Get started

Fed

Euro climbs to two-week high as ECB meeting loomsThe euro has extended its gains in Thursday trading. In the European session, EUR/USD is trading at 1.0925, up 0.45%. It has been a good week for the euro, which has climbed 1.5% against the US dollar. The European Central Bank meets later on Wednesday and is widely expected to hold rates at 4.0% for a second straight time. The markets will be focusing on the rate statement and ECB President Lagarde's post-meeting remarks. Lagarde has been hawkish, stressing the need to maintain rates in restrictive territory for a prolonged period - "higher for longer". The markets are more dovish and have priced in six rate cuts for 2024, with a first cut as early as the spring. The economic landscape in the eurozone could support the market's view. Inflation has fallen sharply and is at 2.4%, within striking distance of the Bank's 2% target. The economy has cooled due to high interest rates and a recession remains a possibility. Will Lagarde push back against market expectations of rate cuts? Or will she set a more dovish stance and avoid ruling out rate cuts? The tone of the rate statement and Lagarde's comments could have a strong effect on the movement of the euro today. The Federal Reserve maintained the benchmark rate at a target range of 5.25%- 5.50% for a third straight time. That was not a surprise but Fed Chair Powell provided plenty of drama as he pivoted from his usual hawkish rhetoric. There had been expectations that Powell would push back against growing speculation that the Fed would trim rates in 2024. Powell not only failed to push back, he signalled that the Fed expected to cut rates three times next year. Powell's dovish message sent equities flying higher and the US dollar tumbling. Just two weeks ago, Powell said it would be "premature" to speculate about the timing of rate cuts and that the door was still open to further hikes. There is still a deep disconnect between the markets and the Fed, as the markets have now priced in six rate cuts in 2024. There is resistance at 1.0964 and 1.1033 1.0862 and 1.0793 are providing support
by OANDA
6
Get ready for the FOMC and Jerome PowellWith the SPX trading just about 3.8% from its all-time highs, all eyes will be on the Federal Reserve, which is scheduled to announce a monetary decision later today, followed by a press conference. We do not anticipate any change to the FED Funds Rate as we expect the central bank to take additional time in order to assess the lagging effects of previous rate hikes. During the press conference, we expect Jerome Powell to outline a surprisingly strong labor market and resilient parts of the economy in spite of rising living costs and debt servicing. In some remarks, the chairman will likely admit that a great deal of a job has already been done, but there is still more to do, with inflation being far from the 2% target. Overall, the conference’s tone will likely be carried in the well-known fashion of “higher for longer” and lack of clarity on steps toward easing. We will provide a review of what was said after the conference. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
SP:SPX
by Tradersweekly
1
How long will gold hold above $2000? The Federal Reserve kept its interest rate as 5.25%-5.5% for its December 2023 decision (staying unchanged for a third consecutive meeting). This was in line with expectations, but the big news is that they indicated 75bps cuts in 2024. This revelation has weakened the USD across the board with the Aussie dollar the best performer at +1.3%. GBP/USD and EUR/USD also caught fresh bids and jumped above 1.2598 and 1.0850, respectively (BoE and ECB interest rates decision hit the market in less than a day). Gold has also been boosted and rebounded to test the $2,000 mark just now. But how long will this last? Jerome Powells public address will likely be the reason gold does or does not stick to this price level in the short term. He's talking right now!
BLACKBULL:XAUUSD
by BlackBull_Markets
A Holly Jolly Inflation OutlookLast Friday's University of Michigan Survey of Consumers revealed some surprising bullish trends as we head into the heart of the holiday season. November’s 69.4 sentiment score, the highest since August, was a massive jump from 61.3 in October, making a positive change in how consumers feel about the state of the economy. Within the report, though, is what really raised eyebrows on trading desks to wrap up last week. My chart of the week is UMich 1-year inflation expectations. At 3.1%, it was the softest outlook for inflation since March 2021 and the biggest monthly drop since 2001. The stunning reversal comes amid rapidly falling gasoline prices. Bigger picture, the 5-year inflation outlook also came in tame at just 2.8%, tying for the lowest figure since July 2021. It’s all music to the Fed’s ears ahead of this week’s key December FOMC meeting. Bond traders widely expect no change in the policy rate, but households’ collective outlook for lower inflation means they could be less aggressive in asking for significant wage increases in the new year, thus squashing the chance of a wage-price inflation spiral to take place in the coming quarters. What does it mean for investors? It is yet another sign that inflation should continue its downward trajectory. Headline CPI is seen printing 0.0% for November, following October’s goose egg, while core prices are forecast to have risen by 0.3% last month. I assert this good news should help get the usually bullish back half of the December period off to a strong start, and the Santa Claus Rally period (the last five trading days of the year followed by the first two sessions of the new year) appear on track for gains.
