Get started

Rates

USD/CAD remains under pressure with a new target at 1.3220The USD/CAD exchange rate is under selling pressure in the early Asian trading hours on Tuesday. Canada's Gross Domestic Product (GDP) for November, expected to expand by 0.1% compared to the previous month, will be released on Wednesday. The pair remains under pressure as the Federal Open Market Committee (FOMC) meeting on Wednesday approaches, with no expectations of changes in interest rates. Currently, USD/CAD is traded at 1.3510, down 0.01% for the day. The US Core Personal Consumption Expenditures Price Index (PCE) for December increased by 0.2% from the previous month, with an annual increase of 2.9%. On Monday, the Federal Reserve Bank of Dallas Manufacturing Business Index for January was -27.4. The Fed will announce its interest rate decision on Wednesday, with the possibility of a future rate cut. Geopolitical tensions in the Middle East, fueled by potential US military actions, may support the dollar as a safe-haven currency. On the Canadian front, a slight growth of 0.1% in November's GDP is expected. An increase in oil prices may support the commodity-linked Canadian dollar and act as a headwind for USD/CAD. Investors will closely watch the Fed's rate decision and seek trading opportunities around the USD/CAD pair. USD/CAD, having retraced to the 0.5% Fibonacci level on the total extension and the 0.79 level on the partial extension, has rotated well below the reversal zone, and now I expect a descent towards 1.3220.
Short
by Forex48_TradingAcademy
1
XAUUSD | Fundamental & Technical AnalysisGold continues to fluctuate around $2,020 in the latter half of Friday, holding its position despite a 4.1% retreat in the benchmark 10-year US Treasury bond yield, driven by December PCE inflation data. The gold price remains within a limited range, with the Fed closely monitoring inflation trends, and the PCE outcome will impact its restrictive stance on interest rates. Despite the economic resilience of the United States, gold prices could benefit from a slowdown in inflationary pressures. The probability of a rate cut in March has risen to 50%, but challenges persist for the Fed as the US economy remains robust, with a 3.3% GDP growth in Q4 2023. The Fed is expected to maintain unchanged interest rates, but investors will be attentive to signals regarding potential future cuts. The gold price exhibits an interesting pattern, with a primary bearish channel and a newly formed bullish one. The outlook suggests a potential initial movement following the bearish trend towards the $2000 zone, followed by sustained upward momentum in the new bullish trend. However, it is crucial to consider the option of a short scenario near $2000 and monitor developments following the Fed's announcements. Regards from Nicola, and have a great day, everyone.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
1
EURUSD | Long Trade on Daily and M15 ChartsThe future of the EUR/USD is uncertain, with the possibility of further declines if the support level of 1.0821 is breached. In case of a descent, it could test the 100-day moving average at 1.0774 and then touch the December 2023 low of 1.0723. The negative outlook would intensify if it surpasses the key 200-day moving average at 1.0843. On the positive side, the pair needs to surpass the weekly high of 1.0998 to open the door for a possible visit to the December peak of 1.1139. In the short term, the pair seems to be consolidating near 1.0820. Technical indicators such as the MACD and RSI suggest downward pressure, with the RSI falling below the 40 level. Events such as the ECB press conference and German economic data influence the sentiment of the EUR/USD, with the lack of surprises leading to a decline on Thursday. Contrasting economic prospects between Europe and the United States, along with positive signals from the U.S. GDP, have contributed to supporting the dollar. The Federal Reserve appears inclined to delay an interest rate cut until at least May, according to market probabilities. The release of PCE-measured inflation on Friday could further influence interest rate expectations. In summary, the current context suggests uncertainty in the future movements of the EUR/USD, with economic factors and decisions from the ECB and the Federal Reserve having a significant impact on the currency pair's outlook. Therefore, I consider it safer to evaluate a trade on the daily chart, where I observe a neater chart setup. I have identified a demand zone where the price could retrace to rotate and provide a long entry confirmation at the 15-minute chart, with a target set at the level of 1.1142, where we have a significant liquidity zone yet to be filled. Greetings and happy trading to all.
