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Tensions

Potential Upside for EURNZDTechnical overview: The EURNZD currency pair has recently formed a head and shoulders pattern, and the price is currently at the neckline of this pattern as well as a significant resistance zone (1.8065-1.8160). If the price successfully breaks through this area, it could reach the specified price targets. However, if the price reverses downward from this zone, the first valid support level will be 1.78360. Fundamental overview: Considering recent geopolitical tensions that have driven the market toward risk-off sentiment, along with recent statements from the RBNZ, the NZD has weakened over the past month. If tensions continue to escalate in the coming days and weeks, we can expect this currency pair to increase further. This analysis will certainly be updated after the price reacts to the resistance zone and neckline. Don’t miss the upcoming trading opportunities in this currency pair. What are your thoughts on EURNZD ? are you bullish or bearish?
Long
by habib75rajabi
5
DEFENSE WINS CHAMPIONSHIPS (Global Conflict Summary EDITION)Per the council of foreign relations, these are the following current global conflicts. I've included a brief description of each conflict. It's important to understand these if you're planning or already are investing in defense stocks. Per TA, I've labeled bearish price targets, bullish price targets, relevant trends. It looks overvalued from analysis on ITA, but there is upside. I'd say that short term probably favors bulls (talking maybe weeks if not less), mid term probably favors the bears (multiple months), long term will likely favor bulls, but it will depend on the movement we see over FEB and March. Global Conflict Summary Americas Criminal Violence in Mexico The criminal violence in Mexico involves various organizations such as Sinaloa, Los Zetas, Tijuana/AFO, Juárez/CFO, Beltrán Leyva, Gulf, La Familia Michoacana, the Knights Templar, and Cartel Jalisco Nuevo Generación (CJNG). The violence is attributed to the increase in crime rates and the limited interventions by the state and municipal police. Instability in Haiti The instability in Haiti involves the government, opposition parties, and the international community. The crisis revolves around the dispute over the presidential term and the government’s inability to control skyrocketing prices of commodities. Instability in Venezuela Venezuela is facing an unprecedented social and humanitarian collapse due to poor economic policies, political conflict, and the international community’s unsuccessful attempts to bring about positive change. The conflict involves the government under President Nicolás Maduro and opposition groups. Asia Instability in Afghanistan Since the Taliban reclaimed control of Afghanistan in 2021, the country has further plunged into political and economic instability. The conflict involves the Afghan government, the Taliban, and various local and international actors. Territorial Disputes in the South China Sea China’s sweeping claims of sovereignty over the sea have antagonized competing countries. The key parties involved in this territorial dispute are China, the Philippines, and the US. North Korea Crisis North Korea could resort to nuclear weapons in a crisis as it is making significant progress toward implementing a more robust nuclear strategy. The crisis involves North Korea, South Korea, the United States, Japan, and other international actors. Instability in Pakistan Pakistan continues to face multiple sources of internal and external conflict. Extremism and intolerance of diversity and dissent have grown, threatening the country’s prospects for social cohesion and stability. The conflict involves the Pakistani government, opposition groups like the Pakistan Muslim League and the Pakistan Peoples Party, and militant groups like the Tehrik-e-Taliban Pakistan (TTP). Conflict Between India and Pakistan Since 1947, India and Pakistan have been involved in a number of wars, conflicts, and military standoffs, with the Kashmir conflict serving as the catalyst for every war between the two states. The conflict primarily involves India and Pakistan, with the disputed region of Kashmir being a major point of contention. Confrontation Over Taiwan Tensions are rising over Taiwan as China’s power and assertiveness grows, competition between the U.S. and China spreads, and the Taiwanese people develop a distinct identity increasingly disassociated from the mainland. The key parties involved in this conflict are China, Taiwan, and the US. Civil War in Myanmar The civil war in Myanmar escalated significantly in response to the 2021 military coup d’état and the subsequent violent crackdown on anti-coup protests. The conflict involves the National Unity Government, People’s Defence Force, Chinland Defence Force, Chin National Defence Force, Karenni Nationalities Defence Force, and other ethnic armed organizations against the State Administration Council and Tatmadaw. Europe and Eurasia War in Ukraine The war in Ukraine involves Ukraine and Russia. The conflict is over the sovereignty of Crimea and parts of eastern Ukraine, which Russia annexed in 2014. Nagorno-Karabakh Conflict The Nagorno-Karabakh conflict involves Armenia and Azerbaijan. The dispute is over the Nagorno-Karabakh region, which is internationally recognized as part of Azerbaijan but is governed by ethnic Armenians. Middle East and North Africa Conflict in Syria The conflict in Syria involves the Syrian government, opposition groups, and various international actors. The civil war began in 2011 as part of the Arab Spring protests