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S&P 500 forecast: Outsized rate cut music to bulls’ ears. S&P 500 forecast: The US stock market has shown impressive resilience following the recent volatility. Investors, thrilled by the Federal Reserve’s outsized rate cut, have pushed index futures higher. However, there are mixed opinions about what lies ahead. For now, it looks the S&P 500 will finish the week at a fresh record high. Fed’s Rate Cut and Its Impact on Markets The Federal Reserve’s decision to deliver a 50-basis point rate cut was largely welcomed by investors. The move was seen as a bold but necessary step to ease economic concerns without sending panic signals reminiscent of the 2008 financial crisis. Fed Chair Jerome Powell emphasised that the cuts are not part of a long-term strategy but rather a proactive measure aimed at stabilising growth, now that inflation appears to be on the path of returning to its target. Markets initially sold off but quickly rebounded, with S&P 500 futures suggesting a potential new record high is on the horizon at the cash open today. The Dot Plot projection also boosted investor confidence, showing a possible 50 basis points of cuts this year and 100 next year, with the terminal rate expected to hit 3.0% by 2026. But what now? Can the S&P 500 Rally Continue? With the S&P 500 up nearly 19% year-to-date, investors are wondering if the rally can be sustained. On the surface, it appears that market sentiment is bullish, bolstered by the Fed’s actions and a series of robust earnings reports. Yet, looming risks, such as global economic slowdown in the Eurozone and China, may challenge this optimism. Moreover, seasonal trends indicate that September is typically a tough month for equities, adding a potential headwind to the current rally – although so far this hasn’t held investors back. With the US presidential election approaching, market volatility could spike, leaving investors hesitant to dive into new rallies without a clear trend. S&P 500 forecast: Technical Analysis and Key Levels to Watch Despite some volatility after the Fed’s rate cut, the S&P 500’s bullish trend remains intact. Traders should keep an eye on the support range between 5613 and 5670, with the upper end of this range marking the high from July. As long as the index holds above this support area, the short-term path of least resistance will remain upwards, potentially keeping the market on course to head towards 5800 or even the 127.2% Fibonacci extension level of 5827, derived from the drop in July. However, a dip below 5613 would signal a shift towards bearish sentiment, potentially pushing the index down to its next support and short-term trendline around the 5480-5500 area. Bearish Risks and Market Sentiment While the bulls are currently in control, bearish traders are watching for signs of a reversal. A drop below recent lows, as suggested above, could signal the end of the short-term bullish bias, reminiscent of the July sell-off when overbought conditions led to a sharp decline. Then, the signal came in the form of a bearish engulfing candle on 17 July. Bearish traders need to wait for a similar confirmation before making any significant moves, given the overall bullish structure of this market. Risk Management in a Volatile Market Regardless of whether you're bullish or bearish, managing risk is critical in today's market. With heightened uncertainty surrounding the economy and upcoming elections, volatility is expected to remain high. Traders should stay nimble and be prepared for sudden shifts in the market’s direction. In conclusion, while the S&P 500 forecast remains cautiously optimistic, several factors could derail the current rally. Staying informed and agile will be essential for navigating the coming weeks. We will, of course, highlight any major shifts in the trends, if observed. Stay tuned. -- Written by Fawad Razaqzada, Market Analyst
WHSELFINVEST:USSP500CFDLong
by WHSelfInvest
Fed Kicks Off Rate-Cutting Cycle. Why the Muted Market Reaction?Central bank bros met traders’ loftiest expectations with a half-point cut to interest rates on Wednesday. But is that too good to be true and maybe even a signal of some problems with the US economy and looming fears over at the Fed? Trading today isn’t the same as trading yesterday. Even though prices don’t really confirm it — there wasn’t a super-duper rally in stocks. Maybe gold XAU/USD flickered a bit, but it was mostly froth . And here we are — the first day of trading in an environment with lower interest rates. Jay Powell, head of the Federal Reserve, announced on Wednesday the first trim to borrowing costs in four years. The move ushers in a new normal where US interest rates USINTR are projected to continue moving lower from their 23-year high of 5.5%. The easing cycle kicked off with a jumbo-sized 50 bps (basis points) slash. Surprisingly, the Fed went for the juicier, bolder and more aggressive option, leapfrogging the less interesting and exciting cut of 25 bps. First reactions across the board showed investors were