ECONOMICS:USMIE1YLong
by mikezaccardi
GBP/USD - Pound edges higher ahead of UK job dataThe British pound is showing little movement at the start of the week. In Monday's European session, GBP/USD is trading at 1.2576, up 0.22%. It's a busy week for UK releases which could translate into volatility from the British pound. The UK releases employment data on Tuesday, GDP on Wednesday, followed by the Bank of England rate decision on Thursday. The UK employment report will be closely watched by the BoE, which is expected to hold the cash rate at 5.25% for a third straight time. The UK labour market has remained strong despite the BoE's aggressive tightening and high wage growth continues to drive inflation. The unemployment rate is expected to tick higher from 4.2% to 4.3% while wages including bonuses are expected to ease to 7.7%, down from 7.9%. BoE Governor Bailey had a hawkish message for the markets last week, saying that interest rates could remain at current levels for "an extended period" in order to bring inflation back down to the 2% target. Inflation has been falling sharply, but the current clip of 4.9% remains much higher than the target and the BoE doesn't want to encourage talk of a rate hike, which could ease financial conditions and push inflation higher. The markets, however, have priced in rate cuts in mid-2024. Friday's US nonfarm payrolls came in at 199 thousand in November, above the market consensus of 180,000 and higher than the October gain of 150,000. Unemployment dropped from 3.9% to 3.7% and average hourly earnings rose to 0.4% m/m, up from 0.2% in October and above the market consensus of 0.3%. The strong data points to a resilient labour market despite signs that the economy is cooling down, and has reduced fears of recession. The markets are still expecting four or five rate cuts in 2024, pointing to a deep disconnect with the Fed, which is insisting that hikes remain on the table. The strong nonfarm payroll report is a reminder to the markets that the US labour market remains strong, even if there are clear signs that the economy is cooling down. Tuesday's inflation report will be closely watched, as a stronger-than-expected reading would likely force the markets to temper expectations about rate hikes in 2024. GBP/USD is putting pressure on resistance at 1.2592, followed by 1.2682 1.2484 and 1.2369 are the next support levels
by OANDA
Trading this week's fundamental events The market's attention will be fixed on the Federal Reserve's final policy meeting of 2023 scheduled for this Wednesday, with the expectation that the US will maintain interest rates at a 22-year high. Investors will have an opportunity to scrutinize the Fed's statement and Chair Jerome Powell's press conference for any indications of potential rate cuts in 2024 (or lack thereof). One day prior to the Feds decision, the US is also poised to unveil essential inflation data. Forecasts suggest a marginal uptick of 0.1% in November consumer prices. Turning attention to Europe, traders will focus on rate decisions from the European Central Bank (ECB) and the Bank of England (BoE), both occurring on Thursday. The BoE is predicted to maintain borrowing costs at a 15-year high while reiterating the necessity for elevated rates. Any commentary from the bank deviating from this outlook could potentially cause ripples in the market. Eurozone inflation dropped to 2.4% last month, down from over 10% a year earlier, following ten consecutive rate hikes. This decline brings the ECB's 2% inflation target into view and makes a further rate increase unlikely. Goldman Sachs has forecasted that the European Central Bank's meeting in April will mark the initiation of its first rate cut, followed by a 25 basis points cut at each subsequent meeting throughout the year.
