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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
Gold Price Trends and Federal Reserve InsightsThe downward trend in gold prices persisted after the opening of the U.S. market, with XAU/USD holding near $1,940, marking a four-week low. Despite subdued demand for U.S. dollars, gold is set to conclude the week with significant losses. On the daily chart, there is a new attempt by bulls as the XAU/USD pair seeks to surpass the 23.6% Fibonacci retracement level of the ascent from $1,810.41 to $2,009.34, currently positioned at $1,962.20. Examining the 4-hour chart, XAU/USD faced selling pressure around the downward 20-period SMA, slipping below the flat 100-period SMA. A rise above this indicator could stimulate buyer interest, leading to further intraday gains. Meanwhile, technical indicators on this time frame are pointing upward within negative levels. The U.S. dollar initially showed strength in the first half of the day but reversed course after the U.S. market opening. Consequently, XAU/USD bounced from the weekly low of $1,944.71 to trade above $1,960. Richmond Federal Reserve Bank President Thomas Barkin provided an optimistic assessment, describing the economy as "notably" healthy and acknowledging progress in addressing inflation. However, he emphasized that the task is not yet complete, citing persistently high inflation. Barkin also expressed the opinion that an economic recession might be less severe than past recessions, highlighting a more balanced labor market. In a separate event, Atlanta Federal Reserve President Raphael Bostic reiterated that the full effects of recent policies are yet to manifest. Let me know what you think, have a great day from Nicola, CEO of Forex48 Trading Academy.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
2
USDJPY: Shorting NowNot sure if this is the big short or not yet, but looking at price action it's been a jog up to this point, rather than a sprint, this tells me we're fine to short until at least the ascending dynamic trendline that reversed the last short. We have an engulfing candle on the 1 hour, followed by a long-body doji, so I think we're going to see a push down. If we go below then that's my reversal sign for bigger lots. The problem is history tells us BoJ will intervene, this type of knowledge can force people to get in big too soon. Let's see what happens from here, SL above the last high.
Short
by Finchcliffe
GOLD SELL HAWKISH FEDDear Ztraders, A decline in the price of gold due to hawkish Federal Reserve (Fed) commentary can be understood through the relationship between interest rates, inflation expectations, and the opportunity cost of holding gold. Interest Rates and Opportunity Cost: Gold is a non-interest-bearing asset. When interest rates rise, the opportunity cost of holding gold increases because investors could potentially earn higher returns from interest-bearing assets like bonds or savings accounts. In a hawkish environment, the Fed signals a willingness to raise interest rates to curb inflation or maintain economic stability. As a result, investors may shift their funds from gold to interest-bearing assets, leading to a decrease in demand for gold and a decline in its price. Inflation Expectations: Gold is often seen as a hedge against inflation. When the Fed adopts a hawkish stance, it may be interpreted as a measure to control inflation. If investors believe that the Fed's tightening policies will effectively control inflation, the perceived need for holding gold as an inflation hedge diminishes. Consequently, investors may sell off their gold holdings, contributing to a decline in its price. Strength of the U.S. Dollar: Gold is priced in U.S. dollars globally. When the Fed adopts a hawkish stance, it often leads to an appreciation of the U.S. dollar. A stronger dollar makes gold more expensive for investors using other currencies, potentially reducing global demand for gold and putting downward pressure on its price. Risk Sentiment and Equities: Hawkish commentary from the Fed may signal a belief that the economy is strong and that monetary policy needs to be tightened to prevent overheating. In such an environment, investors may shift their focus towards riskier assets like stocks, especially if the interest rates on bonds become more attractive. This shift in risk sentiment can lead to a decrease in demand for safe-haven assets like gold, contributing to a decline in its price. It's important to note that market reactions can be complex, and various factors beyond Fed commentary, such as geopolitical events, economic data releases, and global economic conditions, can also influence the price of gold. Additionally, investor perceptions and expectations play a crucial role in determining how markets respond to central bank communications. Greetings, ZTRADES
PEPPERSTONE:XAUUSDShort
by ZILATRADES
3
GBPUSD: Wow, some move on Friday, needs to close FVG?That fundamentals last week had a serious impact on this pair. The FED held rates with a dovish tone, and then the cooling labour market data slammed the USD. The BoE also held rates, but with a hawkish tone. UK data is not great, USD real yields are stronger, and there are still global tensions which are normally strong for the dollar, that said, this pair has broken out of weekly descending path with some umph, so this could well be the start of a reversal. Normally in these cases we get a retracement first to fill the fair value gap, we're also at strong resistance so will I believe we have to fall back to attract more buyers. Overall I think we could be looking at a reversal so will be keenly watching the move down with tight SL but with an expected target around 1.221.
