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Steady AUD & Weak YEN Could Make AUDJPY HIT 89.000AUDJPY could target the next high at 89.00 as the path remains clear with least obstacles. TECHNICAL ANALYSIS On the MONTHLY TF the monthly candle closed ideally above 85.000 crucial psychological resistance, indicating that the price is ready to head higher. On the main weekly chart we can see the price failed to break the higher high at 86.00, which is very crucial as the break here would likely remove all obstacles for the price to target the next high at 89.00. Therefore to trade with high probability, the weekly candle must first close above 86.00. Once this happens, the price is highly likely to target 89.00 without much obstacles on the way up. The ascending channel kind of acts a guide for the price to climb steadily with both M & W EMA acting as strong dynamic support. FUNDAMENTAL ANALYSIS Now here is the bold statement: WEAKER YEN & STEADY AUD should make AUDJPY appreciate! Japan's economy faces a tough road ahead compared to its G-7 peers, with the lowest projected rate of growth for 2021, according to the International Monetary Fund. The supply-chain issues plaguing the global economic landscape have hit Japan especially hard. Japan's gross domestic product contracted an annualized 3.0 percent on year in the third quarter of 2021. On a seasonally adjusted quarterly basis, GDP sank 0.8 percent - again missing forecasts for a fall of 0.2 percent following the downwardly revised 0.4 percent gain in the second quarter. For the AUD its not a surprise that USD CPI reading last week caused the currency to depreciate. Last week the NAB business conditions and confidence data came in stronger than last month, as did the Westpac consumer confidence survey. The downside for the AUD came via the jobs numbers last week. The unemployment rate rose to 5.2% VS 4.8%. Employment fell by 46K VS 50K. 26th September to 9th October was the period covered for this data. Therefore this did not capture a large amount of population coming out of lockdown. Next month’s jobs data will play a major role and show us how is the economy faring. Considering all this. the AUD might appreciate especially against the weaker currencies like the YEN and we could well see AUDJPY HIT 89.00.
Long
by FX618Analysis
What's preventing AUSSIE from climbing further ?Current RISK ON mood in the markets should likely propel AUDUSD higher as the economies around the globe try to recover. As china is dependent heavily on Australia on trade matters, we have every reason to believe that the AUSSIE will likely gain ground as the recovery in the Chinese exports continue. So from technical point of view, the question that arises is: what is stopping the AUDUSD from climbing further? Just have a look at the main chart to understand the clear picture. Aussie seems to be supported by a ascending trendline and until this breaks, we are still in an uptrend. Now for this uptrend to resume we need to see clear breakout of the price outside its triangle (descending trendline) to target the next resistance at 0.77700. Lets see how this all plays out! EXTRA: have a look at the related link section. there is an active SHORT SWING EURGBP WEEKLY TRADE. The entry price is at an excellent level. enter at your own risk if you wish. the analysis is also present behind this trade THIS JUST REPRESENTS MY ANALYSIS ON THIS PAIR AND ITS NOT A TRADE SIGNAL. I HAVE MANY PAIRS THAT I MONITOR AND ALL OF MY TRADES ARE ON W, D , 4H TIMEFRAME (SWING TRADES). ITS NOT POSSIBLE TO POST ALL OF MY ANALYSIS HERE, HOWEVER I POST TRADE SIGNALS WHEN THE CRITERIA IS MET ON THE FX PAIRS I MONITOR. FOLLOW & LIKE TO RECEIVE FREE FX SWING TRADE SIGNALS CHEERS
Long
by FX618Analysis
Classical Head and Shoulders on the AUDCHF + Fundamental DriversHello traders! Heading into todays European session, risk tone is leaning risk on. Asia pacific indices are positive, measures of volatility subdued and safe havens pressured. Australian Dollar ( AUD) Fundamental bias - Neutral 1. Country's health and developments. There are 4 key drivers we are watching for Australia’s med-term outlook: The virus situation – a Q3 GDP contraction is priced in so the question now is whether restrictions can be lifted in time to see a Q4 rebound. China – the current slowdown in China is important as it’s Australia’s biggest export destination. Markets are watching to see whether the CCP and PBoC steps up with stimulus for the economy and possible support for the real estate sector. Politically, the recent defence pact between the US, UK and Australia could see retaliation from China against Australian goods. Iron Ore – as Australia’s biggest export (24%), the over 50% drop in Iron Ore from YTD highs is a negative driver for terms of trade, but the recent >70% climb in Coal prices (18% of exports) in recent weeks have offset the fall in Iron Ore. Even though China’s green initiatives weighed on Iron Ore, the current energy crunch has been a key driver of higher Coal prices. Global growth – as a favourite risk proxy, the recent fall in global case numbers and potential for a strong bounce in global activity data will be important. 