Short
by Forex48_TradingAcademy
1
ECB maintains interest rate at 4.50% but for how long? History of prior EU Rate pauses: 4 months | Oct 00 - Apr 01 12 months | Jun 07 - Jun 08 3 months | Jul - Oct 2011 4 months | Sept 2023 - Present ⏳SO FAR⏳ At least they could say that this is not the shortest one ever now that we are into month 4. Historical Average: 6 months (March 2024) Interestingly this is when the Bank Term Funding Program in the US is ending which was providing liquidity to the banks. It might be a case of one foset gets turned off and another gets turned on. PUKA
ECONOMICS:EUINTR
by PukaCharts
Gold is ready for a new rally towards $2055The price of gold struggles to capitalize on the recovery trend in place for over two days, after hitting a low of over a month, and faces renewed selling pressure at the beginning of Monday. Declining US bond yields, a weaker dollar, and geopolitical risks could limit further losses. Additional gains could occur if gold manages to stabilize above the $2,030 resistance, while a downward movement could gain momentum with a break below the psychological support of $2,000. In addition to the conflict in Gaza, tensions between Houthi rebels and the US military are rising in the key commercial shipping route of the Red Sea. Furthermore, Pakistan carried out military attacks in Iran on Thursday, following a similar attack by Iran in its territory. In this context, the precious metal has recovered significantly, but short-term prospects have not yet turned bullish as further upside seems limited by diminishing bets favoring an interest rate cut by the Federal Reserve (Fed). Price growth is gradually declining, but recent data suggests that the economy is robust, particularly due to strong household spending. This adds pressure to inflation and makes it more likely that the Fed will maintain a restrictive monetary policy stance for a longer period. The Fed is expected to keep interest rates unchanged in the range of 5.25%-5.50% for the fourth consecutive time at the monetary policy meeting on January 31. On a daily chart, we can observe that the price is in a possible reversal zone and could gather liquidity in the highlighted box at the 2020 level. From there, a bullish impulse could start, reaching the 2055 level, another area that holds significant buyside liquidity. Greetings and happy trading to everyone.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
1
SP500 is directed to $4200 after the last high!January 19th Closing: The U.S. basket index concluded the day with a significant increase, recording a gain of 1.23% compared to previous values. The initial movements were lively, with the index opening at 4,796.3 points, surpassing the previous day's high. Throughout the day, it continued the positive trend, closing at 4,839.8, approaching the highest level reached during the entire session. Status and Trend Analysis: Currently, the short-term outlook for the Standard & Poor's 500 index highlights a clear growth, with a target set at 4,873.3, but I don't believe it. In case of a temporary correction, the immediate target is set at 4,772.7. However, the prospects indicate a further downturn of the curve, reaching the peak of 4200. The situation reflects an uncertain phase and the potential for further negative market developments.
CBOE:SPXShort
by Forex48_TradingAcademy
1
XAUUSD is directed towards 2060 while the Recession is coming!The price of gold has reached almost $2,030, benefiting from the stabilization of the US dollar. However, a downward correction is not entirely convincing as traders reduce bets on a Fed rate cut in March. The precious metal has experienced a strong recovery after finding support near $2,000, backed by the 50-day Exponential Moving Average (EMA). Nevertheless, the resistance of the 20-day EMA at $2,035 hinders the gold bulls. The 14-period Relative Strength Index (RSI) has bounced back, but the future remains uncertain. Geopolitical tensions in the Middle East, including conflicts in Gaza and tensions between Houthi rebels and the United States, have driven gold higher. However, short-term prospects are not entirely bullish as bets for a Fed rate cut decline. Uncertainty about inflation in the United States persists, with conflicting data on price growth and a strong economy due to household spending. The Fed is expected to keep rates between 5.25% and 5.50% at the January 31 meeting, but traders will be attentive to any comments on managing expected rate cuts in 2024. Let's prepare for future gold rallies in anticipation of the turbulent storm that awaits the markets in the next 6 months. The market may not believe it yet, but the words of central bank speakers have been clear: no rate cut in the first quarter. Greetings and have a great weekend to everyone from Nicola.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
