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NASDAQ Pullback before 16,500!On November 17th, the USA's technology stocks index closed with a modest gain of +0.03%. The opening was stable compared to the previous day's closing, followed by a gradual improvement throughout the session. The short-term trend of the Nasdaq 100 is strengthening, with a resistance area identified at 15,956.4, while the nearest support is seen at 15,601.2. An upward continuation towards the level of 16,311.6 is expected. Furthermore, after the breakout from the bearish channel in the daily chart, I anticipate a retracement to the level of approximately 15,200, which corresponds to the 0.5% Fibonacci level. After that, I will aim to ride the upward trend, targeting an entry with a goal between 16,300 and 16,700. Let me know what you think, comment, and leave a like. Greetings from Nicola, CEO of Forex48 Trading Academy.
NASDAQ:NDXLong
by Forex48_TradingAcademy
14
USOIL: Pullback to the upside before the descent! West Texas Intermediate (WTI), the benchmark for U.S. crude oil, has rebounded from a three-month low of $72.22, experiencing a more than 4% increase during the mid-North American session. This rise has been attributed to U.S. sanctions on Russian oil shippers and profit-taking by traders. Currently, WTI is traded at $75.97 per barrel, marking a gain of 4.27%. The U.S. Treasury Department has imposed sanctions on companies and vessels involved in shipping oil beyond the G7's $60 limit, with the aim of reducing Russian profits linked to actions in Ukraine. Despite an increase in U.S. crude oil stockpiles and a rise in Baker Hughes' drilling rig count, indicating growing oil production, WTI prices have not been significantly influenced. Additionally, the price is in a bearish channel with the possibility of a pullback to the upside before resuming the downward trend towards 68 points. Let me know what you think, comment, and leave a like. Greetings from Nicola, the CEO of Forex48 Trading Academy.
TVC:USOILShort
by Forex48_TradingAcademy
13
GBP/USD Pullback in Sight Before Reaching 1.28?The GBP/USD pair is currently slightly above the 1.2400 level, navigating the upper part of the recent consolidation range. Initially, the British Pound gained 2.25% against the US Dollar midweek but later trimmed its increase to a more modest 1.65%. Despite general market optimism due to speculation about the Federal Reserve possibly pausing interest rate hikes, the GBP/USD remains trapped in a mid-range position, influenced by disappointing economic data from the UK. In October, retail sales in the UK decreased by 0.3% on a monthly basis, sharply contrasting with the expected increase of 0.3%. September's data was revised downward, changing from -0.9% to a significant -1.1%. Retail sales in the UK on an annual basis recorded an even steeper decline, with a decrease of -2.7% compared to the previous -1%, surpassing the forecast of -1.5%. The next focus for investors will be on the release of the Federal Reserve meeting minutes next week. From a technical perspective, the GBP/USD has recorded a 1.75% increase during the week, holding onto midweek gains. The key level to watch is the midweek peak at 1.2510, representing a significant challenge for the bulls. Additionally, next week, the price may face strong resistance at 1.2544, which could trigger a slight retracement before continuing upward towards 1.26-1.28. Share your opinions in the comments and give it a like. Have a great weekend and happy trading to everyone from Nicola, CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
11
XAUUSD: Breakout of 2000 in sight!Gold, consolidating above $1,980 this Friday, aims to break a two-week downtrend. Despite the potential for a US dollar recovery, the decline in Treasury bond yields supports gold's upward movement. Surging above the 21-day Simple Moving Average at $1,974, Thursday's close motivated buyers. The 14-day Relative Strength Index remains comfortably above the midline, confirming the upward trend. The next challenge is the descending trendline resistance at $1,992, near the November 6 high of $1,993. A breakthrough could push buyers to target the psychological $2,000 level. In case of selling pressure, initial support lies at the 21-day SMA at $1,974, with a risk of rapid decline to $1,960. Further downward extension may test psychological support at $1,950. Gold remains influenced by risk trends and Federal Reserve statements. US-China trade tensions and Fed rate uncertainty keep investors cautious. In a market of uncertainty, the safe-haven US dollar limits gold's upward attempts. However, gold benefits from recent Treasury bond yield declines, with hopes the Fed's rate-hiking cycle is done and rate cuts are anticipated by May next year. Weak US economic data reinforced expectations of a Fed pause, justifying the gold surge. In October, the US Producer Price Index had its steepest decline in three and a half years, and Consumer Price Index inflation dropped to 3.2% YoY. Retail sales fell 0.1% in October. Thursday saw US initial claims rise by 13,000 to 231,000 for the week ending November 11. Gold prices are likely to maintain an upward trend, but end-of-week profit-taking and a potential US dollar recovery may pose challenges. Data on US housing starts and building permits are expected to have a limited impact on US dollar trading.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
11