by BlackBull_Markets
Gold struggles to gather momentum following rebound to $2,040Gold advanced to the $2,040 area in the second half of the day on Thursday but lost its momentum. Despite the renewed USD weakness, rising US yields limit XAU/USD's upside as market focus shifts to Friday's November jobs report. Gold price (XAU/USD) attracts some buying for the second straight day on Thursday, albeit lacks follow-through and remains confined in a familiar range held over the past three days through the first half of the European session. The fundamental backdrop, meanwhile, seems tilted firmly in favour of bullish traders amid growing acceptance that the Federal Reserve (Fed) is done with its policy tightening campaign and will start cutting rates as early as March 2024. Furthermore, the recent dovish rhetoric from European Central Bank (ECB) officials, along with the Reserve Bank of Australia’s (RBA) and the Bank of Canada's (BoC) decision to hold rates steady, lifted hopes that interest rates have peaked globally. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal. Meanwhile, a strong pickup in demand for the Japanese Yen (JPY) demand, bolstered by expectations for a hawkish pivot by the Bank of Japan (BoJ), prompts some profit-taking around the US Dollar (USD). In fact, the USD Index, which tracks the Greenback against a basket of currencies, corrects sharply from a two-week high touched on Wednesday and turns out to be another factor lending support to the US Dollar-denominated commodity. Apart from this, the prevalent cautious market modo turns out to be another factor contributing to the modest intraday uptick. Bulls, however, seem reluctant and prefer to wait for the release of the US monthly jobs data on Friday.
OANDA:XAUUSDLong
by dc_analytics
GC: Gold Reaches Record High on Hope of Fed Rate CutsCOMEX: Gold Options ( COMEX:GC1! ) Gold prices rallied to an all-time high on Friday. Spot gold climbed 1.6% to $2,069 per ounce, up 3.4% for the week. Gold price rose to $2,075 mid-session to beat the previous record of $2,072 reached in 2020. U.S. gold futures also broke new ground. The February 2024 contract of COMEX gold futures settled at a record high of $2,089.7, up 1.6% for the week. On Friday, gold futures trade volume was 259,889 lots, with open interest standing at 498,685 contracts. Options on the COMEX gold futures also attracted investor attention. On Friday, total options volume was 92,906, up 112% from the prior day. Open interest was 806,297 lots. For the lead February 2024 contracts, investors bought 19,565 call options and 6,894 put options. A call-to-put ratio of 2.83:1 indicates that investors are very bullish on gold. Gold prices have been pumped up on investor hype that the Federal Reserve may have completed its monetary tightening policy and could start cutting rates as early as March. How high could gold price go? Since last year, I have written extensively about gold on TradingView. Let’s revisit the fundamental drivers of the global gold market. Gold as an Inflation Hedge Gold has historically been an excellent hedge against inflation because its price tends to rise when the cost-of-living increases. The US CPI Index has a base value of 100 set at 1982-1984. Its latest reading in October is 307.7. Over the last 40 years, the cost of US goods and services has tripled on average. The year-end gold price between 1982 and 1984 averaged $378. As of Friday, the bullion gained 447% for the same period. Over the long run, investing in gold does beat inflation. Gold as a Precious Metal As a commodity, gold is negatively correlated to the US dollar. Since gold is priced in dollar, a strong dollar raises the cost for foreign investors who must pay more with weakened foreign currency. This reduces the demand for gold. “Strong Dollar, Weak Commodities” is the general theme in global commodities market, gold included. A closely related theme is “Higher Rates, Lower Prices”. Higher interest rates and Treasury bond yields raise the opportunity cost of holding non-yielding gold. Unlike other commodities, gold is not consumed or used up every year. Therefore, gold mining output is not a major factor in the pricing of gold. Gold as a Safe Haven Investment Gold retains its value in times of both financial chaos and geopolitical crises. People flee to its relative safety when world tensions rise. During such times, gold often outperforms other investments. In the past two decades, gold price peaked during the 2008 financial crisis, the 2010 European debt crisis, the 2018-19 US-China trade conflict, the outbreak of COVID pandemic, the Russia-Ukraine conflict, and the March 2023 U.S. bank run. Gold as an Investment Class As an investment class, gold competes for investor money along with stocks, bonds, cryptos and money-market funds. Even at record high, gold gained only 13.2% year-to-date, underperforming S&P 500 (+19.6%), Nasdaq 100 (+46.4%) and Bitcoin (+136.0%). A False Narrative on Monetary Easing The recent rise in the stocks and