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EURUSD Continues to Strengthen Following the FED Meeting The recent breakout of the EURUSD above the descending channel was bolstered yesterday following the July policy meeting of the Federal Reserve. Jerome Powell and his colleagues from the FOMC did not bring anything new to the table, which weakened the greenback in the short term. The price action is currently probing the 200-day MA (in purple). The next closest resistance can be found at the 23.6 per cent Fibonacci retracement level at 1.18892.
by Trendsharks
FED: Recovery Heading Towards The Right Direction (29 July 2021)The Fed’s decision. The U.S. Federal Reserve delivered no surprise during their monetary policy meeting earlier today as widely expected. The Federal Funds Rate was held unchanged at the target range of 0-0.25% while quantitative easing remains at $120 billion per month ($80 billion of Treasury securities and $40 billion of agency mortgage-backed securities). Optimistic tone on U.S. economic recovery in the rate statement. Although no actions were carried out, the Fed did expressed signs of optimism on the U.S. economic recovery in the interest rate statement. The following changes made in the statement indicate so. The sentence: “Amid this progress and strong policy support, indicators of economic activity and employment have strengthened.” has been revised to: “With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen.” The change indicates continued recovery in economic activities and employment. The sentence: “The sectors most adversely affected by the pandemic remain weak but have shown improvement.” has been revised to: “The sectors most adversely affected by the pandemic have shown improvement but have not fully recovered.” The change indicates that the sectors most adversely affected by the pandemic have improved since the previous meeting. The sentence: “Since then, the economy has made progress toward these goals, and the Committee will continue to assess progress in coming meetings.” has been added into the latest statement, indicating optimism in the economic recovery. Progress made in economic recovery but still far from full recovery. Despite the optimistic tone sent out by the Fed, the central bank’s Chairman Jerome Powell cautioned during the press conference that the economy is still a distance away from making “substantial further progress” towards the Fed’s goals of maximum employment and price stability. This does not come as a surprise since the U.S. job market is still around 6.3 million jobs away from the pre-pandemic level. Furthermore, Powell highlighted that inflation is expected to remain above the central bank’s target in the upcoming months but not sufficient to trigger a change in monetary policy. On the issue of the recent rise in COVID cases due to the Delta variant, Powell downplayed the negative impact it has on the U.S. economic recovery. He said: “With successive waves of Covid over the past year and some months now, there has tended to be...less in the way of economic implications from each wave, and we will see whether that is the case with the Delta variety,” expressing confidence that the handling of the Delta variant will be more effective than handling COVID-19 when it was first declared a pandemic. Impact on the market. The upbeat tone delivered by the Fed resulted in the market going risk-on, increasing the demand for risky assets and currencies. Thus, the safe haven U.S. dollar weakened against the other major currencies.
TVC:DXY
by GH_Lee
7.28.21 Candle Will Be Telling!What we have is a possible Hanging man. We have two of the three ingredients for a 87% chance of downward trend over next week or two if next candle is red. Given this weeks events, its looking bearish short term at the very least. Will be interesting to see how things shake out! Let me know your thoughts of if this was helpful! Not advice or a recommendation to initiate any kind of transaction. All investments have risks associated with them. Trade with care.