2. Monetary policy outlook for the RBA At their Oct meeting the RBA kept all policy measures unchanged and confirmed market expectations that the bank will use the meeting to kick the can down the road. They reiterated prior guidance that their central scenario expects the economy to only reach appropriate conditions for higher rates by 2024. Similar comments were made about wage and price pressures, with the bank explaining that they are still subdued, and remains a key focus point for the bank. On the labour market there was positives and negatives. The negatives were a nearly 4% drop for hours worked in August (the best indicator of labour market conditions right now, according to the bank), but on the positive side they also noted that data on job vacancies have shown that companies are seeking to hire workers ahead of the expected economic reopening in October. The bank shared similar thoughts about the virus situation, stating that lockdowns are expected to see material downside to Q3 GDP but that they still expect a solid rebound as vaccination rates increase and restrictive measures are eased. Thus, incoming virus and economic data remains a key consideration for the RBA. 3. Developments surrounding the global outlook As a high-beta currency, the AUD benefited from the market's improving risk outlook coming out of the pandemic as participants moved out of safe-havens. As a pro-cyclical currency, the AUD enjoyed upside alongside other cyclical assets supported by reflation and post-recession recovery best. If expectations for the global economy remains positive the overall positive outlook for risk sentiment should be supportive for the AUD in the med-term, but recent short-term jitters are a timely reminder that risk sentiment is also a very important short-term driver. 4. CFTC Analysis atest CFTC data showed a positioning change of -3596 with a net non-commercial position of -89979. As most of the AUD’s mean reversion this past week took place from Tuesday the most of it won’t reflect in current positioning data. With net-shorts for large speculators still at historical levels and leveraged funds also increasing shorts, the odds of seeing short squeezes higher is still on the cards and risk to reward for chasing the AUD lower from here remains unattractive. Swiss Franc ( CHF) Fundamental bias - Bearish 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF with Swiss economic data or SNB policy meetings rarely being very market moving. Although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall dovish disposition and preference for being behind the ECB in terms of policy decisions. The market's overall risk tone improved considerably after the pandemic as a result of the global vaccine roll out and the unprecedented amount of monetary policy accommodation and fiscal support from governments. The Delta variant and subsequent impact on growth expectations is of course a sobering reminder that risks remain. Thus, there is still a degree of uncertainty and risks to the overall risk outlook remains which could prove supportive for the safe havens like the CHF should negative factors for the global economy develop. However, on balance the overall risk outlook is still positive in the med-term and barring any major meltdowns in risk assets the bias for the CHF remains bearish in the med-term. 2. Idiosyncratic drivers for the CHF espite the negative drivers, the CHF saw some surprisingly strength from June. This divergence from the fundamental outlook didn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests. Recent research from the team has revealed an interesting correlation between the CHF and simultaneous price action in both Gold and the USD which could explain some of the recent price action. We also need to be careful of the possibility of SNB FX intervention. Apart from that, ING investment bank has recently argued that recent CHF strength could be due to the lower inflation in Switzerland compared to the EU which meant that the real trade-weighted CHF has been trading too cheap. They also expanded that the ECB’s bond buying has meant that their balance sheet is expanding more rapidly compared to that of the SNB, which could have been reasons why the SNB did not see the need for any meaningful FX intervention lately. The bottom line is that there are often plenty of idiosyncratic drivers which might or might not impact the CHF and makes short-term price fluctuations a mixed bag for the most part. 3. CFTC Analysis Latest CFTC data showed a positioning change of -4092 with a net non-commercial position of -15679. The CHF positioning continued to unwind some of its recent surprising strength over the past few weeks. The CHF is back inside net-short territory as one would expect from a currency with an overall med-term bearish outlook. Even though we expect the currency to continue weakening in the med-term, any drastic escalation in risk off tones could continue to provide support for the safe-haven currency in the short-term and is always something to keep in mind.
Long
by Vitezabraham
$PAGS: to make you BAGS?Today we are witnessing a sharp turn around in Emerging Markets $EEM after the Jackson Hole meeting. $IWM a strong indicator of risk tolerance has seen a sharp move back up into it's middle pivot. Could the continued low rate environment and strong economy be enough to continue the rush into risk-on assets? Keep a close eye on $EWZ though (Brazil ETF in which PAGS is located) to pin point entries. On the technical side of things, keep an eye on entries in between the two trend lines in which the current candle stick is located between and stops outside of the bottom two trendlines. I'd look to scale in over the next couple of weeks and see how strong the dips in $IWM, $HYG and $EEM are to see how much continuation is possible to the upside. Good luck traders!