Short
by Finchcliffe
USDJPY: Still waiting for BoJ InterventionI don't believe the BoJ have gotten involved yet, or if they have it's going under the radar. I believe this pair has only slipped due to USD retracement following the NFP and softer labour market data last week. With retailers now net short I think that we'll see another push back up. We have broken my rising wedge line related idea, however unless we break below 1.487 then we're still in the uptrend. I now see it as unlikely we'll get to 154 and the BoJ intervention will surely come if necessary (it may not need to if USD keeps falling). Overall no confirmation of reversal so I'm long again when I et the LTF signal, but setting 151.65 as the target with tight SL (and will keep moving it up) as I don't want to get caught in a buy up here. Let's see what this week brings.
Long
by Finchcliffe
GBP/USD edges lower, BoE's Bailey says no to rate cutsThe British pound has edged lower on Wednesday. In the North American session, GBP/USD is trading at 1.2287, down 0.10%. There are no tier-1 releases out of the UK or the US today, leaving investors to focus on comments from Bank of England Governor Bailey earlier in the day. The Bank of England kept rates on hold for a second straight time last week at 5.25%, the highest level in 15 years. Investors were keen to hear from Governor Bailey who spoke today in Ireland. Bailey sounded hawkish, reiterating that rates would have to remain "restrictive for an extended period" in order to bring inflation back down to the 2% target. Bailey said that the BoE is projecting that inflation will fall back to target in about two years. Will the BoE cut rates anytime soon? Bailey flat-out rejected the idea, stating that "it's really too early to be talking about cutting rates". However, BoE Chief Economist Huw Phill appeared to contradict his boss, saying on Monday that a cut in August 2024 "doesn't seem unreasonable". Phill noted that too restrictive a policy could create a recession and push inflation below target.  The discussion over rate cuts may be hypothetical at present, but rates will have to come down eventually and BoE policy makers are likely to have differences of opinions on the matter. In the US, Fed Chair Powell made public remarks earlier today but did not address monetary policy. Fed Reserve Governor Michelle Bowman said on Tuesday that the Fed may need to raise rates if inflation falls too slowly. Bowman said that the Fed has made progress on the inflation front but it remains too high, with services inflation remaining stubborn and the risk of higher energy prices. The markets have priced in a rate cut as early as May, with the odds of a rate cut of at least 0.25% rising to 51%, up from 40% a week ago, according to the CME Group's FedWatch tool. There is resistance at 1.2348 and 1.2476 GBP/USD tested support at 1.2287 earlier. Below, there is support at 1.2183
by OANDA
EUR/USD Dynamics & Market FactorsEUR/USD Pair: The EUR/USD pair is trading within a tight range around the 1.0700 level during the Asian session, lacking a clear intraday direction. US Treasury Bond Yields and Equities: A recent significant pullback in US Treasury bond yields and a rally in US equity markets have not provided support for the US Dollar, traditionally considered a safe-haven asset, contributing to a favorable environment for the EUR/USD pair. Federal Reserve Rate Hike Path: Uncertainty surrounds the future path of interest rate hikes by the Federal Reserve. Recent indications from the Fed that financial conditions may already be tight enough to control inflation have led to the perception that the Fed might pause its interest rate hike campaign. US Monthly Jobs Report: The less robust US monthly jobs report released on Friday has reinforced the notion that the Federal Reserve is likely to maintain its current policy stance for the third consecutive time in December. Hawkish Fed Officials: Some Federal Reserve officials have adopted an assertive tone and recognized the resilience of the US economy. German Industrial Production: Tuesday's data revealed a more significant decline than expected in German industrial production in September, which could weigh on the Euro and restrict the potential upside for the EUR/USD pair. European Central Bank (ECB) Rate Hikes: Expectations suggest that further rate hikes by the European Central Bank (ECB) may not be on the agenda, indicating a bearish outlook for the Euro. Market Drivers: The release of the final German Consumer Price Index (CPI) and Eurozone Retail Sales data, along with US bond yields and overall market sentiment, will influence the US Dollar and potentially create short-term trading opportunities for the EUR/USD pair.