gold is largely shaped by the changes in market sentiment. Investors believe that the Fed is shifting gears from restricted to easing policy. Looking back in the past two years, market sentiment might not be the most reliable gauge of the Fed’s next step of action. The market has called for the Fed Pivot prematurely and incorrectly multiple times. We will need to wait and see what’s happening next. In his speech at Spelman College in Atlanta on Friday, the Fed Chair said that “the risks of under- and over-tightening are becoming more balanced,” but the Fed is not thinking about lowering rates right now. Investors focus on the current rate well into restrictive territory, but pointedly ignore the warning that it was premature to speculate on easing rates. The confirmation bias is at work here. They hear what they want to hear and create a new narrative that rate cuts will come sooner. Pricing in 5-6 rate cuts in a year is very aggressive. The Fed Chair has been accused of being too late to act, seeing inflation transitory earlier on. When it comes to cutting rates, the Fed would be very cautious, and at a very slow and measured pace. Trading Opportunities with Gold Options Market fundamentals haven’t changed. Market sentiment, however, has shifted. The aggressive rate-cut assumption has the effect of lowering the expected interest rates. This helps raise the present value of future cash flows. Hence, stock value goes up. Lower bond yield reduces the disadvantage of holding the non-yielding gold, and the US dollar weakening makes gold more attractive to foreign buyers. This bull market is vulnerable. If investors adjust their rate-cut assumptions from 5-6 to 2-3 times, the market could turn nosediving. However, investors set their sight on rate cuts and will not abandon it until the fact rejects the false narrative. Gold has a so-called “Santa Claus rally” and could continue for a while. The Fed Chair’s statement could become more convincing if: • Nonfarm payroll stays strong (December 8th) • CPI stops falling (December 12th) • The Fed keeps rate unchanged and emphasizes on fighting inflation (December 13th) Options on COMEX Gold Futures (GC) could be a cost-efficient and risk-mitigated way to express one’s opinion on how quickly the Fed would cut rates. Each options contract is based on 1 futures contract and has a notional value of 100 troy ounces of gold. At $2,089.7, each contract is worth $208,970. For illustration purpose: For the February 2024 contract, an out-of-the-money (OTM) call at 2190 ($100 above futures price) is quoted at 18.80. To acquire 1 call options requires an upfront premium of $1,880 (= 18.80 x 100 ounces). An OTM put at 1990 ($100 below futures price) is quoted at 9.00. To acquire 1 put requires an upfront premium of $900 (= 9.00 x 100 ounces). Options premium is significantly lower than futures margin, which stands at $7,800 per contract. It’s a fraction of the cost if you were to buy 100 ounces of gold in the spot market. If the trader buys a call and gold futures goes up, his account will increase in value. Unlike investing in spot gold or gold futures, the payoff in options is nonlinear, determining by the Black-Scholes option model. Similarly, when the trader buys a put and gold futures declines, he would also make a profit. On the flip side, the trader could lose money if the market moves against him. But the maximum loss is capped at the upfront premium. 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
COMEX:GC1!
by JimHuangChicago
7
GBPUSD Short Trend at 1.27 before Bailey speech!The GBP/USD pair continued to experience gains during the American session, reaching a new monthly high at 1.2715 before a modest retracement. The British Pound maintains its strength against the US Dollar, with the GBP/USD comfortably trading above the 1.2600 level after touching Monday's peak at 1.2644, the highest since last August. The Governor of the Bank of England (BoE), Andrew Bailey, stated on Monday that achieving the 2% inflation target would be a challenging task. Despite the central bank raising rates to 5.25% between 2022 and 2023, Bailey acknowledged the negative impact higher rates can have on households but added that it is still too early to consider rate cuts. Inflation in the UK, measured by the Consumer Price Index (CPI), was 4.6% year-on-year in October, more than double the central bank's comfort level. From a data perspective, the UK's macroeconomic agenda is relatively light this week. The country released the October Retail Price Index (BRC), which showed a 4.3% year-on-year increase, an improvement from the previous month's 5.2%. From a technical standpoint, the market exhibits a strong upward trend after breaking out of the bullish channel, and personally, I anticipate a pullback towards 1.2530 before further upward movement with the goal of surpassing the supply zone at 1.2970 and subsequently retesting the upper part of the daily supply zone. Wishing everyone successful trading, greetings from Gaia.
