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USDJPY Daily Outlook: Bearish Bias Expected Amid Key Economic !USDJPY Daily Outlook: Bearish Bias Expected Amid Key Economic Drivers (07/11/2024) Overview On November 7, 2024, USDJPY appears to be leaning toward a slight bearish bias as various fundamental factors impact the pair. This article delves into the primary drivers shaping USDJPY today, including central bank policy stances, global market sentiment, and economic data releases. Traders and investors on TradingView can benefit from a close analysis of these influences to navigate the USDJPY pair’s movement. Keywords: USDJPY forecast, forex trading, Japanese yen, U.S. dollar, Bank of Japan, Federal Reserve, inflation, interest rates, technical analysis, forex market --- Key Factors Supporting a USDJPY Bearish Bias Today 1. Dovish Stance from the Federal Reserve The Federal Reserve has recently shifted toward a more cautious tone on rate hikes, with key policymakers indicating a preference for a "wait-and-see" approach. This cautious stance could limit USD strength, particularly as traders anticipate no further rate hikes unless inflation surges unexpectedly. A softer dollar environment could weigh on USDJPY. 2. Bank of Japan’s Slightly More Hawkish Outlook While the Bank of Japan (BoJ) has traditionally maintained an ultra-loose monetary policy, recent comments from BoJ officials suggest a growing willingness to adjust policy if inflation stays persistently higher. This subtle shift in tone has sparked interest in the yen as traders reassess Japan’s inflation and policy outlook, which could add bearish pressure on USDJPY. 3. Rising Risk Aversion Risk sentiment has turned cautious in global markets, with equities slightly under pressure and investors showing renewed interest in safe-haven assets. The yen, as a traditional safe-haven currency, often benefits in times of risk aversion, making USDJPY more vulnerable to downside movement when risk sentiment fades. 4. Weak U.S. Economic Data Recent U.S. economic indicators, such as declining consumer sentiment and slower employment growth, are casting doubt on the resilience of the U.S. economy. Softer data contributes to concerns that the Fed may pause or even reverse its tightening, further pressuring USD and potentially driving USDJPY lower. 5. Technical Analysis Insights On the technical side, USDJPY is trading near significant resistance at the 150.00 level, a historically sensitive price area. If sellers defend this resistance, USDJPY could turn bearish, with initial support around 148.00. Technical indicators such as the RSI suggest USDJPY may be overbought, aligning with a potential pullback. USDJPY Today: What to Watch For - U.S. Initial Jobless Claims – Today's release of U.S. jobless claims data may further affect USD sentiment, particularly if the data reveals a labor market slowdown, adding to USDJPY’s bearish potential. - BoJ Commentary – Any fresh statements from BoJ officials about policy flexibility could strengthen the yen and add further pressure on USDJPY. Conclusion Today, USDJPY shows signs of a bearish bias due to dovish signals from the Fed, a potentially more hawkish BoJ, risk aversion, and weaker U.S. data. As always, traders should monitor key data releases for potential market-moving surprises that could impact USDJPY. SEO Tags : #USDJPYforecast #ForexTrading #JapaneseYen #USD #USDJPYtechnicalanalysis #ForexMarket #RiskSentiment #CentralBankPolicy #DailyForexAnalysis
Short
by PERFECT_MFG