hyped to get what they wanted — the broad-based S&P 500 hit an intraday record . Shortly after, however, stocks across the board pulled back and markets became anxious over the outlook as the realization kicked in. If the economy is doing fine, why go big on cuts from the get-go? What’s more, central bankers are keen to ax interest rates by another half point in 2024, ultimately wrapping up the year with the benchmark rate sitting at 4.25% to 4.5%. Christmas may come early — the Fed meets twice more this year, on November 7 and December 18. Better Safe Than Sorry? A super-sized half-point cut could actually be a pre-emptive measure to alleviate a strained economy. But if inflation is now largely in the rearview mirror , what could the problem be? The other mandate. The Fed has a dual mandate of keeping prices in check (inflation) and upholding a stable labor market (jobs). “We will do everything we can to support a strong labor market as we make further progress towards price stability,” Jay Powell said at the annual Jackson Hole gathering last month. And indeed, America’s jobs have seen a pronounced slowdown over the past few months. In July, markets added just 89,000 jobs (revised from an initial estimation of 114,000 ). In August, hiring had picked up modestly to 142,000 , but below expectations for 164,000. Pros and Cons of Bumper Cut Essentially, this big-boy cut of 50 bps is a double-edged sword. It cuts into borrowing costs, making money more affordable, potentially stimulating businesses to add more jobs and grow their gig. And it also prompts consumers to take on debt and get that house. But on the flip side, a cut of that magnitude risks stirring up price pressures again. To get to full employment, the Fed faces the challenge of knocked inflation waking up from its slumber. The size of the cut at this particular time doesn’t mean anything without the markets’ reaction to it. Apparently, investors were unimpressed and shrugged it off as no big deal. Looking ahead, however, the stakes are high because stocks are at all-time highs. The S&P 500 touched a record, Big Tech is leading the charge into artificial intelligence and investors can’t own enough of the highflyers Nvidia NVDA , Meta META , Apple AAPL , etc. The actual picture will become clear once markets figure out what the Fed’s rate-cutting cycle means and what to do about it.
SP:SPX
by TradingView
25
THE KOG REPORT - FOMCTHE KOG REPORT – FOMC This is our view for FOMC, please do your own research and analysis to make an informed decision on the markets. It is not recommended you try to trade the event if you have less than 6 months trading experience and have a trusted risk strategy in place. The markets are extremely volatile, and these events can cause aggressive swings in price. We’re expecting some volatility this Session with the pending FOMC statement so for this report we’ll again look at the extreme levels. We’ve done well already this week, no need to risk anything trying to capture tops and bottoms, so keep an eye on the levels but remember, the trade comes after the event. The move started early in the week with the price hitting our resistance level and then making the move we wanted completing our first target. This has however left the completion of the move on the table, so we’ll stick with Sundays KOG Report idea for now, but expect a move to the upside potentially into that 2602-5 region and above that 2610! It’s 2610 as the extension that needs to reject the price in order for it make that move downside, as breaking above that will take us further into the 2625-30 region before any breather. So, as the chart shows, if we get 2602-5 and reject, we could see price move downside to clear the liquidity sitting first at 2550-55 and below that 2525-30. 2525-35 if visited, we feel would represent an opportunity to capture the swing low and then attempt to target that 2550-55 region as the first target. We’re going to play it safe this time and say if it works it works, if it doesn’t, it doesn’t. If you followed us this week, again we’ve done what we needed to for the week, everything else here is a bonus and should be treated with minimal risk on the markets, until they have settled. Please do support us by hitting the like button, leaving a comment, and giving us a follow. We’ve been doing this for a long time now providing traders with in-depth free analysis on Gold, so your likes and comments are very much appreciated. As always, trade safe. KOG
FX:XAUUSD
by KnightsofGold
3
$BTC Massive Move In Anticipation of 50 Bps Rate Cut!Massive 6% move up today for Bitcoin in anticipation for a 50 bps rate cut tomorrow. CRYPTOCAP:BTC smashed through the 50D MA and back into the BMSB. However don’t be fooled; we are still very much in a downtrend as you see the 50MA is well below the 200MA. We could see price break through the BMSB and reject from the 200MA in the next 48 hours. There’s still a lot of liquidity <$50k that needs to be claimed for the next leg up. Either way, I would not be trading leverage here. Expect massive volatility.