Short
by UnknownUnicorn67331274
5
EUR/USD drops ahead of eurozone CPIThe euro is in negative territory in Thursday trade. In the European session, EUR/USD is trading at 1.0940, down 0.27%. Germany's inflation rate declined sharply in November and the eurozone is up next, with the November inflation report later today. German inflation dropped to 3.2% y/y in November, down from 3.8% in October and below expectations. This was the lowest inflation rate since June 2021 and was driven by lower food and energy inflation. Will eurozone inflation follow suit? The markets are expecting a modest decline for November. Headline inflation is expected to fall to 2.7%, down from 2.9% in October, and the core is expected to ease to 3.9%, down from 4.2% in October. If inflation falls modestly as expected, it is unlikely to cause the ECB to reconsider its rate policy. The markets have priced in a rate cut in May 2024 and a softer-than-expected print would likely result in the odds of a rate cut being brought forward. The ECB has signalled a 'higher for longer policy', as have the Federal Reserve and other major central banks. Even though inflation has been dropping, it remains considerably higher than the ECB's 2% target and the central bank hasn't given any indications of a rate cut. Investors will be looking for hints about rate policy from ECB President Christine Lagarde, who will speak today at an ECB forum in Frankfurt after the eurozone inflation release. In the US, second-estimate GDP for the third quarter was revised to 5.2%, up from the initial estimate of 4.9%. The strong reading should ease fears of a recession but also provides the Fed with little reason to trim rates while inflation remains well above the 2% target. The Fed has signalled a 'higher for longer' stance on rates but the markets are more dovish and have priced in a rate hike in March 2024 at 45%, according to the CME's FedWatch tool. EUR/USD is putting pressure on support at 1.0920. Below, there is support at 1.0873 1.0986 and 1.1033 are the next resistance lines
by OANDA
EURUSD Ready for the big short towards 1.089The EUR/USD experienced a decline after four consecutive days of gains, stabilizing just below 1.1000, while the US Dollar seeks to recover. On Thursday, Eurozone inflation data could disappoint expectations downward, while the US will release the core PCE index and weekly jobless claims. A daily close well above 1.1010 could pave the way for further gains. A decisive break below 1.0960 would indicate further losses, with the next support at 1.0920, near an upward trendline. Key resistance is at 1.1000, while additional recent highs could lead to resistance at 1.1070. The inflation situation in Europe indicates a slowdown, with German and Spanish data falling below expectations. Overall, the positive trend of the ECB may be influenced by additional inflation data. The US economy showed stronger growth in the third quarter than previously estimated, bolstering the Dollar. On Thursday, US data on Core Personal Consumption Expenditures (PCE) and weekly jobless claims could further influence the Dollar, especially if they highlight further slowing of inflation and the labor marke
Short
by UnknownUnicorn67331274
3
XAUUSD Is it time to go down? Target 2026!Gold Trend: The price of gold appears to be in an upward phase, testing $2,050 per troy ounce. This could be influenced by various factors, including expectations regarding inflation, the strength of the dollar, and the monetary policy of the Federal Reserve. Role of the Dollar: Although the US dollar is showing signs of recovery, it remains generally weak. Hopes for an end to the tightening cycle by the Federal Reserve may be one of the factors contributing to this weakness. Federal Reserve Position: Statements from some regional bank presidents of the Federal Reserve indicate a divergence of opinions regarding the future path of monetary policy. While some are confident that inflation will remain under control, others are more cautious and do not rule out further interest rate hikes. Government Bond Yields: Yields on US government bonds are declining, indicating some caution or concern about the economy. The recent lows in yields may reflect a growing focus on safe-haven assets such as gold. Upcoming Key Events: Investors seem to be awaiting US inflation data, particularly the October Core Personal Consumption Expenditures (PCE) Price Index. A further decrease in inflationary pressure could positively impact the market and pose a threat to the demand for dollars.
OANDA:XAUUSDShort
by UnknownUnicorn67331274
1
GOLD 2 SCENARIOSDear Traders, "There are currently two potential scenarios unfolding for XAUUSD (Gold paired against the US Dollar). The first scenario involves a bullish trajectory where XAUUSD is poised to surpass the highest resistance point ever witnessed in the gold market. This would signify a significant breakthrough, potentially leading to a historic milestone for gold prices. On the flip side, the second scenario considers the possibility of a retracement in price movement. This scenario draws from historical trends, notably three previous instances where XAUUSD retraced after approaching similar highs. Understanding these past occurrences suggests a potential pattern of retracement following a surge toward this critical resistance level. Both scenarios hold significance and warrant careful observation. Traders and investors are keenly monitoring market movements to decipher which direction XAUUSD will ultimately take. The breakthrough of the highest resistance point could signal a substantial bullish trend, whereas a retracement would echo previous market behaviors, potentially offering insights into future price movements. As always, market analysis remains dynamic and subject to various factors. Traders must diligently assess the evolving market conditions and indicators to make informed decisions based on these two probable scenarios for XAUUSD." Greetings, ZTRADES
FOREXCOM:XAUUSDLong
by ZILATRADES
Gold approaching 2000 ahead of GDP!The price of gold (XAU/USD) struggles to capitalize on intraday gains, hovering around the $2,052 level and retracing from a peak touched last Wednesday, near seven months ago. Despite a modest rebound in the US dollar and a positive risk tone, the precious metal remains in positive territory for the fifth consecutive day. The Federal Reserve officials' recent less hawkish statements confirm the market's bets on monetary policy tightening starting from March 2024. The disappointing auction of US Treasury bonds has lowered yields, providing support for gold. Attention is now focused on the preliminary US GDP report and the core PCE price index, which will influence Fed policy expectations and guide the direction of the dollar and gold.