GBP/USD: Pullback after Asia and ahead of 1.27.GBP/USD is moving sideways with a negative tone near 1.2410 during the Asian hours on Friday. The US Dollar (USD) finds support despite positive data on US jobless claims and a decrease in US Treasury yields. Continuing Jobless Claims for the week ending on November 3 increased to the highest level since 2022 at 1.865 million, compared to the previous reading of 1.833 million. Additionally, Initial Jobless Claims for the week ending on November 10 rose to 231,000, exceeding the expected 220,000, marking the highest level in nearly three months. Despite challenging labor market indicators, the US Dollar Index (DXY) recovered ground. Notably, the yield on the 10-year Treasury note bottomed at 4.43% on Thursday. However, it is observed that the DXY is bidding lower around 104.30 at the time of writing. Federal Reserve representatives have spoken out to counter expectations of rate cuts. Cleveland Fed President Loretta Mester emphasized that the US central bank is data-dependent when considering whether to raise rates further, reflecting the nuanced approach taken in response to economic conditions. The UK inflation report for October revealed a notable decline in the annual rate of the Consumer Price Index (CPI), dropping to 4.6% from the previous level of 6.7%. The monthly rate also eased to 0.0%, falling short of the expected 0.1%. Core CPI (Year-on-Year) also contracted to 5.7% from the previous reading of 6.1%. Despite the Bank of England (BoE) emphasizing the need for higher rates, market participants are not anticipating more rate hikes. Investors are awaiting key economic indicators, focusing on UK Retail Sales and US housing data. Additionally, I note how the price has reacted at the level of 1.25, near the 0.5% Fibonacci level, during the Asian session. I expect a slight pullback to regain liquidity below the Asian session low before aiming for a long position towards 1.27. Let me know what you think, leave a like and comment. Greetings and happy trading from Nicola, CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
18
EUR/USD: Two long scenarios with a target of 1.09!The EUR/USD currency pair recently reached a high of 1.0896, the highest level since late August, before experiencing a slight pullback below 1.0850. Despite softer-than-expected US economic data and lower Treasury yields, the pair remains above its moving averages on the daily chart. The short-term technical outlook suggests a potential upward movement, with indicators on the 4-hour chart showing signs of recovery. The US Dollar has modestly recovered after a recent decline, as investors anticipate the Federal Reserve's reluctance to further raise rates and the possibility of a new rate-cut cycle. Financial markets turned optimistic, leading to a decline in the safe-haven US Dollar and pushing EUR/USD closer to 1.0900. It's noted that other US economic data indicates a relatively stronger local economy, which could potentially strengthen the US Dollar in the future. Before Wall Street's opening, ECB President Christine Lagarde highlighted the resilience of the European financial system in avoiding severe systemic risks. On the daily chart, two possible long scenarios are marked, one with a retracement, which is the one I will target for a long entry, and then the second scenario that predicts a direct rise tomorrow towards 1.09. Comment and leave a like, greetings from Nicola, the CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
10
Gold Surges on Weaker US Inflation DataThe price of gold has experienced substantial gains, surpassing $1,950 following a less pronounced increase than anticipated in the US Consumer Price Index (CPI) for October. This has led traders to scale back their bets on a December Federal Reserve rate hike. The US dollar slid in tandem with US Treasury bond yields due to disappointment in US inflation data. Currently, the price of gold is confined to a narrow range, correcting towards the 38.2% Fibonacci retracement, situated around $1,933.80. The short-term outlook has turned bearish, with gold trading below the 20-day Exponential Moving Average (EMA), although the 50-day EMA at approximately $1,938.00 continues to provide support. Investors await October's US inflation data, hoping for clarity on monetary policy. Economists project steady growth in the core Consumer Price Index (CPI) but a slowdown in overall inflation. Persistent US inflation could fuel expectations of further restrictive measures by the Federal Reserve (Fed), committed to timely reducing inflation to 2% and prepared to raise rates if deemed necessary.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
11
Understanding GDP Growth: A Key Indicator of Economic HealthIntroduction Gross Domestic Product (GDP) growth is a crucial economic indicator that provides insight into the overall health and performance of a country's economy. As a comprehensive measure of a nation's economic activity, GDP growth reflects the value of all goods and services produced within a country over a specific period. In this article, we will explore the significance of GDP growth, its components, and the impact it has on various aspects of a nation's well-being. Definition and Components of GDP GDP is the total value of all goods and services produced within a country's borders in a given time frame. It is commonly calculated quarterly and annually. There are three main ways to measure GDP: the production approach, the income approach, and the expenditure approach. Each approach provides a unique perspective on economic activity. Production Approach: This method calculates GDP by adding up all the value-added at each stage of production. It