1
EUR/USD | No interest rate cut and towards 1.11The exchange rate between the Euro and the US Dollar remains consistently below 1.0900 on this Friday. A slight increase in the value of the US Dollar and yields on US Treasury bonds, in a context of general caution, is influencing the currency pair. Daily indicators are just beginning to highlight a negative direction, suggesting that the most likely path for the EUR/USD pair is downward, indicating that it's time to consider long positions. During the first European session on Friday, the EUR/USD exchange rate shows a subdued movement, remaining near the Wednesday low and extending for over a month, a region sensitive to the 0.62 Fib. The European Central Bank (ECB) is struggling to convey a clear message regarding the possibility of raising or lowering interest rates, which is preventing traders from taking directional positions on the common currency. Christine Lagarde, President of the ECB, has avoided countering bets for rate cuts exceeding 150 basis points this year but has emphasized the need for caution in the face of rising inflation in the Eurozone, reaching 2.9% YoY in December. Recent more cautious statements from various Federal Reserve officials have tempered expectations of an imminent interest rate cut. Meanwhile, the reduced likelihood of a more aggressive easing by the Federal Reserve has pushed yields on US 10-year Treasury bonds to their highest in over five weeks, providing some support to the US Dollar. In this context, markets are still considering a 50% chance of a Fed rate cut in March. This, along with stable performance in stock markets, limits the rise of the safe-haven US Dollar and provides some support to the EUR/USD pair. In the daily chart, it is evident that the price has reached the 62% Fibonacci zone and is now in a phase of a modest rebound, with expectations of an upward movement towards 1.11. It will be interesting to observe the Monday morning session in London to evaluate any bullish impulses and identify entry opportunities in what could be the most significant rally of the year. I wish everyone greetings and a pleasant weekend, from Nicola.
Long
by Forex48_TradingAcademy
2
30-Year US Gov't Bond Yields since 1977Here is a long term view of long term US Gov't interest rates. Long term is defined as 30 years and is a common bond owned by pension funds and insurance companies and other long term investors with long term obligations. I highlight the various ranges of interest rates as shown in these 4 boxes and the few moves that temporarily moved interest rates outside those boxes: 1. 1987 Stock Market Crash on collapsing USDollar, hiked capital gains taxes starting in 1988, trade wars with Germany, S&L crisis brewing from 1986 real estate tax law change, and Congressional moves to eliminate interest rate deductions on takeovers. 2. Orange County Bankruptcy 3. Great Financial Crisis "GFC" - massive deleveraging of the banking industry forcing asset prices down in a collapse. 4. Covid reaction by Gov't to shut economy down and stimulate spending and handouts to keep economy afloat 5. Current over-reaction to over-stimulation during lockdowns and supply chain issues.
TVC:TYX
by timwest
8
Market Phases | Buy & Sell zone!Today, we delve into the crucial market phases, focusing on the dynamics of accumulation and distribution, along with the concepts of BOS (Breakout of Structure), Sweep, Range, and Liquidity. Understanding these phases is essential for developing an informed trading strategy and improving trading decisions. The market goes through various phases, such as accumulation and distribution, which play a key role in price formation. Accumulation represents a period when institutional traders accumulate a significant position, while distribution is associated with the sale of these positions. BOS (Breakout of Structure) is a pivotal event where the price surpasses a significant support or resistance level. Analyzing BOS can provide signals for reversal or trend continuation, indicating the end of one phase and the beginning of another. The concept of Sweep involves the rapid and aggressive buying or selling of a large quantity of assets at current market prices. This may indicate institutional interest and influence the future direction of the price. Range refers to a consolidated price interval where the market is temporarily "locked." During these phases, traders can seek breakout or breakdown signals to identify trading opportunities. Liquidity is crucial as it represents the availability of a large volume of trades at a specific price level. Understanding market phases and concepts like BOS, Sweep, Range, and Liquidity provides a solid foundation for chart analysis. Using this knowledge, informed decisions can be made to identify trading opportunities and manage risks more effectively.
