly good trade to buy the low on the first retest.
As long as the Fed doesn't shift away from a near-term rate cut, EURUSD should stand a good chance for a significant rebound after all the accumulation throughout the week.
$CNY: Moving higher$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 .
AUDUSD - Short - Post FED Minutes We currently see AUDUSD dropping further despite not much price action in either direction after the release of the FED meeting minutes. This is because as expected from Powell's Post FED meeting Speech on the 31.07 the minutes indicated there would be no further rate cuts going forward. This coupled with the presumption that the CBA would be forced to cut rates again twice this year due to the weakness of the Australian economy and the US putting 10% tariffs on Chinese goods from December. Therefore we see AUD/USD falling below 0.67 towards the 0.66821 support level.
Johnson takes a step forward, Strong dollar and gold - Why ?The growing strength of the United States dollar has already fed up with a lot of things, Trump and American exporters to traders and analysts who have bet and continue to bet on its decline. Quite a long time ago, we have turned to dollars bears and also not enthusiastic about its unwillingness to decline. So it is time to find out the reasons for its strength.
According to the dollar’s reaction to the Fed’s rate cut at the last FOMC meeting, it’s not about US interest rates. They are not that high to provoke an influx of speculative capital.
“It’s natural for the dollar to be strong,” said Daisaku Ueno, chief currency strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “Trump is waging a trade war against economies that earn a surplus from the U.S. and making the strong American economy even stronger.” On the one hand, investors are scared so they “hide” in US government bonds, which stimulates the dollar demand and strengthens it. On the other hand, Trump's protectionist actions help the US economy, to the detriment of partner countries, which again has a positive effect on the dollar value ( in response to US trade aggression, other countries devalue their currencies which artificially strengthens the dollar).
According to the Bigmack Index, the dollar is one of the most overvalued currencies in the world. So we continue to recommend selling the dollar, especially ahead of Powell's Friday speech at the Jackson Hole Symposium.
In this light, the legendary investor and Mobius Capital Partners LLP founder. Mark Mobius encouraged all investors to buy gold with any marks. He believes the reduction of interest rates by the Central Banks, making gold an increasingly attractive investment target. It becomes a reliable basis for long-term gold growth.
As for our position for gold, it is still unchanged: intraday oscillator trading without obvious preferences, that is, we buy in the oversold area and sell in the overbought one (as a reference, classic RSI oscillators can be used or more advanced versions of oscillators developed our experts for a deeper analysis of price dynamics).
And finally, we note the first hints of possible progress in the agreements between the EU and the UK. This is the first public attempt by Boris Johnson to engage the EU in the negotiation process to develop a new version of the agreement on the withdrawal. And although this is only the first uncertain step towards. So we only strengthened our recommendation to buy the pound from current prices.
EURUSD Short Crucial Week FED minutes/ Jackson HoleEURUSD has been dropping since our last analysis on the 12.08 and we are at a crucial stage if we can break the $1.10959 support level we expect further downside. However, this is a very a important stage for the currency pair as FED Minutes on Wednesday and Chairman Powell's comments at Jackson Hole will likely lead to significant volatility and price action. This is particularly the case if the FED changes it's rhetoric on further interest rate cuts in the near term and indicates there will be further rate cuts.
Trump and Powell confrontation and current marketsLast week proved quite eventful for financial markets. More than we expected.
The Federal Reserve cut its fed funds rate on Wednesday by 25 basis point to a range of 2% to 2.25%. Fed Chairman Jerome Powell said, “It's not the beginning of a long series of rate cuts,”. The current rate cut is a reaction of the Central Bank to an economic slowdown, and its further actions will depend on the state of the economy. The Fed also noted the trade war negative impact on the US economy.
Trump shocked the markets in May by hiking tariffs to 25% from 10% on $200 billion in Chinese goods. China immediately retaliated and said a trade deal will not be reached unless the existing duties were stripped. In this light, the safe-haven assets are needed to be bought.
As a result, Interactive chart of historical data showing the broad price-adjusted U.S. dollar index published by the Federal Reserve has shown its MAX since 2017.
The Banks of Japan and England maintaining the existing structure of the financial system have decided not to change the existing status.
A new round of the trade battle between the United States and China. “The U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country,” says Trump in a tweet. China quite naturally replied that it would respond adequately.
Nothing foreshadowed trouble. On Monday, American delegates arrived in Shanghai. Although that did not bring any special results, the parties agreed to meet in September already in the United States. That is, it would seem, there is a certain process. And here Trump comes out with his statements. We have a small conspiracy theory about this.
Pay attention! The time when Trump announced a new round of trade war is similar to the Fed’s decision the reaction and Powell’s comments as well, which led to a rise in the dollar price. Recall, Trump is extremely dissatisfied with the strong dollar, but, despite all his criticism of the Fed and Powell, the US Central Bank continues to bend its line, ignoring the requirements of the President. What Trump has to do if it is not possible to push through the idea of currency intervention, for now?
