The US dollar has continued to face selling pressure following the collapse of Silicon Valley Bank, as traders bet that the Fed may pause their tightening cycle at next month's meeting. Whilst Fed fund futures imply a 60.5% chance of a 25bp hike (or 39.5% odds of a pause), this is quite a sudden chance considering the curve suggested ~80% chance of a 50bp hike...
Friday was the most bearish day for the FTSE since September, as concerns over SVB (Silicon Valley Bank) and the potential for contagion across the finance sector weighed on sentiment. Yet a joint statement from the Fed, Treasury and FDIC (Federal Deposit Insurance Corp) released on Sunday assured that deposits at the bank will be guaranteed, which helped boost...
The weekly timeframe has been slowly developing a bullish structure. The retracement from the all-time high stalled at a 61.8% Fibonacci ratio (from the pandemic low), and prices have since rallied to trade above the previous cycle high. OBV (on balance volume) is also confirming price action high. A recent pullback from the March high has stabilised above the...
USD/JPY is grinding higher on the daily chart, although it seems wary of the 200-day MA overhead. But at the same time, it looks as though it at least wants to test it (and is sat near the daily R1 pivot).
Prices have pulled back on the 1-hour chart in a corrective fashion, and the corrective lows found support at the 50-hour EMA and a previous swing high. Prices...
The Australian economy has had a few of soft data points this week which, whilst not detrimental to the economy, will be duly noted by the RBA as they seek to cool the economy without completely breaking it (and ponder a pause in rate hikes). Yesterday we found inflation was 'only' 7.4% y/y, compared to 8.1% expected and 8.4% prior - and GDP was soft at 0.5%...
USD/CAD trades within a bullish trend on the 4-hour chart, with yesterday’s low forming above a prior resistance level. Prices are also back above the 20-dar EMA and the weekly pivot point, so perhaps we have seen the swing low. Strong economic data from the US could send the pair higher on bets of a more aggressive Fed, with a soft GDP report for Canada also...
If you see the related articles, it shows we did a pretty decent job of nailing the turning points down $1800. And with gold prices having found support around its 100 and 200-day EMA's, US yields stalling near their cycle highs and the dollar in need of a pullback, we suspect another inflection point has been seen on gold.
The 1-hour chart shows a double bottom...
The FTSE snapped a 4-day losing streak yesterday, after the pullback from its record high found support along the bullish trendline. A bullish engulfing candle also closed above the 10 and 20-day EMA’s, after the RSI (2) went into oversold territory the day prior. So it appears a swing low has formed and we’re looking for a move back above 8,000 whilst prices...
A bullish engulfing candle formed on Friday thanks to a hot US inflation report. The fact that incoming BOJ governor Ueda delivered a dovish message at his confirmation hearing simply adds to our bullish conviction on USD/JPY.
Prices are now consolidating on the 1-hour timeframe, so we'd welcome any pullback towards the weekly pivot point to consider long setups,...
Back in October, we made an outlandish call for Tesla to more than halve and fall from $220 down to $100. Four months later, we are both delighted and somewhat saddened to see it came to fruition almost perfectly (although technically it only fell to $101.81, leaving out bear call out of pocket by $1.81 per share). It was nothing personal against the company or...
It was a tough end to the week for gold bugs which saw the yellow metal plunge 5% from its YTD high. Yet support was found just above the 50-day EMA, and two inverted hammers (with slight bullish closes) show that bearish momentum is waning.
To my eyes it looks as though gold is ready to drift higher as part of a countertrend move against its NFP losses. Yet I...
The US dollar index (DXY) posted three solid days of gains between Thursday and Monday. I cannot say I am overly surprised to see A Doji formed yesterday given the resistance cluster around 103.50 which includes a previous support zone, trend resistance and the 50-day EMA. But we also had a change in sentiment for markets yesterday that were eager for a decisively...
Hawkish Fed members have helped to push US yields and the dollar higher. We saw some volatility across yen pairs on Friday after the favoured candidate to success Kuroda (and a dove) pulled out of the nomination, and Japan’s PM backed a more hawk candidate. If a hawk takes the helm, the yen will likely strengthen on hopes that the BOJ will abandon YCC. But until...
The combination of hawkish Fed speak and firmer inflation has seen the US dollar strengthen overnight. But we're interested in shorting the Kiwi dollar against it, given yesterday's lower forecasts for 2 and 3-year inflation forecasts by RBNZ. It should be noted that RBNZ hold their monetary policy meeting on Wednesday February the 22nd, and there has been call...
On Friday the euro tried (but failed) to close below the ‘pandemic low’, instead closing the day with a bullish hammer candle. It also closed back above the 50-day EMA and has continued to hold above it during Asian trade. Given the fact the US is on a public holiday and data is light, we see the potential for range trading – which means bulls may be tempted to...
The main event for today is actually the release of the FOMC minutes tonight at 19:00 GMT – for which we have gold in focus.
The rise of US yields and increased expectations of a 50bp March hike mean the minutes have become of greater importance. As traders had assumed a 25bp February hike was practically a given, it could come as a surprise if we learn that the...
It may have taken a few weeks, but markets are finally pricing in what we argued all along; a higher terminal rate and no cuts this year.
If you cast your mind back to the Fed’s recent 25bp hike, it is fair to say the Fed were not impressed with the market’s original response. Fed fund futures not only lowered the terminal rate to 5% but even began pricing in...
