Overview
Gold is currently tracking higher within a small ascending channel – fuelled by the anticipation that the Federal Reserve will halt its interest rate hikes. This expectation is rooted in a series of underwhelming U.S. economic indicators, suggesting constrained potential for additional rate hikes.
Nevertheless, the unexpectedly robust nonfarm payroll...
FTSE 100 Technical Outlook
This week's FTSE price action illustrates traders' sensitivity to interest rate expectations on both sides of the Atlantic.
On Tuesday, the FTSE experienced a post-bank holiday rebound, driven by weaker U.S. job numbers that were perceived to alleviate pressure on the Fed to raise interest rates further. Notably, Tuesday's rally...
NZD/USD forms bearish pin-bar at key resistance
Yesterday’s price action saw NZD/USD form a bearish pin-bar reversal pattern at a key area of resistance. Let’s look at the quality of this sell signal…
Earlier this week, the U.S. dollar had weakened across the board after August’s ADP employment report revealed lower job creation than expected, and the second...
Welcome to our Power Patterns series in which we teach you how to trade some of the most powerful price patterns which occur on any timeframe in every market.
This week’s pattern, the fakeout is beautifully simple and has the power to be highly effective. It has stood the test of time and should be a key part of any price action traders arsenal.
We’ll teach...
What is RSI?
The Relative Strength Index (RSI) is a widely used indicator used by traders in technical analysis that evaluates the strength of a financial instrument’s price movement over a given period. It measures the speed and change of price fluctuation on a scale of 0 to 100, providing insights into overbought or oversold conditions, as well as potential...
What is scalping?
Scalp trading, also known as scalping, is a popular trading strategy characterised by relatively short time periods between the opening and closing of a trade.
Scalping is the shortest-term style of day trading that specialises in profiting from small changes in the price of assets. Its name derives from the way its goals are achieved – by...
Causes of overconfidence bias
In order to define overconfidence bias, it is important to understand some of the causes. These could include:
Doubt avoidance. Very often, people don’t like moments of ambiguity or doubt. Overconfidence could work as a solution, with the overconfident person feeling confident in their abilities to feel sure, even in a situation...
Yesterday, spot gold in the US session initially declined to the $1924 level but later stabilized and witnessed a strong rebound. The market experienced a breakthrough and touched the $1950 mark, ultimately closing at a strong $1960. The daily candle indicated a bottoming out and a subsequent upward movement. Although there was a temporary dip below the $1930...
Swing trading refers to the medium-term trading strategy that involves taking a position in a security for a few days to a few weeks, aiming to profit from price swings. Swing trading strategies employ fundamental or technical analysis to determine whether a particular security could go up or down in price soon.
Fundamental analysis for swing trading...
What is trend trading?
Trend trading or trend following is a trading strategy that involves identifying the direction of a prevailing trend in the financial markets and then buying or selling assets following that trend.
Trend traders tend to use technical analysis tools, such as moving averages (MA), trend lines, and momentum indicators, to determine trends in...
Watch out for USD/JPY as the BOJ's commitment to continue its ultra-loose monetary policy last week weighs on the Yen, all whilst the USD is finding renewed support as markets reprice expectations about year-end rates after the RBA renewed hiking overnight. Markets are now pricing in 22 bps of cuts by December, down from 45bps last week.
USD/JPY has bounced off...
The recent gains in precious metals, most notably gold but also silver, were backed by beliefs that a slowing economy would give way to the end of rate hikes by the Fed, and even possibly a few cuts before year-end. The economic data from December backed this view, which led investors to believe that the US economy was struggling, as CPI, PPI, retail sales, and...
Since early November, when China initially hinted at lifting statewide Covid restrictions, a basket tracking assets linked to the Chinese reopening story has surged by 22%.
In the last 11 weeks, the China reopening basket, which is equally weighted with copper , Korean won , Australian dollar , and the Hang Seng index , has outperformed a global stock market...
Oil WTI failed to break over the 50-day moving average during the session on January 3, and sellers returned after the price topped $80 per barrel.
This resulted in a rapid drop to $73/bbl, making it an interesting area to assess the strength of buyers on dips once again. Remember that the US is actively purchasing crude oil at 67-72 dollars per barrel range in...
Natural gas prices (US Henry Hub) plunged 20% in the first week of 2023, dropping below pre-Russian invasion of Ukraine levels and continuing losses seen in the fourth quarter of 2023.
The sell-off was violent, mimicking a falling knife pattern, with prices sliding back to levels seen towards the end of 2021 and the RSI returning to oversold territory. aPrices...
The European Central Bank (ECB) and the Bank of England (BoE) both raised interest rates by 50 basis points at their final meetings of the year. The Eurozone's policy rate was hiked to 2.5%, the highest in fourteen years, and the UK's to 3.5%, the highest since late 2008.
In contrast to the relatively dovish BoE meeting, the ECB meeting was substantially more...
The trading session on December 13 was full of important technical signals for the S&P 500 index ( US500 ).
After the release of a lower-than-expected US CPI in November (7.1% vs. 7.3% expected and down from 7.7% in October), the SPX surged to 4,137 points; however, the price action reversed sharply following sellers' profit-taking on the good news and in...
In 2022 the diversification between stocks and bonds within a "60/40" portfolio was an ineffective strategy that yielded negative returns and, as a result, did not safeguard the investment.
The reason was that both equities and bonds plummeted in lockstep as a result of the Federal Reserve's interest rate rises, with the correlation reaching its highest level in...