He has only one tool of indirect influence - trade war. Its escalation will force the Fed to lower the rate further, which in turn will drive to a decline in the dollar value as a reaction to the cycle of depressions.
Another important event last week was the publication of statistics on the US labor market. The NFP came out worse than forecasts, but on the whole, the value is sufficiently neutral (although we note that the June’s job report has revised down by more than 30K).
Our position on the dollar remains unchanged - we recommend selling it. Escalating trade war increased the likelihood of several Fed rate cuts in 2019. Data on the NFP signal a slowdown in the US economy and Trump makes it unequivocally clear that he intends to “fight” a strong dollar. So the current week we declare a week of dollar sales.
Besides, it makes sense to buy safe-haven assets. Remember, sell the Russian ruble and oil.
The last time the FED starting cutting Rates..... Please have a look at the last time that the FED began lowering rates; they began with 25 basis points, and they ended at ZERO percent.
FED statement / how many cuts?The fed is set to talk today.
As you might know, the fed states his decision based on
If J. Powell uses the words "Risk balance". The stock market is in BIG TROUBLE.
What this would mean is he would cut rates only once . And the market has already baked in at least 3 more.
IF J. Powell used the words "Going forward". The stock market might be in trouble, but short-term, we are going UP !
*Note
Volatility is low
EURO LONG NOW OR NEVERLooking at the monthly EUR/USD chart the confluences are more so evident. The Stochastic Oscillator showing divergence of the lows. Price currently sitting just below the 61.8% Fib retracement, You can see the ascending channel beginning to form with our 1.3900 handle target being confluent with channel resistance and the D2 Fibonacci extension -61.8% respectively. I want a monthly close on Wednesday after the rate decision above the 6 month EMA and above the 1.1300 handle to confirm the start of the next leg up. This will also couple with a EURO Long summer rally. X MARKS THE SPOT
EURO LONG NOW OR NEVERAs far as risk goes you have to.. for the biscuit. We see Multiple technical confluences surrounding the 1.1170 handle with an X marks the spot scenario. Quarterly chart implies a continuation of the long term up trend for the pair.
We are sitting around the 61.8% Fibonacci retracement level and have support from an ascending and descending trendline. With the possible US rate cut later this week we could have the catalyst needed to get the ball rolling. With a 50bp cut the EUR/USD could be sent back above the 1.1300 handle by the monthly close on Wednesday. Speculatively we are looking for the 1.3900 handle being respected at some point in 2020. The 1.1700 handle will be met by the end of the year.
EUR/USD losing momentum ahead of important US reportsThe EUR/USD pair is printing an indecisive candlestick after a bull run last week, signaling that market participants are taking a break to assess latest news from the Fed.
The USD consolidation phase may not last long as important US reports are scheduled for tomorrow: US retail sales, core retail sales, and Fed's Powell is delivering a speech.
The pair will likely continue to trade sideways until markets get a clearer picture of the future US monetary policy.
We're overall neutral/bullish on the pair. The price made consecutive higher highs and higher lows since May, and we've already traded the recent wedge breakout combined with a hidden bullish RSI divergence.
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Consequences, oil surplus & dollar in troubleThe previous week provided quite eventful for the financial market. Now, the market expects the Fed to cut the interest rate this month. The probability of such outcome is 100%. So, there is a conundrum, reducing by 0,25% or 0,5 %? After two days of Fed Chairman Jerome Powell's testimony to Congress making the US dollar a weak player as a short dollar.
The current downtrend is just a beginning as the US dollar is at extremum point. In addition, as the USA monetary policy has shifted supporting bearish trend. The one and only important data will be Retail Sales Report in the USA, therefore, we sell the dollar.
Force majeure events are near term and not supporting the current market conjuncture that has been named as long-term Surplus. International Energy Agency 2Q 2019 the surplus was 900 000 b / d. As we can observe the OPEC + No. 2 did not precipitate the commodity deficit.
Since 2011 oil consumer demand growth rate is at its lows, we will sell the oil.
Trade war is the reason for all the trouble the economy is facing. China reported a data pact with macroeconomic data: GDP and industrial production growth rate, retail sales indicator.
Despite the fact that the outcome is better than expected, GDP growth was 6.2%, which is below the minimum mark of 6.5%, which the Chinese Government put in its long-term development strategy.
Earlier, China reported a decline in exports by 7.3%, and Singapore (one of the world's most export-dependent economies) reported a decline in GDP in the second quarter by 3.4% (the maximum decline since 2012).
Our trading recommendations for today are as follows. We continue to look for opportunities to sell the dollar in almost all pairs (USDJPY, EURUSD, GBPUSD). Sell the Russian ruble and oil. We continue to sell the oil near the highs and buying from the lows.
Trump PUT carries market to all-time highsCheap, low interest rate money carries us to all time highs (market top april 21, 2021) and then sinks us.