Short
by UnknownUnicorn67331274
1
USOIL: Bearish channel with a consolidation phase before $70!The prices of oil appear very negative as they record losses for the fourth consecutive day. Markets are selling crude oil futures contracts due to the current division within OPEC+ on how to proceed, with the prospect of a lack of severe measures to support oil prices. The postponement of the OPEC+ meeting to a virtual mode on Thursday highlights a deep division within the organization, signaling an unfavorable situation for oil prices, which require a united front to maintain current levels. In addition to Thursday's OPEC+ meeting, the COP28 meeting will begin in Dubai. Several market participants have expressed their forecasts on OPEC+'s decisions. The consensus is that even if OPEC+ extends the current production cuts, it is unlikely to lead to a strong rally. Oil prices are poised for further declines as there are no measures in place against the considered bearish factors. On a daily basis, the price has been inside a bearish channel for days and continues to descend. Currently, it is positioned between a supply and demand zone very close to each other, which could create a period of stagnation or consolidation. The sentiment remains bearish, and personally, I expect the price to head towards the $70.00 per barrel area. Greetings from Gaia, wishing everyone a good trading day.
TVC:USOILShort
by UnknownUnicorn67331274
3
EURUSD Bullish channel with a breakout above 1.0950!During Monday's Asian session, the EUR/USD pair experienced modest declines, primarily due to renewed demand for US dollars. The rise of the EUR seems constrained due to current macroeconomic prospects. Currently, the pair is trading near 1.0935, with a 0.08% loss for the day. Economic data from Germany indicates an improvement in the German IFO business climate index in November, but this appears to have little significant impact on the euro's performance. A moderate expansion in private sector economic activity is anticipated in the United States for November, but disappointments in the data could affect the resilience of the US dollar (USD) in the American session. Additionally, the price is currently at 1.0950 after a false breakout on the daily chart. I expect a potential price retracement to two key levels, the first at 1.0850 and then at 1.0760, corresponding to the 38% Fibonacci retracement. Conversely, a breakout to the upside of the 1.0950 level on a daily chart could suggest an upward movement with the objective of reaching the June highs at 1.12. Wishing everyone a successful trading day. Greetings from Gaia.
Long
by UnknownUnicorn67331274
1
XAUUSD: 2014 will be the crucial level in view of the Fed!The price of gold has struggled to surpass $2,000, facing resistance around $2,010. Daily oscillators suggest potential buying opportunities around $1,989-1.988, with support levels at $1,979-1.978 and $1,965. A break below the latter could lead to levels around $1,940. On the other hand, a break above $2,000 could pave the way for $2,007 and $2,009-2,010, with positive prospects to reach $2,022 and $2,040. However, the current price fluctuates below $2,000, with investors cautious about the future direction, influenced by FOMC minutes and positive US data. Speculations about higher interest rates and US Treasury yields hinder gold. Despite expectations for the Fed to maintain stable rates, fears of a hike persist. Weak signals from stock markets support gold as a safe haven, but the situation remains uncertain. The US dollar is recovering, but traders anticipate stability or possible rate cuts in 2024. The economic context influences gold prospects, still on track for the second consecutive weekly gain, with attention turning to US PMIs for further indications. First, I expect a price increase to the 2014 level, where I've identified two possible scenarios: a breakout of the supply zone with a subsequent retest before moving towards the 2023 high. The second scenario involves a price increase to the 2014 level, followed by a pullback towards 1981, where I've identified a crucial daily chart support and resistance level. My overall view is bullish in the long term. Greetings from Gaia, and happy trading to all.