by jonnieking
20
50-50 Odds for Big Rate Cut this Wednesday The Federal Reserve’s upcoming rate decision is teetering on a knife’s edge, with the odds of a significant cut climbing. According to the CME’s FedWatch tool, the chances of a 25 or 50-basis-point reduction are now evenly split at 50-50. The decision from the cental bank comes in on Wednesday. Former New York Fed President Bill Dudley, speaking last week, bolstered the case for a more aggressive move, stating the federal funds rate could be up to 200 basis points above neutral. Dudley argued there’s a “strong case” for the Fed to start big. However, major banks are possibly leaning toward the Fed starting small. In a note, Bank of America’s analysts suggested “a small chance” of a 50bps cut, while UBS’s Brian Rose also acknowledged the possibility, though was not factoring it into his baseline.
TVC:DXY
by BlackBull_Markets
09/09/24 Weekly outlookLast weeks high: $59,829.20 Last weeks low: $52,551.34 Midpoint: $56,190.27 More sell-off last week in the crypto markets, very tough market conditions continue, hitting the $52,000 bullish OB+ again, the first time being exactly one month before. This area had held as support previously but it needs to hold this time around too, failing that $50,000 is the bottom of the daily downtrend channel. US CPI (Wednesday) & PPI (Thursday) this week, as with big news events we can potentially see volatility, this will be the last US CPI before rate cuts begin in the US, in Europe rate cuts are forecast to begin on Thursday, predicted to drop from 4.25% to 3.65% according to invesing.com, a 60bps cut. Another major news event this week is the Trump v Harris Presidential debate. I'm not expecting a whole lot of crypto talk in this debate, if I'm being completely honest I can't see it being an adult debate about political policy at all. However, I do think it will have an effect on the markets one way or another, obviously Trump is the better outcome for crypto if he stays true to his plans set out during the Bitcoin conference compared to the plans for the Harris administration to tax un-realized gains which is not very pro-investment. Again, I'm not holding my breath for any information on crypto but it is a major news event all the same. So in conclusion this week is full of news events that could create volatility, with BTC at its current level nearer the bottom of the daily trend. It does feel like we're maybe coming to an end of the chop with monetary policy pivot taking place soon.
by ProR35
TBT is a buy rate cuts likely are stalled LONGTBT is an inverse 20 year Treasury Bill ETF. At present, the Iran Israeli conflict threatens a regional conflict to include the Red Sea and the Easter Mediterranean where oil tankers must navigate to move oil from producer to consumer. Oil price escalation could go hand and hand with geopolitical escalations. Oil and its derivatives are a primary driver of inflation in the US. Inflation has been sticky and forcing the fed's ambitions to cut rate to be paused. The Middle East escalation may make matters worse overall. Federal spending ( aid to Israel for instance) is also a driver of inflation. The budget fight in DC is front and center. I see this as good cause, to continue to take adds to my TBT position whenever I can find a dip worth the discount as a further hedge against a correction in the equities markets which could come on the horizon. Granted a dip of 2-3% from the ATHs is not much but when it hits 10% or more and the VIX/UXXY continue to rise, there will be impetus in a hurry to hedge positions or close them with more urgency. For for TBT, I believe that more is better.
AMEX:TBTLong
by AwesomeAvani
Recession After Fed Rate Cut?Are we heading toward recession? To answer this question, I'm pulling the recession prediction indicator based on GDP provided by FED (ticker:JHGDPBRINKDX) which is the purple color on the bottom chart. It shows that we are on fairly low probability of recession (around 4%) as of end of Aug 2024. The FED indicates it will cut rate on end of Sep 2024. However, if we look back of history of recession based on GDP indicated by FED data (ticker: JHDUSRGDPBR) which is the pink color. It shows that recession only happen right after FED cut rate as show by lime color (ticker:FEDFUNDS). It hard to believe that recession is caused by the FED cutting rate. Or the FED will only cut rate if we are heading toward recession? At least from the past history of rate cut we can see high chance of recession happening after the FED cut rate. And during the recession we can see that S&P500 are falling. So will there be another crash coming after Sep 2024? Please comments below.