AMEX:SPYShort
by deadsquare214
5
Impact of Fed Unchanged Interest Rate and Gold PricesHere I tried to show the movement of the day when Fed announces its unchanged Interest Rate decisions during the last 6 times. As you can see, the gold prices had been quite volatile during the last Fed decision on June the 16th and shed 1.45%. Since then, the yellow metal has not been able to overcome the loss and is in the downward trend. Please note that this is shared for educational and informational purposes only and is not intended for financial decisions. If you like the idea, please like and comment :)
OANDA:XAUUSDEducation
by UnknownUnicorn621491
The Australian Dollar Appears OversoldThis week’s Federal Reserve meeting could ignite some activity in the currency market. The Australian Dollar, in particular, has some interesting patterns. First, stochastics on AUDUSD’s weekly chart have dipped to their most oversold level since February 2020. Next, consider how prices have returned to the 0.73 area where they peaked Aug. 31-Sept. 1. This is also near a monthly low from May 2017. Intermarket analysis could be interesting because the Aussie has traditionally followed copper (although that correlation has broken down this year). Given the current rally in copper and ongoing strength in iron ore, this could support the currency. Remember, Australia is a major mining country. Overall, there isn’t much confirmation yet and the Australian economy is still struggling. However, given the Fed’s commitment to low rates and potential topping patterns in the greenback, futures traders may want to keep an eye on the Aussie for a potential turn. TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
by TradeStation
Gold Miners Have Had a Golden CrossThe Market Vectors Gold Miners ETF has one of the most interesting charts in the market. Notice the steady decline from last summer, followed by a bump in the spring. It then gave back almost all those gains but still managed to drag the 50-day simple moving average (SMA) above the 200-day SMA. That results in a strange situation with both SMAs falling – yet still in a bullish sequence. Next, the recent drop erased most but not all the earlier bounce. It has managed to register a higher low (notice the weekly chart below). Third, MACD has turned positive in the last few sessions. Finally, stochastics on the weekly chart show an oversold condition: The other catalyst could be the Federal Reserve because Jerome Powell was more dovish than expected yesterday. The U.S. dollar has trended upward lately, but in March GDX turned higher about two weeks before the greenback rolled over. So we could be at a start of a new pattern, with a dovish Fed lifting precious metals and dragging on the dollar. TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
AMEX:GDXLong
by TradeStation
59
Gold has no concrete direction right now! After finishing an uptrend, the chart broke its parallel channel and entered a side way consolidation phase. In this current situation, there is no solid speculation for the future of the chart. The only thing which is possible here is to short when we are near the top and open a long position near the bottom(supporting areas). We should be cautious about tonight’s federal reserve’s statement. That news would make the markets move very extremely! Good luck.
OANDA:XAUUSD
by khanzadiashkan7
USD/CAD: Inflation it's a good sign that U.S. economy will peakThe U.S. Dollar continue strenghten during this day, and today, we have a good news that Federal Reserve it's running the inflation in the economy. For that, this it's a good news in the economy as investor hope with more news about the next check stimulus about the covid-19 recovery in America. Now, I put a long position in the market price at $1.2520 CAD and the SL will be $1.2490 CAD (30 pips) and my target at $1.2600 CAD (81 pips)
Long
by harisonhbn9718
DXY UP or DOWN then UP ?Last week the USD - supported by mixed data - was consolidating after rejection from the descending trendchannel and still within an important zone near the 92 . Two possible scenarios are in play : A) The price closes below 92 and then DOWN to an important area marked by the arrow 1- Fib 0.618 2-91 psychological lvl 3-retest of the broken Weekly descending trendline 4-Daily ascending trendline 5- Bearish Divergence on StochRSI From this point an UPWARD move would be expected B) The price consolidates before finally BREAKING OUT of the Daily descending trendchannel and initiating the Weekly Double Bottom pattern and price may carry it to the 97 lvl If price breaks 90.5 DOWNWARD the idea becomes invalidated ***Color coding*** Violet Monthly & Weekly Red Daily Blue Hourly Grey LQ zone *** Thanks for reading and safe trading everyone,,,
TVC:DXYLong
by kimozelghonemy
Gold: The Big Picture.- Period of pandemics and uncertainties - Period of high inflation attacks when U.S. economy started falling (all that money kicks-into daily US economy and affect/inflate household spending) --- Same period where money will start flowing EMs & China (Age of EMs starting here because of trillions of Junk-Dollars need to earn something out of the U.S. markets instead of ducking) - Period of 2Ks largest inflation attack (Gold may hit up to 7500$-10000$ then like before when it hit 850$ first time) - Dust setting, but things never gonna be same anymore. Age of Global Hyperinflation, where U.N. will start talking about "rebuilding global monetary system", end of Bretton Wood officially. * Scenario is based on Elliott Wave & current/near-future market structuring, reforms (basel 3, fed bullshits, EMs such as Turkey, etc.), Asia, 1:1000 banking during pandemics, incredible money supply (how US gov't pickpocketing citizens & the world) etc. (My personal view.)