includes the value of intermediate goods and services to avoid double counting. Income Approach: GDP can also be measured by summing up all the incomes earned by individuals and businesses within a country, including wages, profits, and taxes minus subsidies. Expenditure Approach: This approach calculates GDP by summing up all the expenditures made in the economy. It includes consumption, investment, government spending, and net exports (exports minus imports). Importance Here are some of the primary reasons why GDP growth is considered important: Economic Health - GDP growth is a fundamental measure of a country's economic health. A positive growth rate indicates that the economy is expanding, producing more goods and services over time. This growth is essential for creating jobs, increasing incomes, and improving overall living standards. Job Creation - A growing economy often leads to increased employment opportunities. As businesses expand to meet rising demand for goods and services, they hire more workers, reducing unemployment rates and contributing to a more robust labor market. Income Generation - GDP growth is linked to the overall income generated within a country. As the economy expands, incomes generally rise, providing individuals and households with more financial resources. This, in turn, contributes to an improvement in the standard of living. Investment Climate - Investors and businesses often use GDP growth as a critical factor in assessing the attractiveness of a country for investment. A growing economy suggests potential opportunities for businesses to thrive, encouraging both domestic and foreign investments. Government Policy - Policymakers use GDP growth data to formulate economic policies. High GDP growth rates may lead to expansionary policies aimed at sustaining economic momentum, while low or negative growth rates may prompt policymakers to adopt measures to stimulate economic activity. Consumer and Business Confidence - Positive GDP growth contributes to increased confidence among consumers and businesses. When people perceive a growing economy, they are more likely to spend money, and businesses are more inclined to invest and expand. International Competitiveness - A country with a strong and growing economy is often viewed as more competitive on the global stage. A robust GDP growth rate enhances a nation's economic influence and can attract international trade and investment. Government Revenues - Higher GDP growth rates can lead to increased tax revenues for the government. This additional income can be used to fund public services, infrastructure projects, and social programs, contributing to the overall development of the nation. Debt Management - Economic growth can help manage a country's debt burden. A growing economy typically generates more revenue, making it easier for the government to service its debt without relying excessively on borrowing. Poverty Reduction - Sustainable GDP growth is often associated with poverty reduction. As the economy expands, opportunities for employment and income generation increase, helping to lift people out of poverty. Conclusion In conclusion, Gross Domestic Product (GDP) growth stands as a cornerstone in understanding and evaluating a nation's economic well-being. Through its comprehensive measurement of all goods and services produced within a country, GDP growth provides valuable insights into economic health, job creation, income generation, and various other facets that collectively contribute to the overall prosperity of a nation. The three approaches to measuring GDP—production, income, and expenditure—offer distinct perspectives, ensuring a holistic understanding of economic activity. The importance of GDP growth cannot be overstated, as it serves as a fundamental gauge of a country's economic trajectory and influences crucial decision-making processes at both the individual and policy levels. The positive correlation between GDP growth and job creation underscores the role of a thriving economy in fostering employment opportunities and contributing to a robust labor market. Additionally, the impact on income generation translates into an improved standard of living for individuals and households, reflecting the tangible benefits of economic expansion. Investors and businesses keenly observe GDP growth as a key indicator when evaluating the potential for investment. Government policymakers, armed with GDP data, craft strategies to either sustain economic momentum or stimulate activity, underscoring the pivotal role GDP growth plays in shaping economic policies. The ripple effects of GDP growth extend to consumer and business confidence, international competitiveness, government revenues, and effective debt management. A growing economy not only instills confidence but also attracts global trade and investment, positioning the nation favorably on the international stage. Perhaps most importantly, sustainable GDP growth is intricately linked to poverty reduction. As the economy expands, opportunities for employment and income generation increase, contributing to the uplifting of individuals and communities from poverty. In essence, the study of GDP growth goes beyond mere economic statistics; it serves as a compass guiding nations towards prosperity, inclusive development, and an improved quality of life for their citizens. Recognizing the multi-dimensional impact of GDP growth enables policymakers, businesses, and individuals to make informed decisions that foster long-term economic well-being and societal advancement.