Education
by Forex48_TradingAcademy
1
GBPUSD is ready for the Bullrun towards 1.281The GBP/USD is rebounding towards 1.2700, driven by surprisingly high inflation data in the UK, which diminishes expectations of aggressive interest rate cuts by the BoE. US retail sales data has bolstered the strength of the dollar, slightly exceeding expectations. The exchange rate remains above the lower limit of the ascending channel, with the Relative Strength Index (RSI) indicating a bullish bias. Resistance levels are at 1.2780, 1.2830, and 1.2860; supports are at 1.2750, 1.2710-1.2700, and 1.2670. The GBP/USD reversed its direction, closing above 1.2750 due to an improved risk sentiment. US Producer Price Index (PPI) data is awaited, following a 3.4% increase in the Consumer Price Index (CPI) in December. The initial reaction supported the USD, but the market is not convinced that the Fed will avoid rate cuts in March. The UK's Gross Domestic Product (GDP) grew by 0.3% in November, maintaining the resilience of the Pound. Meanwhile, the FTSE 100 is up by 0.8%. It is expected that US producer inflation will rise to 1.3% in December. The USD's reaction suggests that a significant increase in the PPI could influence a potential shift in monetary policy towards the end of the second quarter. Stay tuned for any updates. Regards, Nicola.
Long
by Forex48_TradingAcademy
3
XAU/USD: Critical Zone – Should You Buy or Sell?The price of gold (XAU/USD) is undergoing a significant sell-off, failing to reclaim the weekly high above $2,060. Investors are reassessing the timing at which the Federal Reserve (Fed) might reduce interest rates. After the failure to regain the weekly high of $2,062, the price of gold has dropped to around $2,030. It is expected to remain uncertain until new signals emerge regarding a potential Fed interest rate reduction. The precious metal has wiped out gains made on Monday, dipping below the 20-day Exponential Moving Average (EMA) at approximately $2,039. Further declines may occur if the gold price fails to defend the January 3 low of $2,030, exposing it to psychological support at $2,000. Investors are reacting to the persistent Consumer Price Index (CPI) report for December and hawkish comments from European Central Bank (ECB) officials. Despite expectations of a rate cut in March, Fed policymakers are in no rush to adopt an accommodative stance on interest rates, considering employment stability and the low likelihood of a recession in the United States. Going forward, data on US retail sales, industrial production, and the Fed's Beige Book will provide new insights into interest rate prospects.
OANDA:XAUUSDShort
by Forex48_TradingAcademy
1
USDCAD is ready to grab the liquidity at the level 135.30The Canadian dollar strengthened following mixed inflation data in Canada, while weakness in U.S. manufacturing data exerted negative pressure on the dollar. The bullish trend in USD/CAD persists, with resistances at 1.3420 and 1.3350 potentially impeding selling. The Canadian dollar (CAD) gained against many currencies on Tuesday but lost ground against the U.S. dollar (USD), maintaining its position as the top-performing major currency. Despite Canada's Consumer Price Index (CPI) in December mostly meeting expectations, the lack of price growth has reduced the likelihood of a rate cut by the Bank of Canada (BoC) in March. Currently, Canadian money markets see a 34% probability of a rate cut, down from 46% before the inflation release. Overall, the economic landscape is influenced by other factors, such as the annual growth of the Consumer Price Index at 3.4%, compared to the previous period's 3.1%. Annualized residential construction in Canada exceeded expectations, reaching 249.3 thousand for the year through December. Meanwhile, official statements from the Federal Reserve (Fed) continue to diminish expectations of rate cuts. Fed Governor Christopher Waller emphasizes that inflation should follow a gradual path toward 2%. Oil markets are still influenced by geopolitical factors, such as Houthi attacks on civilian cargo ships in the Red Sea.