and has since escalated into a multi-sided conflict involving numerous factions and foreign powers. Instability in Iraq The instability in Iraq involves the Iraqi government, various ethnic and religious groups, and international actors. The conflict stems from sectarian tensions, political instability, and the presence of ISIS. Israeli-Palestinian Conflict The Israeli-Palestinian conflict involves Israel, Palestine, and various international actors. The conflict is over the sovereignty of the Palestinian territories and the establishment of a Palestinian state alongside Israel. Sub-Saharan Africa Conflict in the Central African Republic The conflict in the Central African Republic involves the government, various rebel groups, and international actors. The conflict stems from political instability, ethnic tensions, and control over the country’s rich natural resources. Conflict in Ethiopia The conflict in Ethiopia involves the Ethiopian government, the Tigray People’s Liberation Front, and various ethnic and regional groups. The conflict stems from political tensions, ethnic disputes, and disagreements over the country’s system of ethnic federalism. Please note that this is a brief summary and does not cover all aspects of the conflicts. For more detailed information, please conduct further research.
AMEX:ITA
by nicktussing77
Gold plunges as investors await fresh cues about Fed rate cutsGold price has been hit hard amid uncertainty over US Retail Sales and Industrial Production data. A strong US Retail Sales data would provide more room for the Fed to maintain higher interest rates. •Further escalation in Middle East tensions could bring some revival in the gold price. Gold price (XAU/USD) witnesses a sell-off after failing to reclaim the weekly high above $2,060. The precious metal drops as investors reconsider the timeframe in which the Federal Reserve (Fed) may reduce interest rates. This comes after the release of the sticky Consumer Price Index (CPI) report for December, as well as hawkish comments from European Central Bank (ECB) officials recalibrating broader market expectations. While markets continue to lean towards a rate cut decision in March, policymakers are in no hurry to endorse a dovish stance on interest rates. The consumer price inflation in the United States economy is almost double the required rate of 2%, labor demand is steady and the chances of a recession are low despite interest rates remaining in the range of 5.25-5.50%. This would allow Fed policymakers to maintain a restrictive monetary policy stance for the time being. Going forward, monthly US Retail Sales, the Industrial Production data and the Fed's Beige Book are expected to provide fresh cues about the interest rate outlook. Daily Digest Market Movers: Gold price falls sharply as US Dollar, yields recover Gold price corrects to near the crucial support of $2,040 as the US Dollar Index (DXY) has recovered sharply ahead of crucial United States economic data for December. A strong run-up in the precious metal that was propelled by firm bets in favor of early rate cuts by the Federal Reserve and deepening Middle East tensions, has stalled for now. • As per the CME Fedwatch tool, chances in favor of an interest rate cut in March have eased nominally to 66% against 70% recorded earlier. A gradual decline has come as investors are reconsidering strong optimism for Fed starting the rate-cut cycle from March after getting mixed cues from stubbornly higher headline consumer price inflation and softer factory gate price data. Investors would get more cues about when the Fed could plan rate cuts after the release of the monthly US Retail Sales and Industrial Producer data, which are due to be released on Wednesday. • Retail Sales are expected to have grown at a higher pace of 0.4% against 0.3% increase in November. Consumer spending excluding automobiles is estimated to have grown at a steady pace of 0.2%. • The Industrial Production data is seen stagnant against 0.2% growth in November on a monthly basis. Upbeat economic data would comfort Fed policymakers for maintaining a restrictive monetary policy stance while a soft report will firm the case of rate cuts in March. • Before that, commentary from Fed Governor Christopher Waller will be keenly watched by market participants. Investors are eager to know how the Fed is considering the timeframe for the rate-cut cycle after the release of sticky consumer price inflation data. • The appeal for the gold price has not been impacted on a broader basis as crises in the Middle East region have deepened after the airstrikes from the US and the United Kingdom. Iran-backed Houthi rebels have threatened to retaliate for attacking groups in Yemen, which will keep risk sentiment on its toes. • The US Dollar Index has broken to a new high slightly above 103.00 as investors hope that other central banks will also start reducing interest rates earlier than previously projected. Meanwhile, the 10-year US Treasury yield has rebounded swiftly above 4.0%. Technical Analysis: Gold price corrects to near 20-day EMA Gold price has faced a sharp sell-off after failing to recapture the weekly high of $2,062. The precious metal has dropped to near $2,040 and is expected to remain on tenterhooks before getting fresh cues about the timing of rate cuts from the Fed. The yellow metal has surrendered entire gains generated on Monday and has corrected to near the 20-day Exponential Moving Average (EMA), which trades around $2,039. More downside could appear in the gold price if it fails to defend the January 3 low of $2,030, which will expose it towards the psychological support of $2,000.