Long
by Forex48_TradingAcademy
3
GBP/USD Upward Movement to 1.25!On Tuesday, the GBP/USD exchange rate faced renewed downward pressure, falling towards the 1.2250 level. This decline was driven by the ongoing recovery of the US Dollar, supported by rising Treasury yields, despite positive movements in Wall Street. The GBP/USD exchange rate was last seen trading near 1.2300, where it encountered a key resistance zone marked by the 38.2% Fibonacci retracement level from the latest downward trend and the 20-period Simple Moving Average (SMA) on the 4-hour chart. If the exchange rate falls below this level and confirms it as resistance, we may witness further losses towards 1.2260 (static level) and 1.2200 (23.6% Fibonacci retracement level and the 50-period SMA). During Tuesday's European session, the GBP/USD exchange rate faced pressure and dropped into the 1.2300 region. The short-term technical outlook for the exchange rate suggests a bearish stance. In the absence of significant data releases, market sentiment and risk perception could play a crucial role in GBP/USD performance in the second half of the day. After reaching its highest level since mid-September at 1.2428 on Monday, the GBP/USD exchange rate reversed direction and closed in negative territory. The rebound in US Treasury bond yields increased demand for the US Dollar (USD) and prevented the exchange rate from holding onto previous gains. Earlier in the day, UK house price data revealed a 1.1% monthly increase in October, but this publication did not trigger a significant market reaction. Furthermore, the price retraced precisely to the 0.62 Fibonacci level, and now I personally expect a rebound to 1.23, where we have a supply zone, followed by a slight pullback and then a rise to 1.25. Let me know what you think. Happy trading to all, greetings from Nicola, the CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
8
TONCOIN - Top 10 Crypto Market Cap PotentialTon Targets - Support and Resistance Zones. Support Zone: $2.275 Resistance Zone 1: $2.55 - $2.65 Target 1: $2.80 Previous Top Resistance Zone: $3.01 - $3.35 Potential Bull Run Target 1: $4.85 Toncoin (TON) is a layer-1 blockchain that emerged back in 2018 from the creators of the secure messaging app Telegram. The project underwent a transformation after being handed over to the TON Foundation, leading to a name change from "Telegram Open Network" to "The Open Network." Since 2020, the tech has seen progress thanks to a group of enthusiasts working without commercial interests, forming the TON Foundation. Toncoin, previously called Gram, serves as the native cryptocurrency on the TON network. Originally, the plan was to integrate TON into a user-friendly app enabling fund transactions for users. Users pay fees and employ TON for transaction validation and payments. The Toncoin network relies on the proof-of-stake (PoS) consensus model to ensure scalability and dependability. As per the project's website, the platform offers swift, transparent, and secure payment services, making transactions cost-effective and eliminating the need for third-party apps.