FRED:GDPEducation
by financialflagship
USD/CAD Toward 1.39 after US Data?The USD/CAD pair has attracted buying interest, maintaining modest gains just below the 1.3700 level. Declining crude oil prices and the strengthening of the US dollar contribute to this dynamic. From a technical perspective, the 50-day Simple Moving Average (SMA) support has been defended, but the lack of sustained support requires caution. A break below the support could lead to deeper losses. Conversely, sustained strength beyond 1.3710 could trigger a short-covering move, but further upward movements may be seen as selling opportunities. The key level of 1.3800 will be crucial; surpassing it will shift the short-term bias in favor of bulls, with the goal of reaching 1.3900, the highest level since May 2020. In fact, on a daily basis, the price is moving in a resistance zone at the 1.37 level, supported by an uptrend channel. My current bias is long since the price is bouncing off the intersection of two daily trendlines. However, before entering, I will wait for US data before the opening of the American market. Subsequently, if my view is supported by the data, I will evaluate and look for a long entry with a target of around 1.39-1.40. Comment and leave a like, greetings from Nicola, the CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
18
GBP/USD. Two Upside Scenarios Today!During Thursday's Asian session, the GBP/USD pair consolidated, oscillating in a narrow range and maintaining spot prices above the 1.2400 level, influenced by the dynamics of the US Dollar (USD). The USD Index (DXY), which tracks the USD against a basket of currencies, struggled to capitalize on the modest recovery from the lowest level since September 1 due to dovish expectations from the Federal Reserve (Fed). Bets increased following the softer US CPI report released on Tuesday, indicating consumer inflation was cooling faster than expected. Moreover, markets are now pricing in a higher probability that the Fed will begin cutting rates in the first half of 2024, keeping US Treasury bond yields low and acting as a headwind for the dollar. However, upside prospects are limited by the growing acceptance that the Bank of England (BoE) may soon start cutting interest rates. The UK Consumer Price Index (CPI) on an annual basis dropped significantly from 6.7% to 4.6% in October, hitting a two-year low. Additionally, Core CPI declined from 6.1% in September to 5.7%. In this mixed fundamental context, aggressive traders should exercise caution before establishing a firm direction in the short term, especially in the absence of relevant macroeconomic data from the UK on Thursday. Meanwhile, the US economic calendar features the usual Weekly Initial Jobless Claims, Philly Fed Manufacturing Index, and Industrial Production figures. These, along with US bond yields and overall risk sentiment, could influence USD price dynamics and offer short-term opportunities in the GBP/USD pair. I have also identified two possible price scenarios: the first anticipates an upward price movement during the London session as we are in an Order Block at the 1.24 level, and the price could retest the supply zone at 1.249. The second scenario suggests a decline to the 0.5% Fibonacci level calculated from the low of 1.207 to the high of 1.251. If it retraces to this Fibonacci level and tests the bullish trendline again, the price could push higher. Comment and leave a like; greetings from Nicola, the CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
16
EUR/USD Pullback before 1.10!The EUR/USD pair holds above 1.0850 but faces resistance below the 1.0900 threshold during the early European trading hours on Wednesday. Weaker-than-expected US inflation data exerts some bearish pressure on the US Dollar (USD) and supports the EUR/USD pair. That being said, the markets anticipate that the Federal Reserve (Fed) has concluded the hiking cycle this year and expects rate cuts in the early second quarter of 2024. The region between 1.0895 and 1.0900 represents an immediate resistance level for the pair. Further north, the next barrier is at 1.0933 (high of August 22). Additional resistance is observed at 1.0947 (high of August 30), with the final destination at 1.102 (a round figure and high of August 11). On the flip side, the initial support level is near the psychological round figure of 1.0800. The next contention level will emerge at the November high of 1.0756, followed by 1.0713 and 1.0672. The market overnight experienced a false breakout of the swing high, which could lead the price to react during the London session, initially gaining liquidity above the Asia high and subsequently pulling back towards the 38% Fibonacci level. Let me know what you think, comment, and leave a like. Happy trading to everyone from Nicola, the CEO of Forex48 Trading Academy.
Short
by Forex48_TradingAcademy
37
GBP/USD Pullback before of 1.27!On Tuesday, the GBP/USD experienced a significant surge following the release of a US inflation report, which increased the likelihood that the Federal Reserve has concluded its interest rate hikes. The US Bureau of Labor Statistics reported a more pronounced decrease in October's inflation than expected, with the Consumer Price Index (CPI) dropping to 3.2% annually from 3.7%, and the core CPI falling from 4.1% to 4%, missing estimates. These data triggered a dollar collapse, with the US Dollar Index falling over 1.40% to 104.13, and the yield on the US 10-year benchmark note dropping to 4.45%, a level last seen in September 2023. In the US, the Producer Price Index, Retail Sales, New York Fed Empire State Manufacturing Index, and Federal Reserve speakers are anticipated. Additionally, I note a price in supply zones in H4 and the break of some swing highs, suggesting a potential pullback before a continued bullish run towards 1.27. Comment and leave a like, greetings from Nicola, the CEO of Forex48 Trading Academy.