Short
by Forex48_TradingAcademy
2
USDJPY | Short after the bullrun with target 140!The recovery of the US dollar is accelerating as market sentiment fades. The Yen is on the defensive with the hope that the BoJ will keep its extremely accommodative policy unchanged. Markets are quiet today, with US markets closed for a bank holiday. The pair has recovered most of the ground lost on Friday, reaching intraday highs near 146.00. The dollar seems to have ignored the post-PPI weakness in the United States in a calm trading session, with US markets closed for Martin Luther King's birthday. With the Bank of Japan monetary policy meeting approaching, the weak Tokyo CPI index and wage data from last week have practically ruled out any monetary policy normalization in the January meeting. The highlight in the US calendar will be the release of retail sales on Wednesday. In Japan, all eyes are on the national CPI data expected on Thursday. Confirmation on M15 is expected tomorrow during London or New York to assess a possible short with a target at 140. Greetings and happy trading to all.
Short
by Forex48_TradingAcademy
22
XAUUSD | Short opportunities and Geopolitical tensionThe price of gold gained bullish momentum, reaching a new weekly high above $2,050. Escalating geopolitical tensions and declining US Treasury bond yields, driven by soft producer inflation data from the United States, fueled the XAU/USD rally ahead of the weekend. Continued buying would negate any short-term negative outlook and set the stage for a move towards the round figure of $2,100. On the downside, the bearish trajectory could extend further towards the December low around the $1,973 area before eventually reaching the confluence area of $1,965-1,963, which includes the 100- and 200-day SMAs. Gold price (XAU/USD) extended its recovery on Friday from a one-month low around the $2,013 area, representing the 50-day Simple Moving Average (SMA). It gained positive traction for the second consecutive day on Friday, steadily rising during the early European session. The precious metal benefited from renewed safe-haven demand amid the risk of further escalation of geopolitical tensions in the Middle East. However, it remains below the $2,040-2,042 threshold, urging caution for bullish traders due to uncertainty regarding the Federal Reserve's rate cut path. Slightly higher consumer inflation figures released from the United States on Thursday, coupled with hawkish remarks from Fed officials, led investors to reduce their bets on a more aggressive policy easing. This provided tailwinds for US Treasury bond yields and the US Dollar (USD), potentially limiting gains for the non-yielding gold price. Markets are still pricing in a higher probability of a Fed rate cut in March, offering support for the non-yielding yellow metal as traders await the US Producer Price Index (PPI) and a speech from Minneapolis Fed President Neel Kashkari for short-term impetus.
OANDA:XAUUSDShort
by Forex48_TradingAcademy
8
us10y and the secondary wave of inflation.before you read any further, read my post from april: --- it has been awhile since i've given a public update on the us10y and my general theory about where i believe these rates are headed. back in april of 2023, i gave an upside target of 5.9% for the us10y. as of today, i'm raising the range for that upside target into the window between 6-9%, going into the end of 2024. i'm aware that jpow has mentioned in the last few fed meetings that he has no intention of raising the rates any further, but i'm seeing a significant development on many of the charts this week which tells me otherwise. so i'm calling him out on his bluff. --- us10y w5 algo = 6-9%
TVC:US10Y
by notoriousbids
NASDAQ How to prepare for the 2024 Sell off!As a market analyst, I have recently observed the performance of the Nasdaq, the index of U.S. technology stocks, and my observations are quite significant. In the latest session, the index displayed a rather flat behavior, closing with a modest increase of 0.15%. This slight gain follows a start that was perfectly in line with the previous day's closing values and stability that was maintained throughout the session. From the analysis of the status and trend of the Nasdaq, it's clear that the medium-term structure remains positive. This indicates that, despite daily fluctuations, the general trend of the index is upward over a longer time horizon. However, some signs of contraction are emerging in the short term. This is evident from the index's difficulty in surpassing the resistance level located at 16,660.6. Breaking through this threshold could indicate potential for further upward movement, but until then, it seems the index is in a consolidation phase. The functional support, identified at 16,116.7, remains optimal. This level has provided a solid recovery ground for the index in recent sessions, suggesting that investors are willing to buy when prices approach this point. However, the persistence of the current consolidation phase might see the index testing the lower level of 15,927.4. A move toward this level could be seen as a buying opportunity for those who believe in the long-term resilience of the technology sector, or as a caution signal for those who fear further declines. In conclusion, while the overall picture remains positive, the Nasdaq is currently in a delicate phase. Investors would do well to monitor both resistance and support levels, as well as macroeconomic and sector news, to better understand the future direction of the index. Caution and strategy will be essential in the coming days and weeks.