SP:SPX
by danny_peanuts
1
Sector Rotation in Anticipation of Rate CutsMarkets have rebounded sharply after last week's fear-driven decline. Despite this, rate cuts are still anticipated in the upcoming FOMC meetings. Changes in monetary policy often benefit some sectors over others, providing investors a chance to adjust their portfolio allocations accordingly. This paper delves into a comparative analysis of sectors around monetary policy pivots to highlight how a spread between S&P Financials Select Sector and S&P Utilities Select Sector stands to benefit in the coming months. It also describes a hypothetical trade setup using CME E-Mini S&P Select Sector futures which can be used to express the view in a margin-efficient manner. RATE CUTS WILL HURT FINANCIAL FIRMS Financial firms benefit significantly from higher rates, as these drive net interest margin (NIM) expansion, boosting their bottom line. However, when rates start to decrease, this positive impact reverses. The Financials Select Sector ETF (XLF) is comprised of 25% banks, 31% financial services firms, and 16.6% insurance firms. All these firms have benefited from higher rates, albeit the strongest impact may be limited to banks and insurance firms whose overall bottom line is significantly impacted by expanding NIM. In the last three monetary policy pivots, XLF has declined by an average of 5.6% over the following six months. Conversely, at the start of rate hikes, the ETF has typically risen by an average of 3.7% in the subsequent six months. While the most recent pivot in 2019 saw an increase in XLF, the overall average trend suggests a decline. The trend is visible even when examining the relative performance of XLF and SPX. Following rate cuts, the spread declined by an average of 2.8% while during rate increases, it declined by just 1.1%. There is another headwind facing the XLF ETF, particularly banks – rising credit delinquencies. Credit card delinquencies are especially concerning as they stood at the highest level in 13 years as of Q1 2024. Overall delinquencies are also rising and near the highest level since 2021. Updated data from the New York Fed has shown that conditions remained stressed in Q2 with total delinquencies at 3.2%. Particularly concerning were severe (>90 days delinquent) credit card delinquencies at a staggering 10.93%. Consumers are increasingly relying on unsustainable credit card debt to cover expenses. As delinquencies remain elevated, issuing banks must increase loan loss provisions which impacts earnings directly. Source: New York Fed As credit card usage becomes unsustainable, another class of companies in XLF – payment processors - will also be hurt. The largest payment processors (Visa, Mastercard, and Amex) represent nearly 15% of the XLF index. RATE CUTS WILL BENEFIT UTILITY FIRMS Unlike financial firms, utility companies have struggled in a high-rate environment. As their huge capital expenditure is often fueled by debt, higher rates result in narrower profits. As rates decline, debt payments decrease, leading to expanded profit margins for utility firms. Historically, the ETF has shown a significant average increase after rate hikes and a smaller increase after rate cuts. This behavior might be due to investors anticipating a weakening economy following rate cuts, which would favor utility firms. However, the index tends to correct later once rates remain elevated for some time. The impact is close to even when comparing the relative performance against the broader S&P 500 with both periods resulting in a ~6% increase in the spread. Utility firms are also likely to outperform in case of a US recession. Although some of the concerning economic data has normalized over the past week, the risk of a recession in the US persists. As utility firms provide essential services, their cash flows are relatively stable even during recessions. While consumers may cut down on discretionary spending, spending on essential services remains unaffected. Mint Finance previously covered these factors in a separate paper. HYPOTHETICAL TRADE SETUP A pivot in Fed Policy is expected in the upcoming FOMC meetings with the CME FedWatch tool signaling 100 basis points of rate cuts in 2024 itself. Rate cuts will impact different sectors differently. While utility firms stand to benefit from lower rates, financial firms may see lower profits. Source: CME FedWatch The spread between CME E-Mini Utilities Select Sector Futures (XAU) and CME E-Mini Financial Select Sector Futures (XAF) has been rising since March as it has favored XAU. The spread responded strongly to a shift in rate cut sentiment as well as the recession signal at the start of the month. The recent correction over the past week offers an improved entry point into the spread. A hypothetical trade setup using XAU futures expiring in September (XAUU2024) and XAF futures expiring in September (XAFU2024) is described below. CME offers margin offset totaling 60% for this spread reducing the capital requirement to USD 3,740. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme. DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CME_MINI:XAU1!Long
by mintdotfinance
Why an emergency rate cut is badThe market has been desperately waiting for a FED rate cut for nearly a year now. We have not received one yet even with the recent flash crash in the market. Despite calls for an emergency rate cut after the crash we didn't get one. Why not? Why is that a good thing? The Fed does not cut rates out of the kindness of their hearts They cut rates only they broke something and they are trying to fix it The lack of emergency rate cut means the recent flash crash was more irrational panic, less based on actual facts The economic data while concerning in areas still is nothing alarming to the point for the Fed to "break glass in case of emergency" rate cut button over When the rate cut does come which is expected still in September, we should hope for 25bps rate cut, nothing more. Small rate cuts a bullish sign that we are still doing ok. Large rate cuts is the equivalent to oxygen masks falling from ceiling, brace for rough landing.