Short
by Forex48_TradingAcademy
7
SR3: Trading Opportunities in a Disrupted Treasury MarketCBOT: Three-MO SOFR Futures ( CME:SR31! ) Breaking News: The US Treasury bonds are risk-free No Longer ! Last Friday, top credit ratings agency Moody's lowered its credit outlook on the U.S. to "negative" from "stable", citing large fiscal deficits and a decline in debt affordability. It has so far maintained the AAA credit rating for U.S. sovereign bonds. This move follows a rating downgrade by Fitch, another major ratings agency. On August 1st this year, Fitch cut U.S. credit rating from AAA to AA+, a decision made following months of political brinkmanship around the U.S. debt ceiling. Going back, the S&P was the first credit agency to give Uncle Sam a bad grade. It cut the U.S. credit rating from AAA to AA+ in August 2011 and has maintained it ever since. U.S. credit rating is now lower than that of Australia, Canada, Denmark, Germany, Luxemburg, Netherlands, Norway, Singapore, Sweden, Switzerland, and the European Union. These countries all enjoy AAA ratings from the top-3 major ratings agencies. The risk-free assumption on US Treasury bonds has long been the foundation of the global credit market. It typically measures the riskiness of a debt issue by adding risk premium(s) on top of a risk-free interest rate, which by default is the Fed Funds rate. If the U.S. bonds are no longer deemed risk-free, should we change “the mother of all reference rates” with a new risk-free rate? It would be like cracking the foundation of the Empire State Building and will bring chaos to the $133-trillion global bond market. In my opinion, this Doomsday scenario is very unlikely to occur. ‘A revisit of the following high-profile credit market events helps us understand why. August 2011: the S&P downgraded U.S. credit rating On August 5, 2011, the S&P announced its decision to give its first-ever downgrade to U.S. sovereign debt, lowering the rating by one notch to "AA+", with a negative outlook. S&P was direct in its criticism of the governance and policy-making process, which took the U.S. to the brink of default as part of the 2011 U.S. debt-ceiling crisis. This unprecedented downgrade drew sharp criticism from the Obama administration and the U.S. Congress, but the S&P refused to budge. What did the investors think? • The 10-Year Note with a par value of 100 traded at around 130 before the downgrade. A month later, its price hardly moved. By year end 2011, the 10Y note rose to 132. • The 30-Year Bond was quoted at 136. It reached 145 by year end, up 6.6%. • Following the downgrade, the S&P 500 lost 7.6% in August. But it quickly rebounded. The S&P ended the year at 1,258, up 3.3% from before the downgrade. I rephrase a famous quote to explain what happened: “When the U.S. sneezes, the World catches a cold.” The U.S. downgrade created a bigger chao in global markets. Investors pulled money out of emerging markets, which were considered even riskier. They put money back in the U.S. stocks and bonds, which, ironically, are deemed safer. There has not been any long-term impact from the S&P downgrade, or from its decision to keep U.S. rating at the less-than-perfect rating: • The S&P settled at 4,415 last Friday, up 260% since the downgrade in 2011; • US GDP has grown from $15.6 trillion in 2011 to $25.5 trillion in 2022, up 63%; • In 2011, US national debt totaled $14.8 trillion, a level the S&P considered as “unsustainable”. It has now mushroomed to $33.7 trillion, up 128%. The U.S. government has not defaulted on any debt or missed any interest payment. August 2023: Fitch downgraded U.S. credit rating In a surprise move on August 1st, Fitch downgraded U.S. Treasuries to AA+ from AAA. The U.S. markets were already in decline following the July 25th Fed decision to raise interest rates by 25 bps to 5.25-5.50%. Markets were clearly driven by the Fed, and the Fitch downgrade was merely a footnote. • The 10-Year Note traded at around 112 at the time of the downgrade. It fell as much as 6% to 105. The 10Y note has recovered somewhat to 107 by Monday. • The 30-Year Bond was quoted at 136. It dipped to 108 (-20%) by October, and it’s now quoted at 113, a rebound of nearly 5%. • Following the July rate hike, the S&P 500 has dropped from 4,588 to 4,117, a sharp 10% drawdown. However, it has since staged ten winning streaks, pushing the index back to 4,415, an impressive 300-point rebound (+7.2%). November 2023: Moody’s lowered U.S. credit outlook Last Friday November 10th, Moody's kept U.S. credit rating at AAA, but lowered its outlook to "negative" from "stable", citing large fiscal deficits and a decline in debt affordability. • The 10-Year Note ended the day at 4.646%, a modest gain of 0.016%. • The 30-Year Bond was settled 4.756%, down 0.011%. • The S&P 500 closed at 4,415, up 68 points or +1.6%. The U.S. hardly moved on Monday, as investors waited for the new inflation data. Today, the BLS reports that October CPI was unchanged from previous month, with the annual headline CPI dropping to 3.0%, below market expectations. The S&P pushed up 2% to reach 4,500 in morning trading. There you see how little the impact from a downgrade. Trading with CBOT SOFR Futures In “SOFR: Farewell to LIBOR”, published on July 3rd, I explained that the Securitized Overnight Funding Rate (SOFR) has already replaced the London Interbank Offering Rate (LIBOR) as the leading global credit market benchmark. If you are curious about what this means to you, check out your credit card agreement. You would find that the bank interest rate calculation usually consists of a “prime rate” and a markup, where the prime rate is defined as the sum of SOFR and a fixed rate. CBOT 3-Month SOFR Futures ( FWB:SR3 ) lists 40 quarterly contracts. It shows what the SOFR would be, quarter by quarter, ten years down to road. Based on Friday