NZDUSD Daily Outlook: Bullish Bias Expected Amid Key FundamentalNZDUSD Daily Outlook: Bullish Bias Expected Amid Key Fundamental Drivers (07/11/2024) Overview On 7th November 2024, NZDUSD is showing signs of a slight bullish bias, driven by key economic data releases and broader market sentiment. This article provides an in-depth look at the factors shaping NZDUSD today, including central bank commentary, global market trends, and recent shifts in risk sentiment. Keywords: NZDUSD forecast, New Zealand dollar, forex trading, USD, economic data, central bank policy, risk sentiment, technical analysis, forex market --- Key Factors Supporting NZDUSD Bullish Bias Today 1. Federal Reserve Dovish Outlook Recent Federal Reserve statements have taken a slightly dovish tone, with policymakers emphasizing a "wait-and-see" approach to further rate hikes. The possibility of a Fed pause on interest rates provides support to the New Zealand dollar, as market sentiment leans towards a softer USD. 2. RBNZ’s Hawkish Stance on Interest Rates The Reserve Bank of New Zealand (RBNZ) recently signaled a focus on inflation control, reinforcing a hawkish stance relative to the Fed. This contrasts with other central banks, positioning NZD as an attractive currency in the current global environment. Markets are pricing in a limited chance of a rate hike from the RBNZ in the near term, which could further support NZD. 3. Improved Risk Sentiment Global markets have seen an increase in risk appetite, with equities rebounding and commodities trading higher. This shift often benefits the NZD due to its reputation as a commodity-linked and high-yield currency. As investors seek yield, demand for the New Zealand dollar may rise, enhancing NZDUSD. 4. Strong New Zealand Economic Data New Zealand’s recent economic data, including employment figures and business confidence, indicate resilience in the economy. Solid domestic growth and low unemployment rates suggest underlying strength, which could further boost NZD demand against USD. 5. Technical Analysis Indicators From a technical standpoint, NZDUSD is approaching key support levels around 0.5900, showing upward momentum and signaling a potential reversal. RSI (Relative Strength Index) levels indicate that the pair may have room to move higher before hitting overbought territory, aligning with a bullish outlook. NZDUSD Today: What to Watch For - US Initial Jobless Claims – Scheduled later today, these figures may influence USD if they show a labor market slowdown, potentially adding to the Fed’s dovish stance and supporting NZDUSD. - NZDUSD’s Resistance Levels – Key resistance near 0.6050 could be tested if bullish momentum continues, while support at 0.5900 could offer a base. Conclusion Given the softer stance from the Federal Reserve and favorable economic data from New Zealand, NZDUSD shows signs of a slight bullish bias. As always, forex traders should monitor any significant data releases closely, as these could prompt volatility in NZDUSD. SEO Tags: #NZDUSDforecast #ForexTrading #NewZealandDollar #USD #NZDUSDtechnicalanalysis #ForexMarket #RiskSentiment #CentralBankPolicy #DailyForexAnalysis
Long
by PERFECT_MFG
EURUSD Analysis: Anticipating a Slight Bearish Bias Towards 1.1!EURUSD Analysis: Anticipating a Slight Bearish Bias Towards 1.10000 (24/09/2024) As we analyze the EURUSD pair this week, a slight bearish bias appears probable, with a target near the pivotal level of 1.10000. Key drivers for this outlook include the recent economic data releases, central bank policies, and market sentiment. 1. Economic Data: Recent Eurozone economic indicators have shown mixed results, with weak manufacturing PMI figures suggesting slowing growth. Conversely, US economic data, particularly strong job numbers and retail sales, point to a robust economy, potentially strengthening the dollar. 2. Central Bank Divergence: The European Central Bank (ECB) is likely to maintain a dovish stance amid economic uncertainties, while the Federal Reserve appears committed to a tighter monetary policy. This divergence could exert downward pressure on the euro. 3. Market Sentiment: Increased risk aversion due to geopolitical tensions may lead investors to favor safe-haven currencies like the USD, further supporting the bearish outlook for EURUSD. In conclusion, the combination of economic fundamentals, central bank policies, and market sentiment suggests that EURUSD may trend towards 1.10000 this week. Traders should stay alert for potential market shifts and adjust their strategies accordingly. Keywords: EURUSD analysis, bearish bias, economic data, central bank policy, ECB, Fed, market sentiment, forex trading, trading strategies, 1.10000 target.