AMEX:SPYLong
by ratchet-mint
3
Differentiate between rate cut and low interest rateNo important economic data from US this week, only trade balance and initial claims to observe on Tue and Thu respectively. US stock market continued decline on Fri, following weakening labor market conditions and earnings from big tech companies last week. In expectations of rate cut, big shots are reducing portfolios. The situation may last until we actually see the first rate cut in the cycle and longer. The rise in stocks is usually associated with low interest rate, I would expect the adjustment in S&P to continue along the path of rate cut. So investors should differentiate between rate cut action and low interest rate, which are presented as two distinguished market conditions.
SP:SPXShort
by moncap2023
SOLANA 1D RANGE There is no denying the last few months in crypto have been frustrating to say the least. With a brutal seemingly endless chop despite some very bullish events such as the halving, BTC & ETH ETFs, institutional interest and buying, presidential candidates in support of the industry etc. Bitcoin still struggles to break and stay above its '21 ATH @ $69,000. For altcoins, and in particular SOL, this means they bleed as well and more often than not, they bleed more than BTC. Since range highs we've seen multiple retests of the lows and no retests of the highs, currently price has lost the range midpoint after hitting diagonal resistance and could potentially be targeting range low once again. The difference this time is the 1D 200EMA which usually serves as a Bullrun launching pad will be above that range low, any acceptance below this moving average is catastrophic for SOL. SOL has recently overtaken ETH in daily DEX volume more than once in the recent past, which has signalled a shift in on-chain preferences for traders of lower-cap coins. This could help to keep SOL afloat compared to other L1'S and alts in general however if the environment truly is risk-off then it may not be enough. From a bulls standpoint you'd like to see SOL hold price in this bullish Orderblock and at the worst $138 which is where daily support & 1D 200EMA is situated. With rate cuts predicted to be coming in September, it feels like a survive the next 6 weeks and thrive in Q4. Until then it's capital preservation market conditions.
by ProR35
IWM/SPX spread - Long smallcapsBeen watching for a reversal of the trend between the 2 indexes and a breakout of this bullish falling wedge for a while. Fundamentally it made sense to look for this breakout result because of the looming interest rate cuts and frothy bond yields since the start of the year. Small caps are highly sensitive to such things. Long IWM or TNA is the play on this breakout. But the best value will be found in heavily beaten down individual small caps. If you want to hedge against a market correction long small caps short large would be the other play.