settlement prices and volume, here is the market consensus on SOFR through the end of 2024: • Current Fed Funds rate: 5.25-5.50% • December 2023 SOFR: 5.415%, volume: 265,153 • March 2024 SOFR: 5.350%, volume: 283,053 • June 2024 SOFR: 5.140%, volume: 324,902 • September 2024 SOFR: 4.880%, volume: 469,238 • December 2024: SOFR: 4.605%, volume: 402,005 SOFR futures are the most liquid futures contracts in the world. On Friday, 2,787,432 lots changed hands. Open interest was 10,655,832 contracts. The contracts showed here each traded over a quarter million lots in a single day. We could assume that market prices reflect best investor consensus on interest rate level at any given time in the future. Here are my observations: • The lead December contract is quoted at 5.415%, in line with the current Fed Funds range of 5.25-5.50%. It dropped to 5.3675% Tuesday after the CPI data. • The September 2024 quote of 4.635% on Tuesday, is 62-87 bps below range, indicating 2-3 rate cuts of 25 bps within the next ten months. • The December 2024 quote of 4.330% is 92-107 bps below range, indicating three to four rate cuts by the end of next year. In my opinion, the Fed decision, the Fed Chair statement and the latest data on payrolls and inflation, sent conflicting signals to the market, creating confusion among investors. Market prices are temporarily dislocated, which may present trading opportunities. The September 2024 quote indicates two or three rate cuts. I think that this assumption is too aggressive. The Fed, in both its statements and the Fed Chair public comments, repeatedly stressed that it never raised the issue of if or when to cut rates. If a trader holds the view that the September SOFR rate shall rise, he could express it with a short position in SOFR futures. The quoting convention of SOFR future is 100-R, where R is the effective interest rate. If the rate goes up, futures price will go down. SOFR contracts have a notional value of $2,500 x contract-grade IMM Index. Each 1 basis-point move would result in a gain or loss of $25 per contract. The minimum margins are $850 for the September contract. Hypothetically, if the trader is correct and the rates turn out to be 25 bps high, he would have a theoretical return of $625 per contract (= 25 X 25). The trader would lose money if the Fed cut rates faster than anticipated. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CME:SR3Z2023Short
by JimHuangChicago
USD/CAD Ready for Reversal Towards 1.37.The USD/CAD rate is hovering around 1.3820 during the early European session on Tuesday, with buying interest, followed by the immediate resistance region around 1.3850, in line with the previous week's high at the 1.3854 level. The Moving Average Convergence Divergence line is situated above the centerline but shows convergence below the signal line, suggesting a potential shift in momentum towards bearish sentiment in the USD/CAD pair. Market participants are adopting a cautious stance ahead of U.S. inflation data; figures higher than expected could strengthen the U.S. Dollar (USD), and consequently, the USD/CAD pair may revisit the yearly high at the 1.3898 level. On the downside, the USD/CAD could find key support around the psychological level at 1.3800, followed by the 14-day Exponential Moving Average (EMA) at 1.3778. A decisive break below the latter could force the USD/CAD pair to navigate the region around the 23.6% Fibonacci retracement level at 1.3706, aligned with the significant level of 1.3700. It will be interesting to see the market's reaction to the dollar data in an hour. The market is in an uptrend channel and appears to have bounced off a daily supply zone. Stay tuned with us to follow developments. Happy trading to everyone from Nicola, the CEO of Forex48 Trading Academy.
Short
by Forex48_TradingAcademy
9
EUR/USD Bullish Channel Towards 1.10!Current Trading Range: The EUR/USD pair is trading within a narrow range of 1.0695–1.0755 during the early European session on Tuesday. Market Sentiment: Traders are cautious and waiting on the sidelines ahead of crucial economic data releases from both the Eurozone and the US. These data releases are expected to bring volatility to the market. Recent Movement: The EUR/USD has experienced a two-day uptrend, holding above the 20-day and 55-day Simple Moving Averages (SMA). Technical indicators on the daily chart suggest a modest bullish bias. Key Level to Watch: A daily close below 1.0615 could negate the positive outlook, indicating a potential shift in market sentiment. 4-Hour Chart Analysis: On the 4-hour chart, the pair is testing a short-term downward trendline around 1.0705, with support at 1.0655. A break above 1.0710 could lead to further strength, targeting 1.0735 and 1.0760. Conversely, a break below 1.0650 may trigger a bearish move towards 1.0635 and 1.0610. Previous Day's Movement: The EUR/USD rose on the previous day, finding support around 1.0560, driven by a weaker US Dollar and a decline in US yields. Market Focus: Attention is now on upcoming economic data releases, particularly the US Consumer Price Index (CPI) report scheduled for the next day. This report is anticipated to have significant implications for the market. US Dollar and Risk Sentiment: The US Dollar weakened during the American session, influenced by a pullback in US yields and increased risk appetite. Positive equity and commodity prices contributed to this sentiment. Potential Market Impact: The direction of the EUR/USD pair may be influenced by the outcome of the US CPI report. A higher-than-expected inflation rate could strengthen the US Dollar, while a softer reading could lead to a weaker dollar. Eurozone Data Releases: Eurostat is set to release employment and growth data from the third quarter, with an expected contraction of 0.1%. Additionally, ZEW survey results are also awaited.