Long
by Helios_Capital_Investment
ES: Fed Pivot Breathes Life into MarketsCME: E-Mini S&P 500 Options ( CME_MINI:ES1! ) Last Wednesday, investors cheered as the Fed kept interest rates unchanged for the second time in a row. On Friday, a soft jobs report backed up market expectations that the rate-hiking campaign is over. For the full week, the Dow was up by 5.07% in its best week since October 2022. The S&P was higher by 5.85% and the Nasdaq gained 6.61%. It was the best week for both indexes since November 2022. Investors Choose to Ignore What the Fed Says Stock market behavior shows that the Fed is still the dominant driver. Drilling down further, I find that what moves market is not the actual Fed action, but the expectation of what the Fed would do next. Very often, such market-moving expectations could be in direct contradiction of the Fed Chair’s public statement. At the post-FOMC press conference, the Fed Chair said that they had not made a decision for the next meeting. He also stated that pausing now would not prevent the Fed from raising rates again. The Fed Chair stressed that they had not discussed if or when to cut rates. The overarching focus now is to bring inflation down to the 2% target rate. Investors think otherwise. According to CME FedWatch Tool, the probability of keeping rates unchanged on the December 13th FOMC is 95.4% as of November 5th. By the FOMC meeting scheduled on May 1st, 2024, the odds for cutting rates by 25-50 bps are 71%. (Link: www.cmegroup.com) Investors acted upon their expectations. Prior to the Fed meeting, Treasury yields were rising sharply. 10Y rose from 4.5% to above 5.0% in 11 days. In the three days following the rate decision, 10Y took a nosedive and now back to 4.6%. This dramatic changes in yields took place while the Fed did nothing. The stock market rebound could be attributed to the change in expectations too. Lowering rates has the effect of raising the present value of future cash flows, thus increasing a company’s market value, as prescribed by the Discounted Cash Flow valuation method. The collapse of the US dollar is due to the expectations that it would not generate higher returns without further rate increases, according to interest-rate parity theory. Let’s look at two more examples: On July 26th, the Fed raised rates by 25 bps. This was the 11th consecutive rate hike. US stocks rose initially, with the major indexes going up 1-2%. Investors interpreted that this marked the end of Fed tightening. The expectations of Fed Pivot drove market higher, even though the Fed continued to stress the important for fighting inflation. The September 20th FOMC was the first Fed Pause. On face value, this should have been taken as a huge positive. However, investors believed that the Fed would raise rates one more time by year end. US stocks falls so much that both S&P and Nasdaq lost more than 10% from their high and entered contractionary territory. Trading with E-Mini S&P Options What’s the implication from the above observation? 1. Investors may have an easier time forecasting the Fed decision itself than the market reaction after worth. A 95% probability of a Fed Pause could not tell if the stock market would rise or fall after the decision is made. 2. Investor expectations could be adjusted very quickly. Following the Fed decision, the stock market could move up or down by 5% in a week. We could build an event-driven strategy focusing on the December 13th Fed meeting. If we think that the stock market would make a sizable move after the Fed decision, CME E-Mini S&P Options on Futures could be used to express this view. The trade would not be built by this single insight only. There are more: The November jobs report will be released on Friday, December 8th, and the November CPI data will be published on Tuesday, December 12th. These big reports, available to the Fed right before the FOMC, could have a major impact on its rate decision. More importantly, it could alter investor expectations and drive market volatility. The December 2023 contract (ESE3) will be expired on Friday, December 15th, two days after the FOMC. It is also the “Triple Witching Day”, where US stock index futures, stock index options, and single-stock options contracts all expire on the same trading day. My writeup from September shows that stock market is highly likely to make a big move on Triple Witching and on the days leading up to it. With big reports, Fed decision and Triple Witching all within one week, the stock market could enter wild swings as investors digest new data. Time is ripe for options traders. CME E-Mini S&P 500 Options provide leverage and capital efficiency. Options are based on futures contracts. Contract notional is $50 x S&P 500 Index. On the morning of November 6th, the December futures contract is quoted 4,384. The out-of-the-money (OTM) call strike 4,580 is the most active call options, with over 50,000 lots traded. If a trader purchases a call and it finishes at 100 points above the strike, she will realize a gain of $5,000 (=50 x 100), minus the upfront premium she paid. If the market moves against the trade, with the index value below the strike, she will lose money, up to but not beyond the upfront premium. The OTM put strike traded 1,023 lots. If the trader purchases a put and it finishes 100 points below strike, the trader will also make $5,000, minus the premium. If the market moves against the trade to finish above the put strike, the trader will 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:ES1!Long