AMEX:IWMLong
by cc1
1
Front-Running Yield Curve Normalisation on Rate Cut AnticipationThe (in)famous Yield Curve remains inverted. In recent past, spreads normalized only to revert to inversion as rate cut expectations got pushed out. This time though, is different. Recent CPI print has significantly altered market sentiment. The likelihood of an initial rate cut at the September FOMC meeting now exceeds 90%. Consequently, the yield curve is normalizing once more. Current market signals indicate that this normalization could be enduring. WHY IS THE YIELD CURVE INVERTED? The present yield curve inversion indicates that investors do not expect that rates will remain this elevated for long. While 2Y treasuries continue to be re-issued at higher rates, expectations for longer terms such as 10Y and 30Y are lower as they factor in that rates will normalize from their present levels. YIELD CURVE WILL NORMALIZE SOON, WHAT WILL DRIVE IT? While this is the longest period of yield curve inversion in history, the curve has started to normalize. The factors driving normalization in the yield curve were previously discussed. Ordinarily investors demand higher rates for longer-duration treasuries to account for the higher inflation expectations and greater risk. Either inflation must fall, or inflation adjusted treasury yields for longer maturities must rise. Rate cuts will also drive the normalization in the yield curve. The yield spread between 2Y & 10Y treasuries tends to rise in the two months preceding the first rate cut in a cutting cycle as observed in the past. The impact of rate cuts on the 2Y-10Y spread is even more pronounced in the two months following the first-rate cuts. UNCERTAINTY IN MACRO ECONOMIC DATA IS DISSIPATING Make no mistake, the broader picture remains uncertain. However, recent data points to recovery. Chicago PMI showed a sharp recovery in July. But the job market signals uncertainty. Continuing jobless claims remain elevated. Job openings have fallen. But job creation in the last two non-farm payroll prints were above expectations. US Retail sales and industrial production have improved. The impact can be observed through the consistent increase in the GDPNow forecast for Q2 GDP since 12/July. Source: GDPNow The June CPI release showed uncertainty easing. Headline CPI cooled sharply as it fell on a MoM basis. Notably, the stickier core CPI also continued to cool as it fell to 3.3%. However, inflation remaining sticky at the 3% level remains a grave concern. Even if a recession does arrive in the coming months, the 10Y-2Y yield spread is likely to have normalized by then. Yield curve inversion is observed only before recessions not during. RAPID RATE CUTS EXPECTED IN THE COMING YEAR Source: CME FedWatch The rate cuts outlook has improved substantially. FedWatch signals that rates will fall by 100 basis points by March 2025 (as of 19/July) suggesting successive cuts. Other analysts are even more optimistic. Analysts at Citi bank hold the view that rates will be slashed by 200 bps (2% in total), starting in September across eight successive FOMC meetings (25 bps at each) by the summer of 2025. CERTAINTY IN RATE OUTLOOK SUGGESTS YIELD CURVE NORMALIZATION Major moves in the yield curve have only come through after commencement of rate cuts in the past. This time, markets may front-run these expectations. The attempts to front-run rate cuts were already observed in December when the yield spread recovered sharply after the Fed signaled six potential rate cuts in 2024. Presently, the 10Y-2Y yield spread is trading below those levels and has the potential to break out as we approach September rate cuts. The risk of a reversal remains but it is lower. Higher rates pose a systemic risk for the US given its profligate borrowing. Higher rates on treasuries are untenable for much longer. Cost of servicing public debt in June hit USD 140 billion and totaled USD 868 billion in the first nine months of the current fiscal year (33% higher YoY). For reference, the total budget deficit for this period was $1.27 trillion. The interest burden is weighing heavily on the overall budget deficit. HYPOTHETICAL TRADE SETUP Treasury auctions are a sound guide to maturities selection when positioning for yield curve normalization. The recent demand for treasuries at the latest auctions has been low. Bid-to-cover ratio for all (2Y, 5Y, 10Y, and 30Y) was lower than the average bid-to-cover over the prior ten auctions. Demand was weak for the 10Y treasuries. Demand for 30Y treasuries has also been lower than previous auctions but has remained more consistent than 10Y. The yield spread between 30Y-2Y treasuries has outperformed the 10Y-2Y spread over the past 2 months. Investors can seize opportunities from normalization in the 30Y-2Y spread using CME Yield futures. The CME Yield futures are quoted directly in yield with a one basis point change in the yield representing a P&L of USD 10. As yield futures across various maturities represent the same notional, to calculate the spread P&L is equally intuitive with a one basis point change in the spread between two different maturities also equal to USD 10. The hypothetical trade setup consisting of long 30Y and short 2Y is described below. • Entry: -2.6 basis points (bps) • Target: +25 bps • Stop Loss: -25 bps • Profit at Target: USD 276 (27.6 bps x USD 10) • Loss at Stop: USD 224 (22.4 bps x USD 10) • Reward to Risk: 1.24x MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CBOT_MINI:30Y1!Long