NYSE:PAGSLong
by Fox_Technicals
FED: Recovery Heading Towards The Right Direction (29 July 2021)The Fed’s decision. The U.S. Federal Reserve delivered no surprise during their monetary policy meeting earlier today as widely expected. The Federal Funds Rate was held unchanged at the target range of 0-0.25% while quantitative easing remains at $120 billion per month ($80 billion of Treasury securities and $40 billion of agency mortgage-backed securities). Optimistic tone on U.S. economic recovery in the rate statement. Although no actions were carried out, the Fed did expressed signs of optimism on the U.S. economic recovery in the interest rate statement. The following changes made in the statement indicate so. The sentence: “Amid this progress and strong policy support, indicators of economic activity and employment have strengthened.” has been revised to: “With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen.” The change indicates continued recovery in economic activities and employment. The sentence: “The sectors most adversely affected by the pandemic remain weak but have shown improvement.” has been revised to: “The sectors most adversely affected by the pandemic have shown improvement but have not fully recovered.” The change indicates that the sectors most adversely affected by the pandemic have improved since the previous meeting. The sentence: “Since then, the economy has made progress toward these goals, and the Committee will continue to assess progress in coming meetings.” has been added into the latest statement, indicating optimism in the economic recovery. Progress made in economic recovery but still far from full recovery. Despite the optimistic tone sent out by the Fed, the central bank’s Chairman Jerome Powell cautioned during the press conference that the economy is still a distance away from making “substantial further progress” towards the Fed’s goals of maximum employment and price stability. This does not come as a surprise since the U.S. job market is still around 6.3 million jobs away from the pre-pandemic level. Furthermore, Powell highlighted that inflation is expected to remain above the central bank’s target in the upcoming months but not sufficient to trigger a change in monetary policy. On the issue of the recent rise in COVID cases due to the Delta variant, Powell downplayed the negative impact it has on the U.S. economic recovery. He said: “With successive waves of Covid over the past year and some months now, there has tended to be...less in the way of economic implications from each wave, and we will see whether that is the case with the Delta variety,” expressing confidence that the handling of the Delta variant will be more effective than handling COVID-19 when it was first declared a pandemic. Impact on the market. The upbeat tone delivered by the Fed resulted in the market going risk-on, increasing the demand for risky assets and currencies. Thus, the safe haven U.S. dollar weakened against the other major currencies.
TVC:DXY
by GH_Lee
Bitcoin Tops and Bottoms Before the S&P500Is Bitcoin a good barometer for the broader market? The chart laid out above suggests this is a possibility - and indeed, it would make a lot of sense, considering how risk tends to peak prior to tactical and cyclical corrections in the stock market, and Bitcoin is broadly considered to be a risk asset. Note how the 2017 macro top in BTC foretold a top in the S&P just 5 weeks later, and in 2018 BTC bottomed just a few weeks before the S&P. Yet again, this relationship held during the 2020 COVID crash with BTC finding a bottom just two weeks before the S&P. Is the recent top formation in Bitcoin signaling potential weakness in the S&P500 that is yet to come? With breadth deteriorating across major indices, the almighty dollar (DXY) finding support and shaping up for a potential double bottom, and the least amount of bears on the AAII survey since Feb 2018, it's possible that the S&P is in for a deeper pullback, one that is well-deserved after such an incredible run from the COVID crash lows. One thing I'm looking for to see confirmation of a tactical top in the broader stock market is the Financials Sector (XLF). If we can't hold above that former major resistance, then we are likely in for a messy S&P over the summer. Remember, assets can correct in both price and time. We may just be in for some more sideways rather than an outright move down. If the S&P does begin to correct, it is safe to assume that Bitcoin may once again find a constructive bottom a few weeks before the S&P. I'll be on the lookout for all of the above and will keep this post updated. Till then, happy trading!
BNC:BLX
by CalmCapital
What on Earth does Risk-On / Risk-Off Mean?If you have been hearing people say things like "The market is in risk-on mode today" and you have no idea what the hell they are on about, then read this. TLDR: Risk-On means that in general, the winds are fair for the market. Market participants feel that there is no real bad news around, economies are running along quite nicely, thank you. Risk-Off means there is either some nervousness or even a panic. When looking at the equity market's Risk-On / Risk-Off status, amazingly, people look at the major currencies for the clue. This may not seem intuitive, but here's why: There are 8 major currencies. Some of them are "commodity currencies". These are CAD (Oil), AUD (minerals mining) and NZD (foodstuffs). When the world economy is rockin', these states to sell and their tax receipts go up, and the rest of the world needs to own their currency to buy their goods. So, their currencies appreciate. Also lumped in with them (certainly for me) is GBP, as the United Kingdom sells services to the world like accountancy, and these services are in more demand when the world is in good shape. So, that gives 4 major Risk-On currencies. There are also 4 Risk-Off currencies. USD, JPY, CHF and (more and more) EUR. These 4 are seen as "reserve" currencies, "safe havens" in a storm, especially USD. When the smelly stuff hits the fan, nervous people sell their CADs and AUDs etc and run for safety. All the safe currencies rally and the commodity currencies sag. Take a look at March 2020, Pandemic hits: Equities traders running around with their pants on the heads, and the "reserve" currencies rally. The indicator used in this chart is freely available in my profile. It might be used to indicate the overbought or oversold nature of the two sets of currencies, to help index and equities traders.