NASDAQ:NDXShort
by Forex48_TradingAcademy
GOLD BUY Weak Economic Data UpcomingDear Traders, Gold tends to react to weak economic data and potential shifts in interest rates for several reasons: Hedge Against Economic Uncertainty: Gold is often considered a safe-haven asset. When economic data indicates weakness, such as low GDP growth, rising unemployment, or sluggish consumer spending, it can signal economic instability. Investors turn to gold as a store of value during uncertain times, which increases demand and consequently its price. Inverse Relationship with Interest Rates: Gold doesn't yield interest or dividends like bonds or stocks. Therefore, when interest rates are high, the opportunity cost of holding gold, a non-interest-bearing asset, is greater. Conversely, when interest rates decrease or are expected to decrease, the opportunity cost of holding gold diminishes, making it relatively more attractive. Hence, the anticipation of a pivot towards lower interest rates can drive up demand for gold. Currency Depreciation Hedge: Gold is priced in US dollars globally. When interest rates are cut, the relative value of the currency can decline. Lower interest rates can lead to inflationary pressures or a weaker currency, making gold more appealing as a hedge against potential currency depreciation. Market Speculation and Sentiment: Markets often react based on expectations and speculation. If there's a strong anticipation of interest rate cuts due to weak economic data, investors might proactively position themselves in gold as a precautionary measure, anticipating its value to increase, thereby driving up demand and price. Central Bank Actions: Central banks often use interest rate adjustments to manage inflation, stimulate economic growth, or mitigate economic downturns. Gold tends to respond positively to central bank decisions that signal economic concerns or policies intended to support economic recovery, which can fuel increased demand. Therefore, in anticipation of weak economic data and an impending pivot towards lower interest rates, investors might seek refuge in gold as a hedge against economic uncertainty, potential currency devaluation, and as an alternative store of value, all of which can drive up demand and subsequently increase the price of gold. Greetings, ZTrades
OANDA:XAUUSDLong
by ZILATRADES
What’s ahead for the dollar?As the year draws to a close, it's an opportune time to evaluate the potential trajectory of the dollar going forward. From a broader perspective, we anticipate a regime shift for the dollar in 2024, potentially marking significant turning points for the major dollar pairs. Notably, since the 1990s, each instance when real rates crossed the 1% threshold, the dollar experienced an average sustained fall of approximately 18% over around 340 days. The combination of aggressive hikes and lower inflation has now pushed real rates clearly above the 1% mark, but the dollar’s reaction thus far has been rather muted when considering the past 3 reactions. This observation aligns with our cyclical analysis of the dollar. Historically, the dollar index has demonstrated a recurring cycle of approximately 3.5 years, often bottoming out at the end of most cycles. Furthermore, the dollar index has recently dipped below the crucial 103 resistance level, a significant benchmark since the 1990s. In light of a potential weaker dollar in 2024, we're exploring various strategic positions. At present, the NZDUSD pair, in particular, stands out due to its compelling technical setup and policy divergence. Currently both the AUDUSD and NZDUSD are testing their 3-year resistance levels. Given the current inflation and interest rate scenarios, we find the NZDUSD pair more appealing. New Zealand's inflation rate remains relatively high compared to the US, while their policy rates are almost identical. Moreover, the Reserve Bank of New Zealand (RBNZ) maintained its hawkish stance in the last Monetary Policy Committee meeting, whereas the Federal Reserve has begun hinting at possible rate cuts in 2024. Such divergence in policy should favor the NZDUSD pair as rate differentials shift towards the NZD. Hence, considering the weaker outlook for the Dollar in 2024, combined with the technical setup in the NZDUSD's price action and the emerging policy divergence, we lean bullish on the NZDUSD. To express this view, we can go long the CME New Zealand Dollar Futures at the current price level of 0.6247, take profit at 0.6800 and stop at 0.6050. Each 0.00005-point move is 5 USD. With that, we wrap up our last piece for 2023. We wish everyone a Merry Christmas and a Happy New Year! The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. 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: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com