OANDA:XAUUSDShort
by sniper_2022
What would happen to S&P 500 if China attacks Taiwan?Since last week the media has published videos and Chinese politicians' statements about the Chinese military drills near Taiwan. Taiwan has also conducted military exercises and preparatory work with the civilian population in the event of an attack. On August 3, the NYT, quoting Chinese state media, published an article about the following Chinese military drills scheduled on August 4 and a place of exercises. Chinese media offered five swaths of the sea surrounding Taiwan. If true, it can be a hostile act, possibly igniting conflict between China and unrecognized Taiwan. Both countries are essential for the world economy, meaning the conflict would affect markets. I hope it will not happen . However, this risk urged me to start a series of posts ' What would happen to asset_name if China attacks Taiwan? ' A brief : China is the second economy in the world by nominal GDP. China is the main trading party for the US, Europe, and many other countries and regions. Taiwan is the heart of semiconductor manufacturing for all industries around the world. Bearing this in mind, recall that S&P 500 is a world barometer of economic health or a barometer of the capital markets financial system. The index has a diverse base of constituents representing the American economy. Companies from the index have business with China: manufacturing, trade, intangible assets, and financial transactions. Besides, Taiwan is the leading supplier for many American manufacturing companies working in consumer durables, communication, electronic technology, and producer manufacturing. The conflict would directly affect negatively on most American companies. It could slow economic growth (I think it would be a recession) and create much bigger supply problems than the 2021 supply chain crisis. Companies that heavily relied on Taiwan semiconductors would experience issues first. For instance, it could be Apple , Tesla , and AMD . We do not know what kind of sanctions the US and its allies will impose on China. The next dropping wave of the index could happen if it is the anti-Russian-style sanctions. China is not only the biggest exporter of goods but the most prominent importer of commodities. Heavily relied on fossil fuels. For example, the US government may prohibit American oil and gas exports to China, causing damage to American O&G companies. Regarding retail and non-durable, they also depend on imports from China. So I believe prices of utility stocks could be steady in a storm. I also thought about Air & Defence, but it could have heavily relied on Taiwanese and Chinese imports. Perhaps a few companies are not dependent on Asian supplies in the sector, but the whole industry is vulnerable. I do not want to bury deep into fundamentals cause the article is about the index. Let's look at the chart. I estimate the potential conflict would hurt the index dramatically. The first target is 3700 ; semiconductor-dependent companies would drive the index drop by more than 10%. The following support is on 3200 . The best instruments for the trading idea are put options with the corresponding strikes. For futures traders, I suppose 4200 is a stop-loss. Timing for the trade matters much. I believe that options with an end-of-month expiration date could be good. The position holding period is 7 days to next Thursday. However, we do not know the date. Solely China knows the exact date if the plan exists. The risk could realize during the next 7 days or be postponed to next month or even later. Here I will pause because it is hard to forecast how long Taiwan can fight and what sanctions will be imposed. I doubt that sensitive restrictions would be imposed during the first days. I also doubt that the US will impose harsh sectoral sanctions if China takes over Taiwan quickly. I wish you peace! Thank you for your reading, and have profitable trading! Comment your thoughts!
SP:SPXShort
by Nikita_Kalinin