UEducation
by Paul_Varcoe
1
S&P 500 / SPY Breaks Down to Support, Bounce or Larger Crash?The S&P 500 has broken down to trendline support after a failed breakout at 4240. The SPY index formed a high at 4238 and tried to break it at 4255, but failed to hold above that alltimehigh. It is now testing trendline support, and the question is whether price will bounce here at support or will support fail to hold and thus lead to a much larger correction. Part of the reason that I'm looking at the S&P500 even though I mostly focus on Bitcoin and cryptocurrencies is that the correlation between the two has recently been quite high, and they have both been retracing in the past few days, so a recovery in the S&P500 could also bode well for a recovery in Bitcoin and the wider cryptoassets. The key level to watch is 4175. If this level holds, then we remain above the trendline and can expect another leg up. If we close below 4175, then be prepared for some volatility upon trendline break as we might have formed a double top, which will likely also trickle over to Bitcoin and other risk-on assets as well. Of course, it's possible that what we are seeing is similar to what we saw back in March, when price failed to hold a higher high, broke down a bit, and then rallied higher. If price does break down, then the 200 day moving average at 3900 should serve as ultimate support, though I'd think that the Biden administration and the Federal Reserve would have stepped in before that happens.
SP:SPXShort
by cryptotraderog
7
US YieldsOutlook The Fed started raising the fed funds rate beginning in December 2015 but lowered it again in 2019 and 2020. There are ongoing pressures to keep yields low. Economic uncertainty in the European Union, for example, can keep investors buying traditionally safe U.S. Treasuries. Foreign investors, China, Japan, and oil-producing countries need U.S. dollars to keep their economies functioning. The best way to collect dollars is by purchasing Treasury products. In the long-term, these factors can put upward pressure on Treasury yields: The largest foreign holder of U.S. Treasuries is Japan followed by China. China has threatened to purchase fewer Treasuries, even at higher interest rates. If this happens, it will indicate a loss of confidence in the strength of the U.S. economy. It would drive down the value of the dollar in the end. One way the United States can reduce its debt is by letting the value of the dollar decline. When foreign governments demand repayment of the face value of the bonds, it will be worth less in their own currency if the dollar's value is lower. The factors that motivated China, Japan, and oil-producing countries to buy Treasury bonds are changing. As their economies become stronger, they are using their current account surpluses to invest in their own country's infrastructure. They are not as reliant upon the safety of U.S. Treasuries and are starting to diversify away.
TVC:US10YShort
by MiWealth
CADJPY - Is it time to Fade?CADJPY - Is it time to Fade? This is a potential trade I am looking to excel further next week - We've been on up trend for while but now is it time to fade? At this current of time we are within the range of 90.640 - 89.735, a break to either direction. Below the trendline up bears will gain further control 200 ema is a nice area of support zone or we could excel further shorter term to 91.100 areas. Have a great weekend, Trade Journal (Just a trade idea, not a recommendation)
by Trade_Journal
AUDUSD - IS IT TIME TO FADE?AUDUSD - We reached that golden area of 0.80! Then, we faded that area...what's next? This morning typing this we down half of 1% - Since my year ahead outlook 0.80 is an area I have been eyeing for a while, since we finally reached that target area there will be an update video for the Q2 on what to expect. This will be shared privately via YouTube - If you're interested: Comment down below or message privately. I've been fading the majors from the start of the week - as yields rise higher, tech space declining, it's an interesting time. Will there be YCC from the Feds? Commodities are at interesting area. AUDUSD - Follow your own trade plan. Support: 0.78050, 0.77700, 0.77455 Resistance: 0.78790, 0.78970, 0.79300 Target area: 0.77700 areas (ALL DEPENDENT ON PRICE & FUNDAMENTAL FACTORS) I've taken 70% of profits. If price to rise I will be adding to my position to get in further. Key tip: Mostly everyone can analyse a chart and being on a demo account that's the easy part done, but emotionally not everyone can control there live execution state and that what makes you different from just an analyst to being a real market maker! And you can do it. FRIDAY QUOTE: The jealous are troublesome to others, but a torment to themselves. - William Penn Have a good weekend. Trade Journal (DISCLAIMER: Just a trade idea, not a recommendation)
by Trade_Journal