CME:6N1!Long
by inspirante
LONG a Falling Interest Rate! - TLTNASDAQ:TLT is an ETF that tracks value of United States Treasury Bonds in the time range of the 20-30-year bonds. With this ETF tracking the bond value it will rise with the decrease in these bond yields as the previous bonds offering higher % rates increase in value. I am bullish on TLT for a few reasons that are summarized in the bullets below - Interest Rates are at their highest levels in around 20 years and history would show that following these peaks in the 5.5%-7% range tends to be a sharp fall of interest rates usually due to a general moderate or severe economic downturn needing economic stimulus with low rates - Along with the peak thesis, in the current economic state of America, it has been generally discussed by Fed Presidents that rate slowdown / rate hike pauses are starting. The FedWatch tool from CMEGroup shows that traders predict the highest rates will not go any higher, and actually start being cut in Early Spring 2024. Due to this data, it is definitely important to realize the risk/reward of this trade on how the downside is minimal with the current economic conditions proving interest rates will likely not move higher, and definitely not more than a last 25bps hike for this rate cycle considering no unprecedented events occur. - Another staple to this bullish thesis is against the Federal Reserve. I strongly believe the Federal Reserve bluffs intentionally during their public conferences and talks. Recalling the inflationary period following COVID, the Fed repeatedly spoke out on this inflation being transitory while CPI rocketed to record highs in decades. I believe they like to not inform the public to the 100% truth and locked room talks. The Fed has came out and said they are quite against publicizing a rate pause officially / begin cutting rates and I believe this is a bluff. As the Fed claims to wait for data, I believe that data is showing, and will continue to show stronger economic struggle from the effects on high-interest rates. As unemployment just ticked up and probably will continue, rates will start to drop fast as soon as the Fed starts. Treasury Yields would likely dump prior to all of this as the anticipation begins to flow into the markets. Lastly, I think the Fed tends to deceive the public to try and not heavily move the markets in a short time. - Overall the data should start to pour in on economic slow down as student loan repayments resume, credit delinquencies continue to rise, housing market cools, unemployment ticking up, and more can feed to a sharp drop in CPI as aggregate US demand settles. The Fed will act on this slowdown and will need to sharply cut interest rates, especially if they wait too long. - Technicals on NASDAQ:TLT also look strong with a major demand zone, a dailydouble bottom and a diagonal trendline supports the price level. TTM_Squeeze also backs up a possible end to the downside. Below 89 area could be a solid Exit area for risk-management. Any Cut in Rates, or anticipation in rate cuts can send TLT flying with bond yields tumbling. Bonus: NASDAQ:TLT also provides a safe hedge to a market collapse or recession. Because market recessions would spark a cut in rates to help fuel a recovery, while stocks may tumble, this ETF would rally on a decline of interest rates to help stimulate a falling economy. Thesis : long Commons or 2025 dated Credit Spreads
NASDAQ:TLTLong
by ZachSap
6
Post ECB AnalysisOvernight, the ECB remained cautious, stating that while the inflation path is lower than before, the ECB should not lower its guard. Keeping rates on hold at 4.50%, President Lagarde indicated that the ECB did not discuss rate cut scenarios. The EURUSD traded higher following the news, with price trading within the 1.10 resistance area. Technicals Price trades at 1.10 resistance & 61.8% fib retracement level and if price continues to trade higher, beyond this resistance, the next major resistance level is at 1.1270
Long
by JinDao_Tai
12
Post Bank of England Rate Decision AnalysisThe Bank of England (BoE) maintained a hawkish stance, keeping rates on hold at 5.25%, with votes kept at 3-0-6. With UK CPI reported at 4.6% in October 2023, the BoE views a longer-term fight to bring inflation back to its target range. The GBP gained strongly against the USD, with more upside potential as the BoE pushed back against the possibility of rate cuts. Technicals Price spiked up from 1.26 following the news, and is currently trading along the resistance area of 1.28 and 61.8% fib retracement level. Breaking the resistance level, the GBPUSD could trade up towards the next major resistance level and swing point from July 2023 at 1.3140
Long
by JinDao_Tai