Long
by Forex48_TradingAcademy
8
GBP/USD up at 1.25!The GBP/USD is hovering around 1.2250 on a quiet Monday. The pair printed a fresh daily high at 1.2259 on the back of Dollar weakness. Attention shifts toward UK employment figures and the critical US CPI data due on Tuesday. The GBP/USD gained momentum and pushed towards 1.2250 in the European session on Monday after spending the Asian session fluctuating in a tight channel slightly above 1.2200. The pair's near-term technical outlook suggests that sellers remain reluctant to bet on persistent Pound Sterling weakness. British Prime Minister Rishi Sunak sacked Home Secretary Suella Braverman Monday morning to begin his reshuffle of the cabinet. James Cleverly got appointed as the new Home Secretary, and Sunak named former Prime Minister David Cameron as the new Foreign Secretary. On Tuesday, the UK's Office for National Statistics will release the jobs report, which will include wage inflation figures for October. Later in the day, October Consumer Price Index data from the US will be watched closely by market participants. Despite Federal Reserve (Fed) Chairman Jerome Powell's hawkish comments last week, markets are still pricing in a more than 80% probability that the Fed will leave the policy rate unchanged in December. The price has started moving after the rebound on the trendline intersection. The market could break the supply zone just above and then retest it before moving upwards. Leave a like and comment to support our work, greetings from Nicola, the CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
5
XAUUSD Finally the price is ready to go up!The price of gold (XAU/USD) has dropped to approximately $1,940 and faces further decline due to several challenges. Factors include the absence of significant tensions in the Middle East, hawkish statements from Federal Reserve Chair Jerome Powell, and uncertainty preceding the release of the US Consumer Price Index (CPI) data for October on Tuesday. Investors are closely monitoring the upcoming US inflation data, which is expected to provide insights into the Federal Reserve's monetary policy for its final 2023 meeting in December. Despite the potential for persistent inflation data leading to a December interest rate hike, markets generally anticipate the Fed to maintain unchanged rates. Jerome Powell and colleagues emphasized an ongoing commitment to curbing inflation, with Powell expressing uncertainty about the current interest rates' adequacy. St. Louis Fed interim President Kathleen O'Neill Paese supported Powell's stance, cautioning against ruling out further rate hikes. The subdued appeal for gold is also attributed to the lack of a significant escalation in the Israel-Palestine conflict. The US Dollar Index (DXY) faces pressure, and there's anticipation that the Fed might initiate a rate-cutting cycle in mid-2024, as projected by economists at Morgan Stanley. Technical analysis indicates that the gold price is declining toward $1,930, with near-term demand impacted by various challenges, and the correction extending close to the 50-day Exponential Moving Average (EMA) at $1,940. The next support level is expected near the 200-day EMA at approximately $1,915.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
5
USD/JPY Liquidity Take Before 145!The USD/JPY exchange rate is trading in positive territory for the sixth consecutive day during Monday's Asian trading hours. The exchange rate's growth is supported by higher yields on US Treasury bonds and hawkish comments from Federal Reserve (Fed) Chairman Jerome Powell. Currently, the exchange rate is around 151.70, gaining 0.10% for the day. USD/JPY continues its winning streak for the fifth consecutive day, trading higher around 151.40 during the early European session on Friday. Unexpectedly hawkish comments from Fed Chairman Jerome Powell had a significant impact, boosting yields on US Treasury bonds and strengthening the US dollar (USD) against the Japanese yen (JPY). However, Japanese authorities may consider intervention to curb the advance of the USD/JPY exchange rate in response to these developments. Powell's statement at the International Monetary Fund (IMF) event on Thursday expressed concern that current policies may not be sufficient to curb inflation. Nevertheless, the Japanese yen continues to face pressure as plans to exit accommodative policy may be delayed due to lower wage growth. Decent wage growth is considered a crucial factor for the Japanese central bank to contemplate an exit from prolonged accommodative monetary policy. The market has reached the October 2022 high, and in this area, after breaking an uptrend channel on the daily chart, the market could experience a false breakout of highs, leading to a sharp decline towards 145. Let me know what you think, regards from Nicola, the CEO of Forex48 Trading Academy.
Short
by Forex48_TradingAcademy
9
EUR/USD: Stalemate with Two Scenarios!The EUR/USD pair starts the week with a positive outlook in the early hours of Monday's Asian trading. The pair's rebound is supported by the consolidating stance of the US Dollar. Bouncing from last week's low of 1.0656, the pair remains capped below the 1.0700 threshold. The Relative Strength Index (RSI) on the 4-hour chart has retraced below the 50 levels, while EUR/USD has fallen below the mid-point of the ascending regression channel, indicating a bearish short-term outlook. If EUR/USD fails to stabilize above 1.0680 (the mid-point of the ascending channel), sellers may remain interested. In this scenario, the 50-period Simple Moving Average (SMA) acts as temporary support at 1.0660 before 1.0640 (Fibonacci 38.2% retracement level of the latest downtrend) and 1.0620 (lower limit of the ascending channel, 100-period SMA). EUR/USD came under bearish pressure and declined below 1.0700 in the late American session on Thursday. The pair remains relatively quiet Friday morning, while technical analysis indicates a slight bearish bias. Participating in a monetary policy panel organized by the International Monetary Fund on Thursday, Federal Reserve Chairman Jerome Powell reiterated the data-dependent approach. "We are making decisions meeting by meeting, based on the totality of the incoming data and their implications for the outlook for economic activity and inflation," Powell stated. However, Powell noted they are not confident that they have achieved a 'sufficiently restrictive' policy stance to bring inflation down to 2% over time. This comment provided a boost to the US Dollar (USD) and caused a decline in EUR/USD. The Euro Stoxx 50 Index opened in negative territory on Friday, reflecting a cautious market stance. Meanwhile, US stock index futures were last seen rising between 0.1% and 0.3%. In case Wall Street's main indexes rebound following Thursday's decline, the USD could struggle to continue to outperform its rivals. On the other hand, a negative shift in risk sentiment could weigh on EUR/USD ahead of the weekend. In fact, the market is in a stalemate between a demand zone and a supply zone. I expect either a pullback towards 1.062, where we have a demand zone at the Fibonacci level of 0.62 before a long restart, or a further upward move towards 1.074 with a subsequent fall on the rebound due to pressure from the sell order block. Let me know what you think, happy trading to everyone from Nicola, the CEO of Forex48 Trading Academy.