FX:XAUUSD
by Gentlem4n
2
US FED's New Policy Shift With Some Dollar StrengthUS FED's New Policy Shift & Medium-term Dollar Strength Wednesday's meeting by the FED has proved true that the FED is making a new monetary policy shift to normalize sooner than later, to reducing the size of the balance sheet ; and, this action that will send yields higher. This has brought strength into the USD. Thus, USD with strength being signaled, I a positive the USD in the medium-term for another quarter or two. This video summarizes a few trades that are being taken and that have been taken due to the highly anticipated event of a FED move, which happen sooner than expected.
by Rocketman
The Dollar Index Breaks Higher - A MirageAfter trading at the highest level since 2002 during the risk-off period when COVID-19 spread worldwide like a wildfire, the US dollar index fell, making lower highs and lower lows from March 2020 through January 2021. The index fell from 103.96 to a low of 89.165, a 14.2% decline in the index that measures the dollar against other world reserve currencies. The Fed tightens without tightening credit The dollar index breaks above a technical level The greenback remains in a medium-term bearish trend The long-term trend is higher Fiat currency moves are a mirage for one critical reason After consolidating around the 90 level from mid-May through mid-June, the dollar index took off on the upside in the aftermath of the latest Fed meeting. While the dollar has moved higher and eclipsed a short-term technical resistance level, the medium-term trend remains bearish. To confuse matters, the long-term trend dating back to 2008 is bullish for the US dollar index. Governments and monetary authorities manage currency markets to provide stability for global financial markets. Meanwhile, the overall foreign exchange market is more than a mirage because it is not readily apparent if the asset class gains or loses value in a larger sense. The bottom line is that the dollar and other fiat currencies rely on the full faith and credit of the governments that issue the legal tender. The dollar may be rallying against other currencies, but it can also be losing purchasing power making the entire currency market a farce. The Fed tightens without tightening credit At the June Federal Market Committee meeting, the US central bank left the short-term Fed Funds intact at zero to twenty-five basis points. The committee said it would leave its quantitative easing program unchanged and continue to purchase $120 billion in debt securities each month. The only change was a slight increase of five basis points in the reverse repo rate. The bottom line is the Fed continued on its accommodative monetary policy path. Meanwhile, the central bank increased its GDP growth forecast from 6.5% to 7% and its inflation expectations from 2.5% to 3.4%. While very little changed, the rhetoric shifted towards tighter credit policies as the Fed acknowledged rising inflationary pressures. Seven committee members project a rate hike in 2022, with two expecting two increases in the Fed Funds rate. The markets viewed the statements and rhetoric as a sign that tighter policy is on the horizon and tapering QE will occur sooner rather than later. Commodity prices fell in the wake of the Fed meeting as rising interest rates increase the cost of carrying raw material inventories and financing production. The dollar moved higher as interest rate differentials are a critical factor for the value of one currency versus another. The dollar index breaks above a technical level The dollar index took off on the upside in the wake of the June FOMC meeting, surpassing a short-term technical resistance level. The daily chart of the September dollar index futures contract illustrates the move above the May 5 91.41 high on June 16, the day after the June Fed meeting. The index rose to a high of 92.395 on June 18 before correcting. At the end of last week, the September dollar index settled at the 91.844 level, above the breakout level at 91.41, which is now technical support. The prospects for higher US interest rates were bullish winds in the dollar’s sails. The greenback remains in a medium-term bearish trend While the dollar index rose above a technical resistance level, the greenback remains in a bearish medium-term trend despite the recent rally. The weekly chart shows that the index has made lower highs and lower lows since March 2020. To negate that bearish trading pattern, it needs to rise above the critical resistance level at the 93.47 level from the week of March 29, 2021. If the dollar index stalls and fails to rise above that high, it will put in another lower peak to continue the bearish trend over the past fourteen months. The long-term trend is higher To confuse matters, the dollar index’s long-term technical picture remains bullish over the past thirteen years. The quarterly chart highlights a pattern of higher lows and higher highs for the dollar index since reaching a bottom at 70.805 in early 2008. With a bullish short-term trend, a bearish medium-term pattern, and a bullish long-term trend, the path of least resistance of the US currency against other world reserve currency remains in doubt. However, it may not matter if the dollar index moves higher or lower against the euro, yen, pound, and other leading fiat currencies. The index could be a mirage masking the overall weakness in the foreign exchange arena. Fiat currency moves are a mirage for one critical reason The foreign exchange market only measures the value of one currency versus another. The price differentials tell us nothing about purchasing power other than if one foreign exchange instrument is trending higher or lower against another. The recent rise in the dollar index that followed on the heels of a more hawkish tone from the Fed could be a mirage. The bottom line is the dollar’s purchasing power has been declining. The May CPI data shows a 5% increase and a 3.8% rise, excluding food and energy. While many commodity prices corrected lower in June, crude oil and natural gas made new multi-year highs. The energy commodities power the US and the world. Rising prices are inflationary. Inflation erodes the value of money, making it more expensive for consumers to purchase essentials. While the dollar index recovered from the 90 to around the 92 level, the move is a mirage that masks the long-term trend in all fiat currencies. In 2019 and 2020, gold reached a record high in all fiat currency terms. Gold in euros, pounds, yen, dollars and most other foreign exchange instruments rose to record levels. Central banks hold gold as an integral part of their foreign exchange reserves, making the yellow metal a reserve currency alongside the dollar and the euro. The bottom line is that inflationary pressures continue to rise. The dollar index could continue to power higher over the coming days, weeks, and months, but the US currency could be weakening at the same time. A pivot towards a more hawkish approach to US monetary policy may lift the US currency, but that may only make the dollar the healthiest horse in the glue factory. Click the link below to register for the Free Monday Night Strategy Call Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
ICEUS:DX1!