Predictions:
Trump is reelected in November of 2020
Interest rates are lowered to near zero
There is some type of mass credit/lending fraud
Tech bubble bursts. Investments in companies with no real path to profitability are abandoned. NASDAQ 100 losses in 2021-2022 outpace S&P 500.
Exodus from ETFS. Investment/Asset management industry hit hard as well
What is behind the gold and oil growth & Powell again signals Perhaps the main event that jogged financial markets and had effected on the momentum of oil prices valuations, as well as gold prices, was an incident in the Strait of Hormuz. This time the United Kingdom and Iran were involved. Three Iranian warships tried to block the passage of the British company BP tanker. A British warship offset the attempt, but the tension is increasing in the region. So, the gold and other safe-haven assets’ price increase was sharp yesterday.
This week, the fundamental background is on the bull's side with respect to oil. In addition to the above-mentioned incident, the reduction in US reserves, tropical storm Barry likely to form in the Gulf of Mexico, and threats from Trump regarding a toughening of sanctions against Iran supported oil buyers.
The Bank of England yesterday published its financial stability report. The most interesting that was published was the likelihood of the Great Britain exit “scenario” without a deal has grown, which in turn can provoke negative consequences for the British economy. However, the pound reacted calmly to this report. So our position is unchanged - we are looking for points for its purchases.
Day two of Fed Chairman Jerome Powell's testimony to Congress, he noted that the current rates are in the neutral area, however, there is a chance that the Fed might cut the rates. At the same time, the markets are more confident with a rate cut in July. They are more likely guessing about the question “For how much it will be lowered” by 0.5% or by 0.5% at once. So far ¾ support the first variant. Recall, this is quite a bearish signal for the dollar. Analysts are revising their dollar forecasts downward. Recall, we remind you about the feasibility of selling the dollar on the foreign exchange market.
Friday promises to be a “rest stop”. And this means that participants in financial markets are likely to continue to follow the current trends.
Our trading recommendations for today are as follows. We continue to look for opportunities for selling the dollar (USDJPY, EURUSD, GBPUSD). Sell the Russian ruble. Sell the gold near the highs and buy from the lows.
GBPUSD Daily Update: Sterling faces buying pressureHi traders.
We've started a new section in our TradingView profile with daily updates for major pairs, gold, oil, and indices.
The GBP/USD pair is trading significantly lower after triggering an H&S pattern - a setup that we shorted in our Trading Club and posted here on TradingView.
The previous week, markets dumped the pound on views that the UK economy is slowing down and that the BoE will likely need to adopt a looser monetary policy - in line with other major central banks.
As a result, the GBPUSD pair fell to levels not seen in years (ignoring the Jan 03 flash-crash).
However, the last two days have been beneficial for the pound, not only because the price reached strong horizontal support, but also because markets started to price in a higher chance for a US rate cut.
Still, the pair trades in an overall downtrend and we won't buy it until we receive more signs of a trend reversal. The RSI formed a triple bullish divergence, suggesting that we could see higher prices in the coming days.
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EUR/USD Daily Update: Bull run continues for second day.EURUSD has continued its bull run for the second day, after breaking out of a bullish wedge pattern and reaching near a horizontal support zone.
From a technical standpoint, the higher highs on the daily chart suggest that an uptrend is forming.
Yesterday's dovish testimony by Fed's Powell put selling pressure on the greenback as markets place a higher possibility for a rate cut.
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Fed Protocol, BoC, and the UKAs we all know “the market is addictive to news”, it is not wondering that yesterday’s testifying to Congress by Fed Chair Jerome Powell, the announcement of the Bank of Canada decision on monetary policy, as well as a fairly extensive block of statistical data from the UK, led to increased volatility in financial markets.
Let's analyze these events in chronological order.
Great Britain relaxed quite positive data, which triggered the pound growth. Recall, we recommended its purchases, so those of our readers who looked up to our advice made good money. GDP and industrial production value have increased we cannot but mention the data on construction and trade balance that pleasantly surprised, appeared much better than forecasts.
Bank of Canada holds interest rate steady, Federal Reserve Chairman Jerome Powell said that rate cut is not a panacea.
Jerome Powell’s testimony at Congress. Markets expected him to make statements/comments about the Fed rate cut. However, Powell noted that the risks remain steady for the US economy, due to business investment slow down caused by the trade war, while inflation remains weak, which suggests that interest rates might be reduced this month.
After Powell's testimony, the minutes of the last FOMC Fed meeting were published. Which only strengthened markets confidence in lowering the rates in the USA. The discussion of the Fed members about the prospects for monetary policy at the last meeting showed that there is a strong bias towards cut rates.
The result is a short dollar. But inflation statistics from the US, as well as the second day of Powell’s testimony, may well trigger a rise in volatility in pairs with the dollar.
Our trading recommendations for today are as follows. We continue to look for opportunities for selling the dollar (USDJPY, EURUSD, GBPUSD). Sell the Russian ruble. We are looking for points for sales of gold, which again climbed very high.