OANDA:XAUUSDLong
by UnknownUnicorn67331274
1
How the Grinch Stole Black FridayCME: E-Mini S&P 500 Options ( CME_MINI:ES1! ), E-Mini Nasdaq 100 Options ( CME_MINI:NQ1! ) Initial data from the biggest U.S. shopping day sends a mixed signal. • E-commerce sales on Friday increased by 8.5% year-over-year, while in-store sales grew by just 1.1%, according to MasterCard Spendingpulse. The aggregate Black Friday retail sales rose 2.5%, excluding automotive sales and not adjusted for inflation. • Adobe Analytics estimated that Black Friday shoppers spent a record $9.8 billion in U.S. online sales, up 7.5% from last year, according to Bloomberg. • Brokerage TD Cowen lowered its U.S. holiday spending estimate to 2-3% growth, from 4-5%, as it forecasts flat Black Friday traffic. On Friday, I toured a dozen stores in Alton, Illinois, a small midwestern town where the Illinois River and Missouri River merge and form the mighty Mississippi. My trip covers big box retailers Kohl and Target, discount retailer Walmart, home improvement store Home Depot, specialty store Big Lot, thrift stores Dollar Tree and Goodwill, and the Alton Square Mall. My unscientific survey reveals some common patterns: unfilled parking lot, low frequency of shoppers coming in and out, no crowd in the store, and a short wait line at the checkout counter. What’s missing this year are the deeply discounted and limited quantity Big Ticket merchandises that drive shoppers to the stores at 5:00 a.m. After taking the 4% core CPI into account, the real growth in Black Friday sales comes to a negative number. Shoppers are paying more for fewer merchandises. The Grinch who stole the show is inflation. While inflation rate has been in decline this year, it only means a slower rate of price increase. The absolute price level continues rising. CPI for All Urban Consumers is 307.7 in October 2023, up from 252.9 in October 2018. The cumulative price increase in the last five years is 21.7%. While online sales is very robust, in-store purchases are more subdued. However, even though Black Friday is not as exciting as it used to be, U.S. consumers are remarkedly resilient when it comes to holiday shopping. When cash saving is depleted, they tap into credit card borrowing. Once credit limit is maxed out, they opt for the “buy now pay later” option offered by many stores and payment apps. As long as the job market stays strong, the deterioration of consumer spending will be a slow process. In my writing last week, I hypothesized that the U.S. retail sector could collapse if holiday shopping falters. With a mixed signal from Black Friday, we need to monitor Cyber Monday and the rest of the holiday shopping season to validate this claim. Year-to-date Performance by Asset Class As we are fast approaching the end of 2023, I want to pause and compare how major market assets performed so far. Below are year-to-date returns, ranking from high to low, for eight financial instruments. They each represent a major asset class: 1. Bitcoin (Cryptocurrency): +132.2% 2. S&P 500 (Equity Index): +18.8% 3. Gold (Precious Metal): +8.5% 4. Euro (Forex): +3.1% 5. Copper (Base Metal): +0.6% 6. WTI (Energy): -1.8% 7. 10-Year Bond (Fixed Income): -9.0% 8. Corn (Agricultural): -30.9% The stock market has an above-average annual gain, while cryptocurrencies have out-of-the-chart extraordinary performance. The rest of the asset classes either have mediocre returns or lost money for investors. One may tend to think what’s flying high now will continue to fly high. Is that true? Back testing this using the 2022 annual return, we will see completely different ranking: 1. Corn (Agricultural): +13.8% 2. Gold (Precious Metal): +2.6% 3. WTI (Energy): -0.7% 4. Euro (Forex): -6.2% 5. Copper (Base Metal): -14.8% 6. S&P 500 (Equity Index): +19.6% 7. 10-Year Bond (Fixed Income): -20.0% 8. Bitcoin (Cryptocurrency): -63.8% Corn, the loss-leader in 2023, was the champion star performer in 2022. Bitcoin lost the most last year, then rebounded and climbed the highest this year. Past performance is no guarantee of future performance. We can’t emphasize enough this plain simple truth. The Battle between the Fed and Market Expectation The Fed’s rate decision remains the single most important factor that drives market direction. Currently, investors price in an aggressive rate-cutting schedule for the Fed, while the Fed adapts to a step-by-step approach to rate decision-making. As time goes by, market expectation and the Fed decision will have to converge. We may not know who will give in first, but jobs and inflation data released ahead of the Fed meeting could carry invaluable insight. In my writeup, “Fed Pivot Breathes Life into Markets”, published on November 6th, I explored the idea of using stock index options