by Andy_Hecht
USDCAD: USD strength has been signaled By the FEDFundamental Commentary: Wednesday's meeting by the FED has proved true that the FED is making a new monetary policy shift to normalize sooner than later, to reducing the size of the balance sheet ; and, this action that will send yields higher . This has brought strength into the USD. Thus, USD with strength being signaled, I a positive the USD in the medium-term for another quarter or two. Technical Commentary: Big rally in the dollar. pullback to support horizontal and fib support confluence
Long
by Rocketman
How Do We Keep Inflation in Check? Crypto May Be the AnswerTools and Practices for Inflation Down Print Less Money Encourage People and Institutions (inc. Government Spending) to Save Rather than Spend Raise Interest Rates on Loans and Savings Account Raise Taxes Bring Down Costs of Basic Goods (Real-Estate, Healthcare, Education, Food, Supply Chain Companies) Why This Isn’t Likely to Happen in the Near Future The Fed has printed historical amounts of money in order to pay for COVID related expenses, stimulus checks, and government procurement contracts. (After-effects of these spending habits are still unknown.) Government spending is at an all-time high. (Highest now, lowest in the 1970s.) The Fed has publicly stated that no action will be taken, first meeting in Aug 2021, action taken at 2023 at earliest. Politically unpopular. Politically unpopular because certain asset classes stand to gain from high inflation. (e.g. real-estate) Likely Outcomes For the Crypto Industry Both on micro and macro levels, high inflation usually coincides with high cryptocurrency adoption rates. (Venezuela, Nigeria, Argentina, etc.) People “exiting” the US Dollar lowers demand for fiat while increasing demand for crypto - a win-win for some.
BITSTAMP:ETHUSD
by RyanTanaka
2
Bonds are Ground Zero for Market's Battle with Fed and TreasuryThe bond market is the primary capital-raising marketplace. Market participants issue new debt or buy and sell debt securities in the secondary market. Bonds, notes, and bills are tools for public and private expenditures. Since the US is the world’s leading economy, the market for US government bonds is massive. The long-bond or 30-Year Treasury is a barometer for US interest rates. The long bond has been trending lower since August 2020- The latest CPI data confirms the trend Last August, the Fed made a subtle but significant shift Monetary and fiscal policy remains accommodative Conflicting signals for the bond market cause a bounce Jackson hole could bring another shift While the US central bank, the Federal Reserve, sets short-term interest rates via the Fed Funds rate, buyers and sellers establish rates further out along the yield curve. Following the 2008 global financial crisis and the 2020 worldwide pandemic, the Fed initiated a quantitative easing or QE program. QE is a tool to stimulate the economy via debt purchases that put a cap on rates further out along the yield curve. Over the past year, the central bank has purchased $120 billion in government debt securities each month. The bond market has been dropping over the past year, despite the Fed purchases. Imagine where the long bond futures would be if the Fed were not buying each month. The bond market is taking on the Fed as it signals inflationary pressures are rising. The Fed may call inflation “transitory,” but this week, the latest consumer price index data from May was a warning sign that the bond market is correct, and the Fed is wrong. The long bond has been trending lower since August 2020- The latest CPI data confirms the trend The US 30-Year Treasury bond futures recently rolled from the June to the September contract. The weekly chart of the long bond futures highlights the drop from 183-06 during the week of August 3, 2020, to the low of 153-29 in late March, early April 2021. While the nearby contract recovered over April, May, and early June, at the 161 level, it remains a lot closer to the low than last August’s peak level. Bonds seem to have found a floor at just below the 154 level. Weekly price momentum and relative strength indicators have been trending higher since reaching oversold conditions in late March. Open interest, the total number of open long and short positions in the long-bond futures, moved from 1.106 million contracts when the bonds last August to the 1.207 level at the end of last week. Increasing open interest when the price declines is typically a technical validation of a bearish trend in a futures market. Weekly historical volatility at the 4.37% level as of June 11 was close to the lowest level in years. While the long bond recovered from the lows, last week’s CPI data was bearish for the debt market. The 5% increase and 3.8% rise in core inflation was the highest level in nearly three decades. The Fed continues to call inflationary pressures “transitory” and has concentrated on its “fell employment mandate.” The trend in the bond market, raw material prices, the stock market, real