by JimHuangChicago
6
TradePlus-Fx|GOLD: calm💬 Description: Metals have stopped their rapid growth, which can most likely be associated with a “pause” in the Middle East. However, demand still remains and is likely to continue in the near future. Before this, you need to “cleanse” the market of unnecessary passengers, that is, buyers, who are actually fewer than sellers. The latter, in turn, try to enter at the very maximum and, instead of profit, catch stop-losses. Approximately the same scenario most likely awaits us after the price moves slightly lower to 1948.160. 🔔 FX CALENDAR TODAY 🔔 🇬🇧Manufacturing/Services/Composite PMI 🇪🇺ECB President Lagarde Speaks 🇺🇸Manufacturing/Services/Composite PMI 🇺🇸Richmond Manufacturing Index 🛢API Weekly Crude Oil Stock ➖➖➖➖➖➖➖ 🚀Thank for your BOOSTS 🚀 👇Share your views and FOLLOW US 👇
OANDA:XAUUSDLong
by TradePlus-Fx
24
XAU/USD Pullback to 1950 after NFP?The price of gold is consolidating just below the $2,000 level at the beginning of the week on Monday. This comes as the United States Dollar (USD) and US Treasury bond yields are attempting to find stability in a market environment that is inclined towards risk-friendly sentiment. Gold has faced challenges staying above the $2,000 threshold on multiple occasions last week, finding demand at lower levels. An immediate support is available at the rising trendline, situated at $1,975. If this support is breached, the November low at $1,9769 may be revisited. Failing to hold above this level could lead to a test of the static support at $1,960, potentially opening the path to the psychological level of $1,954. On the upside, breaking and maintaining above the $2,000 level is crucial to initiate a significant uptrend. A strong resistance barrier is present around the multi-month high of $2,009, coinciding with a horizontal resistance. The next significant level for Gold buyers is near the mid-May high, around $2,020. The Unemployment Rate increased to 3.9% compared to the expectation of 3.8%. Asian markets are following the positive closing on Wall Street from last Friday, buoyed by optimistic remarks made by China's Premier Li Qiang over the weekend. Li reaffirmed China's commitment to maintaining its pace of opening up and sharing development opportunities with the world. However, the US Dollar is seeing a minor rebound in Asia on Monday, benefiting from a slight uptick in US Treasury bond yields as investors adjust their positions for the new week. Additionally, during the Asian session, the price broke a swing high at the level of 1987.50, which is leading the price towards a pullback in the direction of around 1950, where there is a significant horizontal support/resistance zone. In that area, it will be important to evaluate possible upward movements and potential market entries at M15/M5, considering that macroeconomic data is scarce this week, and a calmer market could still reveal surprises. Comment and leave a like, have a great start to the trading week, everyone, and greetings from Nicola, CEO of Forex48 Trading Academy.
OANDA:XAUUSDLong
by Forex48_TradingAcademy
5
EUR/USD Pullback Expected Before a New Rally!EUR/USD has gained bullish momentum, surpassing the 1.0700 level for the first time since late September. The upward movement of the pair during the American session was driven by a US Dollar selloff triggered by a weaker-than-expected increase in October's Nonfarm Payrolls. The US Dollar (USD) selloff, which began after the Federal Reserve's monetary policy announcements on Wednesday, continued on Thursday. The USD weakened further against other currencies following disappointing data from the United States, revealing a 0.8% decline in Unit Labor Costs on a quarterly basis in the third quarter and an increase in weekly Initial Jobless Claims from 212,000 to 217,000. Market expectations for the US Nonfarm Payrolls (NFP) in October are an increase of 180,000, following the impressive gain of 336,000 in September. During the post-meeting press conference, Federal Reserve Chairman Jerome Powell emphasized that policy decisions would be based on a comprehensive analysis of data and risk assessment. According to the CME Group FedWatch Tool, the market is currently pricing in a 20% probability of one more rate increase in December. While a strong NFP reading may not significantly change these odds, it could provide an immediate boost to the US Dollar. Conversely, market positioning suggests that there is room for further weakness in the US Dollar if the NFP falls short of expectations, particularly if the report shows a figure at or below 150,000. Additionally, the price is currently within a supply zone between the 1.0690 and 1.0750 levels. At this level, the price may experience a pullback, especially after the bullish momentum led the market to break a swing high at the 1.0676 level. Therefore, I personally expect a retracement before continuing to move long towards the 1.10 level. Let me know what you think, leave a comment, and give a like. Greetings from Nicola, the CEO of Forex48 Trading Academy.
Long
by Forex48_TradingAcademy
7