to trade the events of big reports. The November jobs report will be released on December 8th, and the November CPI data will be published on December 12th. These big reports, available to the Fed right before the December 15th FOMC, could have a major impact on its rate decision. Consider this: Stock market volatility is at a 3-year low. VIX is currently quoting 12.5, down from about 26 in March. You could find asset-specific volatility using CME Group’s CVOL data. We know that options value is positively correlated with volatility. A low volatility suppressed the premium of both call and put options. My theory: The cost of acquiring options is getting lower. If a big report comes in beyond market expectation, volatility could spike, making the options more valuable. What’s more: with stock indexes trending up, put options get even cheaper. Therefore, the time may be ripe to trade the options on CME E-Mini stock index futures. CME E-Mini S&P 500 index futures ( NYSE:ES ) has a notional value of $50 times the index. With the underlying December futures ESZ3 settled at 4568.25 last Friday, an out-of-the-money (OTM) put options with the strike price of 4500 is quoted 21.50. An OTC call with 4650-strike is quoted 13.00. To acquire one put options, a trader will pay a premium of $1,075 (= 50 x 21.50) up front. The cost of one call options is $650 (=50 x 13.00). CME E-Mini Nasdaq index futures ( SEED_ALEXDRAYM_SHORTINTEREST2:NQ ) has a notional value of $20 times the index. With the December futures NQZ3 settled at 16,011, an OTM put options with a 15,500-strike is quoted 66.75. An OTC call with a 16,500-strike is quoted 49.50. To acquire one put options, a trader will pay a premium of $1,335 (= 20 x 66.75) up front. The cost of one call options is $990 (=20 x 49.50). If ES and NQ rise, call options would become more valuable, while put options decline in value. When the market turns against the trader, he could lose money, up to but not beyond the upfront premium. Similarly, if ES and NQ fall, put options would gain while call options lose out. When the trader is wrong, he could lose money, up to but not beyond the upfront premium. 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_MINI:NQ1!
by JimHuangChicago
SP500: Pullback before the big Bull Run towards 4700!Essentially, the session of the U.S. stock market index was relatively flat, hovering close to previous values and closing with a modest increase of 0.06%. The start remained stable compared to the previous day's close, with subsequent movements within a trading range throughout the entire session and an improvement towards the peak reached at 4,560.3. Presently, the short-term analysis of the Standard & Poor's 500 index indicates a decisive upward trend, with a identified target at 4,574.4. In the event of a temporary physiological correction, the immediate target is seen at 4,529.1. However, expectations are leaning towards a further increase in the curve, reaching a maximum of 4,619.8. Anticipations include a slight pullback towards 4,400 after an impressively strong bull run, followed by a resurgence towards 4,700. I anticipate a retracement within the median of the bullish channel corresponding to the 0.38% Fibonacci level. Share your thoughts; I would be enthusiastic to hear them. Best regards and have a great Sunday from Gaia.
SP:SPXLong
by UnknownUnicorn67331274
2
GREED, GREED, GREED but what follows?About a month back, I made a solid move in the market that sparked a strong rally. Now, as we near the end of a strong earnings season, I'm in a neutral position, but I'm taking steps to secure gains by trimming my positions. I reckon a decent pullback would be beneficial before considering further upward movement. There's quite a few gaps to fill due to some impulsive buying, and I believe reallocating capital is crucial for a healthier market, especially considering how much weight big tech holds in the SPY. NVIDIA's earnings showed remarkable strength. They surpassed already optimistic expectations by a significant 10%. The $600 target set by premium sellers seemed overly ambitious, yet those sellers managed to benefit from the earnings report released last week. Many institutional investors are operating under the assumption of a smooth landing in 2024, envisioning reduced rates, a depreciating US Dollar, a weakened Chinese macroeconomy, and sustained dominance in Large Cap Tech. The consensus among fund managers leans towards the belief that the Fed's rate hike cycle is nearing its end, with expectations of forthcoming decreases in short-term rates. Additionally, there's a noticeable shift of interest towards Real Estate Investment Trusts (REITs) and Japanese stocks. (Source: BofA Global Fund Manager Survey, BLOOMBERG)
AMEX:SPY
by SPADESASSETS