Short
by Forex48_TradingAcademy
6
GBP/USD retraces to 1.18 on a bearish channel.This passage provides a comprehensive overview of the GBP/USD currency pair's recent performance, along with relevant economic indicators and factors influencing the market. Let's break down the key points: GDP Data from the UK: The UK's Gross Domestic Product (GDP) expanded at an annual rate of 0.6% in Q3, surpassing expectations. Despite this positive data, GBP/USD continued to decline. Technical Analysis: Various technical indicators, including an ascending trend line, Fibonacci retracement levels, and Simple Moving Averages (SMA), are mentioned to highlight key support and resistance levels. Strong support is identified at 1.2200, with additional levels at 1.2140 and 1.2100 if the pair falls below the support. On the upside, resistance levels are noted at 1.2250, 1.2275, and 1.2300. Current GBP/USD Situation: GBP/USD struggled to rebound, trading slightly above 1.2200 after four consecutive days of negative performance. Additional UK Economic Data: Industrial Production stagnated, Manufacturing Production increased slightly, and Total Business Investment declined in the third quarter. However, these mixed macroeconomic data did not significantly impact GBP/USD. US Dollar Strength: The US Dollar strengthened against other currencies following comments from Federal Reserve Chairman Jerome Powell. Powell expressed uncertainty about achieving a sufficiently restrictive stance to bring inflation down to the 2% target. Market Expectations: The CME Group FedWatch Tool indicates a 90% chance that the Federal Reserve will maintain its current policy. If other policymakers adopt a similar tone, the USD could strengthen further. Market Sentiment: US stock index futures show little change on the day, and a positive shift in risk sentiment could limit USD gains in the American session. This information provides a comprehensive picture of the factors influencing the GBP/USD pair, combining technical analysis, economic indicators, and central bank statements to give readers a broader context for understanding the currency pair's movements.
Short
by Forex48_TradingAcademy
4
SP500 Pullback Coming Before 5000!Closing on November 10: The SP500 index recorded a brilliant rise, gaining 1.56%. The opening occurred at 4,364.1 points, below the highs of the previous session. Throughout the day, the quotes strengthened, closing at 4,415.2 points, near the session highs. Status and Trend Analysis: Short-term trend: Signs of strengthening with immediate resistance at 4,439. Key levels: Resistance 2: 4,507 Resistance 1: 4,439 Support 1: 4,375 Support 2: 4,326 Bullish strength: Supported by the upward crossover of the 5-day moving average over the 35-day moving average. Technical implications: Indicate a possible continuation of the bullish phase towards the level of 4,507. Additional Information: The analysis suggests that the index shows bullish strength, supported by technical indicators. The next resistance could be tested at 4,439, with prospects for further increase towards 4,507. However, it is essential to monitor support levels to understand the stability of the current trend. Personally, I expect an upward movement to the level of 4450, where the price may feel the physiological pressure of the 0.79% Fibonacci level and experience a pullback with a subsequent descent into the order block area before resuming or continuing to decline towards the retracement of the bearish trendline. Greetings from Nicola, the CEO of Forex48 Trading Academy.
CME_MINI:ES1!Short
by Forex48_TradingAcademy
3
Strong Surge in the US Technology Index and Growth ProspectsThe USA technology stocks index has experienced a significant increase, closing the session with a gain exceeding 2.25% compared to previous values. The day started with determination, opening at 15,252.4 points, slightly below the highs of the previous session. Throughout the day, quotations strengthened, culminating in a closing upswing at 15,529.1, near session highs. Analyzing the short-term technical picture of the Nasdaq 100, there is an upward acceleration of the curve with a target set at 15,653.9. There is a risk of a descent to 15,279.7, but this temporary correction should not compromise the solidity of the current trend. The outlook points to an extension of the bullish trend, with a target of 16,028. Farewell and have a great weekend from Nicola, the CEO of Forex48 Trading Academy
CME_MINI:NQ1!Long
by Forex48_TradingAcademy
4