Short
by PERFECT_MFG
Central bank policy has catalysed a valuation opportunity2020 and 2021 saw investors putting record amounts of investments into thematic funds. Whilst no two thematic funds are the same, two things in particular were noticeable: 1. Strategies focused on software were able to showcase very strong revenue growth metrics, in many cases providing solutions that were more broadly used during the Covid-19 lockdown periods. Investors were attracted to these growth metrics and, in many cases, the assets piled in. 2. As performance accelerated, so did valuations, at least measured on an enterprise value to trailing 12-month sales (EV-Sales) basis. This tells us that, even though sales were growing, investors were pushing up valuations because of their excitement in future potential. Obviously, in 2022 the environment has changed. -The WisdomTree Team8 Cybersecurity Index (WisdomTree Cybersecurity), Nasdaq CTA Artificial Intelligence Index and BVP Nasdaq Emerging Cloud Index represent three distinct indices aiming to capture companies in three megatrends. Each touches the software space, but we recognise that the Nasdaq CTA Artificial Intelligence Index is slightly different as it also incorporates significant exposure to semiconductor companies, which can have very different relevant financial metrics than software companies. -The BVP Nasdaq Emerging Cloud Index has seen three distinct regimes, looking at the EV-Sales metric. October of 2018 to April of 2020 had the valuation moving around but sticking below 10.0x. Then, from April of 2020, the valuation ratio expanded towards a level of 12.0x to 14.0x, until November 2021. In November 2021, the ratio fell off and seems to have stabilised at roughly 4.0x to 5.0x as of July 2022. We can clearly see how these dates correspond to different parts of the Covid-19 pandemic and announcements of shifts in central bank policies. -WisdomTree Cybersecurity, during its shorter live history, has behaved with high correlation to the BVP Nasdaq Emerging Cloud Index. It is notable that ‘cloud security’ is an important part of cybersecurity today, and there is overlap between these indices. Today, one can consider if the fact that cybersecurity is essential to the strategy of any company translates to a higher valuation multiple than what we’d see for the general cloud computing company. -The Nasdaq CTA Artificial Intelligence Index is more diversified in terms of industry—there are software companies, but there are also semiconductor companies. The EV-Sales multiple has dropped from November 2021 to July 2022, but from a level of roughly 4.0x to a level of slightly above 2.0x. Semiconductors also tend to have their own cycle of boom-and-bust where there can be a shortage, massive investment, oversupply or a market correction and the cycle continues in a different way than purely focused software companies. Conclusion—a signal to invest? We wish the matter was as simple as, ‘valuation is down a certain percentage, therefore it has bottomed and it is a great time to enter’. Unfortunately, all three of the indices shown in Figure 1 could drop further from here. We can note the revenue growth of some select cloud companies, recognising that the BVP Nasdaq Emerging Cloud Index saw the largest overall drop in the EV-Sales ratio. -Squarespace, Tenable, ServiceNow, AppFolio, 2U, Shopify and Zendesk reported quarterly results during the week of 25 July 2022, on the early end of the quarterly earnings reporting cycle1. -If we think in terms of ranges: Squarespace and 2U saw revenue growth in the 0-10% range; Shopify was between 10-20%; Zendesk, ServiceNow and Tenable were in the 20-30% range; and AppFolio was the leader at 32% revenue growth, year-over-year2. We are tending to see cloud computing companies guiding in the range of either stable or slightly lower growth for 20223. As yet, we have not seen revenue growth ‘disasters’, but that doesn’t mean it couldn’t happen as companies continue to report. Tobias Lütke, CEO of Shopify, wrote a letter that was posted to Shopify’s public site concerning their strategic decision to let go of around 10% of their workforce4. Included, was the chart in Figure 2 which we think is illustrative of what we are seeing in a lot of the software space. -Shopify is focused on ecommerce, so the ecommerce adoption rate is critical to their business. -Ecommerce is still on a significant growth trend, but it’s clear that the slope is moderating back to the longer-term trend after a very large spike. Many software companies might have been priced as though the ‘covid spike’ in growth was going to continue, and what we are seeing in 2022 is the need to moderate back to a still growing but more sustainable growth figure. We think that ‘growth = opportunity’, but recognise that it will be critical to see central banks transitioning from aggressive tightening to slowing or pausing their tightening. A massive rally in software company share prices would be difficult to see in the face of continued 75 basis point hikes. One way to potentially manage this risk could be a longer investment horizon, where the risks associated with any singular macroeconomic environment can typically be lessened. Sources 1 Source: Bloomberg for the aggregation of quarterly earnings reporting dates 2 Source: Respective company investor relations website for each specified company where they post a press release and presentation reporting the most recent results 3 Source: Company investor relations websites, recognising that not all companies provide guidance or provide it based on the same exact metrics or time periods 4 Source: news.shopify.com This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
C
by aneekaguptaWTE