by mintdotfinance
EUR/USD forecast: Currency Pair of the WeekThe EUR/USD poked its head above the June high of 1.0916 to reach its best level since March, after the US Empire State Manufacturing Index came out weaker than expected earlier. The US dollar has remained under pressure against most major currencies, albeit not so much against the likes of the New Zealand dollar following last week’s dovish RBNZ meeting. Still, against the likes of the euro and pound, as well as gold, the greenback has fallen further after last week’s weaker-than-expected US CPI data boosted expectations that the Federal Reserve will loosen its monetary policy at its September meeting. Already cutting rates in June, the European Central Bank will be in focus again this week. This time, no rate cuts are expected from the ECB, which, together with reduced political uncertainty in Europe and weakness in US data, should all help to keep the euro supported against the US dollar, maintaining the short-term EUR/USD forecast in bulls’ favour. EUR/USD forecast: Key macro highlights this week Apart from retail sales and a handful of other macro pointers, the US economic calendar is quite quiet this week. The same could be said about Europe’s data calendar had it not been for the ECB policy decision on Thursday. Here are this week’s key macro highlights, relevant to the EUR/USD pair: - Tuesday - US Retail Sales & Core Retail Sales m/m - Wednesday - US Building Permits US Industrial production m/m - Thursday - Eurozone Main refinancing rate & monetary policy statement US unemployment claims ECB Speech EUR/USD forecast Already, we have seen the Empire State Manufacturing Index print a below-expected -6.6 reading this week, which helped to keep the pressure on the US dollar. But it is all about retail sales on Tuesday, when building permits and industrial production data will be published too. US retail sales expected to fall The health of the US consumer is deteriorating, as was reflected by last month’s release of the May retail sales estimate, which came in at just +0.1% month-over-month. That followed a downwardly revised 0.2% fall in April. Sales at gasoline stations were particularly weak last time, falling 2.2%, while those at furniture stores, an indication of demand for long-lasting goods, slipped 1.1%. Meanwhile, recent data releases have mostly surprised to the downside and inflation has cooled more than expected. If retail sales again disappoint, then the odds of a September rate cut could surge, especially in light of last week’s weaker consumer inflation data (and UoM’s Inflation Expectations survey). ECB rate decision The European Central Bank’s next rate decision is on Thursday, July 18 at 13:15 BST. Don’t expect any fireworks this time, after it delivered its first rate cut in June. That decision was built up so much by the ECB that they simply had to cut even if policymakers were unsure about the path of inflation. Indeed, the minutes of that meeting have since revealed greater uncertainty in ECB staffs’ outlook for inflation, while private consumption showed no convincing evidence of picking up either. The ECB will remain data-dependent, something which Christine Lagarde highlighted at the last press conference in June and said there will be no pre-commitment to a particular rate path. So, don’t expect another rate cut at this meeting, but watch out for clues about the next move. EUR/USD forecast: Technical analysis The EUR/USD has broken above a couple of bearish trend lines that were there from July and December of last year. Rates have also moved and stayed above their 21-day exponential and 200-day simple moving averages. The technical EUR/USD forecast is therefore bullish as things stand. But given that it had struggled around the current levels between 1.0900 to 1.1000 area earlier this year, I wouldn’t be surprised if it hangs around for a few days here, potentially until the ECB rate decision is out of the way. Still, the short-term path of least resistance is clearly to the upside, so I wouldn’t necessarily look for bearish trades here unless the charts tell me otherwise. Key short-term support is now seen between 1.0840-1.0865 area, followed by 1.0800, where the 200-day average now resides.
by WHSelfInvest
XAU/USD : Gold Faces Crucial Support Ahead of Powell's SpeechBy analyzing the gold chart on the 4-hour timeframe, we see that the price is still grappling with the support zone between $2320 and $2323. Today, we are expecting a speech from Mr. Powell in a few hours, which could lead to significant market fluctuations. Markets are looking for signs of whether the Federal Reserve will continue to raise interest rates. Any indication of a rate hike could strengthen the dollar and cause gold and stock prices to drop. Conversely, if Powell indicates that rate hikes will stop, the dollar might weaken. Markets will closely listen to Powell's speech for any hints of changes in monetary policies or economic outlook. His speech could have significant impacts on the markets. We must pay close attention to the key points of his remarks and, considering current market expectations, be prepared for potential volatility. Please support me with your likes and comments to motivate me to share more analysis with you and share your opinion about the possible trend of this chart with me ! Best Regards , Arman Shaban
OANDA:XAUUSD
by ArmanShabanTrading
6