estate, and most other asset classes points to rising inflation. Employment data could be the transitory outlier as low-wage earners continue to benefit from government stimulus and expanded benefits, which results in higher earnings from staying at home rather than returning to work. The latest CPI data confirms rising inflationary pressures. Last August, the Fed made a subtle but significant shift Last August, the US central bank told markets it adjusted its 2% inflation target to an average of 2%. The Fed has been encouraging inflation with low interest rates and quantitative easing. It is unclear what period the Fed is calculating the average rate, which makes a substantial difference. Inflation had been well below the target rate for years before it began to rise in recent months. Economics is a social science. The models and formulas that the Fed watches and depends on are only as good as the variables, which are the inputs for the decision-making process. Individuals and companies are experiencing dramatic price increases and asset inflation. The Fed is taking a wait-and-see approach as it continues on the current course. The central bank was hoping inflation would rise last August. As the old saying goes, be careful what you wish for, lest it comes true. Monetary and fiscal policy remains accommodative The tidal wave of central bank liquidity created by low short-term interest rates is unprecedented. Quantitative easing to the tune of $120 billion per month in debt security purchases is an attempt to keep interest rates further out along the yield curve at low levels to stimulate borrowing and spending and inhibit saving. With the long-bond futures slipping from over 180 to the 161 level at the end of last week, QE may have only softened the inflationary blow over the past months. The Fed has a partner in crime, the US Treasury, and the Washington establishment. If central bank liquidity is at an all-time high, fiscal stimulus is off the hook. Stimulus in the trillions has only exacerbated rising inflation. The price tag for the monetary and fiscal accommodation since the pandemic began is growing by leaps and bounds as it eats away at money’s purchasing power, the classic definition of inflation. COVID-19 may be fading into the rearview mirror, but its legacy will remain an inflationary danger for many years to come. Conflicting signals for the bond market cause a bounce The Fed will meet this week for its June FOMC meeting. So far, the only thing the central bank has said is that it is “not thinking about thinking about” tapering the QE program or increasing the Fed Funds rate to address rising inflationary pressures. The unemployment rate at 5.8% and core inflation at the highest level in decades are conflicting data for the central bank. Meanwhile, the administration and Congress keep spending with some politicians demanding even more stimulus and programs. The bond market found a bottom in late March and has been recovering. The pattern in the September long-bond futures contract illustrates a series of higher lows and higher highs since it traded at 152-16 on March 18, 2021. The latest high came last week at 159-29. The bond market did not sell off after the latest CPI data, but it did rally on the weak employment numbers. The bond market may have gotten ahead of itself in March when it fell to the lows. Speculative shorts pushing the long bond futures lower appear to have run out of patience and covered risk positions. However, if the Fed remains on its same accommodative path with help from the government’s tsunami of fiscal stimulus, the rally in bonds is likely to run out of steam sooner rather than later. Jackson hole could bring another shift The Fed Governors, economists, and others gather in Jackson Hole, Wyoming, each August. Over the past years, policy shifts have often created fanfare during the event. We could see the Fed begin to guide that QE tapering is on the horizon later this year or early 2022. Economic conditions and rising asset inflation make a shift towards tightening monetary policy logical as vaccines have created herd immunity to the virus, and conditions have not only improved but are robust. However, if the central bank decides that it needs to keep the accommodative policy in place because of the unemployment rate, it will only pour more fuel on an already burning inflationary fire. Expect lots of volatility in the bond market over the coming weeks and months. Increased price variance creates a nightmare for passive investors, but it is a paradise for nimble traders with their fingers on the pulse of moving markets. The bond market could be the Garden of Eden for traders over the second half of 2021 and beyond. The bond market is ground zero for the free market’s battle with the Fed and Treasury. Since August 2020, the bond market has been fighting the Fed and winning. Sign up for the free Monday Night Strategy Call using the link below! Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
CBOT:ZB1!
by Andy_Hecht
7