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Inflation

EUR/USD edges lower as eurozone inflation slidesEUR/USD is slightly lower on Friday. In the European session, EUR/USD is trading at 1.0883, down 0.21%. The euro continues to look sharp and is poised to record its fifth winning week in a row. Eurozone headline inflation fell sharply, but the core rate ticked higher. In the US, the Core PCE Price Index was within expectations. ECB policy makers must be pinching themselves today, after eurozone headline inflation tumbled to 6.9% in March, down from 8.5% in February and below the 7.1% estimate. The massive drop was driven by the sharp decline in energy prices. Inflation hasn't been below 7% since February 2022, but the news was not all good, as March core inflation accelerated to a record 7.5%, up from 7.4% in February. Core inflation is seen as a more accurate gauge of inflation trends, which could spell trouble for the ECB in its battle to contain inflation. The ECB didn't flinch from hiking rates by 50 basis points earlier in the month, even though it was in the midst of the banking crisis. With core inflation remaining stubbornly high, the central bank will have to remain aggressive with its rate path. ECB President Lagarde has suggested that the banking crisis, which shook the financial markets, could dampen demand and lower inflation, but so far, that hasn't been the case with core inflation. What can we expect from the Federal Reserve? Market pricing has been on a roller-coaster. It was only a few weeks ago that Jerome Powell's hawkish testimony on the Hill had the markets expecting a 50-basis point hike, but the banking crisis squelched any thoughts of an oversize hike. The likelihood of a 25-bp hike is currently at 57% and a pause at 43%, according to the CME Group. The core PCE price index dropped to 0.3% m/m in February, vs. 0.5% in January and the estimate of 0.4%. On an annualized basis, the index ticked lower to 4.6%, in February, vs. 4.7% in January, which was also the estimate. This is within expectations and thus unlikely to have any impact on the Fed rate decision. EUR/USD showed little reaction to the release. EUR/USD faces resistance at 1.0916, followed by 1.1072 There is support at 1.0774 and 1.0618
by OANDA
GBPJPY Technical Analysis 31.03.2023 1h chart– Previous Daily candle closed Bullish at 164.230 above Daily Resistance formed on 28th February 2023. – Buys on close above 164.470 targeting Weekly previous Support formed on 5th December 2022 at 164.470, Leaving Runners to the 1h previous Support formed on 28th February 2023 at 165.420. – Sells on close below 163.930 targeting 1h Support at 163.560, Leaving Runners to the 4h Support formed at 163.200. – As the Monthly candle coming to a close it is highly recommended to wait for strong confirmations and volume sessions before taking any positions.
by SalimFX20
A 3 year-sized F. Bull FlagSilver gives the main message on the chart. While financial powers shifting from west to east, all the precious metals will be very important to state the power of any currency like in the old days. No more money printing like no more tomorrows. Otherwise the money will turn to a meaningless paper due to inflation. Gold is already shining but silver, oh my silver. When we break this f. bull flag, we will see 26 and 32 quickly. Silver will move way faster than gold. Look at the XAUXAG ratio. Historical median point is around 32 where it is above 80 nowadays. Stock your precious metals at home, buy more rings to your significant one or get some silver spoon and forks. The real money will take the power again! Disclaimer – WhaleGambit. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
OANDA:XAGEURLong
by WhaleGambit
USD/JPY steadies after taking a tumble, Tokyo Core CPI loomsUSD/JPY is posted gains on Thursday after dropping sharply a day earlier. In the North American session, USD/JPY is trading at 132.45, down 0.31%. Later today, we'll get a look at Tokyo Core CPI, a key inflation measure. Wednesday was a day to forget for the Japanese yen, which lost 1.5% against the US dollar. USD/JPY touched a high of 132.89, its highest level in a week. The US dollar was broadly higher on Wednesday and a rise in US yields helped propel USD/JPY to even higher levels. US 10-yr and 2-yr Treasury yields both hit weekly highs, and the widening of the US/Japan rate differential is weighing on the yen. The banking crisis has eased somewhat, with no spreading of contagion since the stunning collapse of four US banks and Credit Suisse earlier this month. The markets are calmer, risk appetite has improved, and investors have moved away from the safe-haven yen in favour of riskier assets. Japanese inflation indicators have been pointing downwards and the markets will be keeping a keen eye on the March Tokyo Core CPI release later today. The February release showed a sharp drop in inflation, from 4.4% to 3.4%, but the decline was not all that surprising, as government energy subsidies kicked in last month and dampened inflation. Other core CPI indicators also eased in February. The March Tokyo Core CPI is expected to continue falling, with an estimate of 3.1%. Japanese inflation releases are closely watched, as higher inflation could force the Bank of Japan to pivot its ultra-loose policy. The central bank has insisted that the high inflation is transient and it expects inflation to fall to 2% later this year. The BoJ has said it would consider tightening policy only if there is evidence that inflation is sustainable, such as stronger wage growth. Japan's labour unions won substantial wage hikes earlier this month, and time will tell if wage growth kick-starts the weak economy and leads to higher inflation, which could force the BoJ, under new management, to reassess its easy monetary policy. USD/JPY is testing support at 132.60. Below, there is support at 131.12 133.75 and 134.48 are the next resistance lines
by OANDA
AUD/USD - Aussie falls as inflation dipsThe Australian dollar is trading at 0.6670 in Europe, down 0.57%. Australian inflation was lower than expected, raising speculation that the Reserve Bank of Australia might pause at its April meeting. Australia's inflation rate for February eased to 6.7% y/y, down from 7.4% prior and the 7.2% estimate. It may be too early to declare that inflation has peaked, but there's no question that inflation is heading in the right direction. That is good news for businesses and households, which have been hurt by the double-punch of high inflation and rising interest rates. The unexpected sharp drop in inflation likely has cemented the RBA pausing at the April 4th meeting, and that is weighing on the Australian dollar today. RBA Governor Lowe had said that this week's retail sales and inflation releases would be key factors in the rate decision. Retail sales slowed to just 0.2% m/m in February, down from 1.2% prior and shy of the estimate of 0.4%. Weak consumer spending and falling inflation point to the economy slowing, and the RBA will likely respond with a pause, which would be the first since the rate-tightening cycle began in May 2022. The markets have fully priced in a pause at next week's meeting, with a likelihood of around 90%. In the US, higher rates have taken a toll on the housing sector. Pending Home Sales has recorded mostly declines over the past year, as potential home buyers are finding it more difficult to afford a new home. The indicator is expected to come in at -2.9% in February, after an unexpected jump of 8.1% in January. AUD/USD is testing resistance at 0.6676. Above, there is resistance at 0.6728. There is support at 0.6565 and 0.6402
by OANDA
Inflation and Business Cycle: What will happen next?Inflation has been rising aggressively since 2021. It accelerated from 2% to hit an all-time high of 9.1% in June 2022. As inflation rose, central banks like the Fed raised interest rates to control inflation . But this effort to control inflation, on one hand made money more expensive for the industries and on the other hand pushed consumers to reduce their spendings. Many economists had already predicted rising inflation and its impeding worst impact on the global economy and stock markets. Still, there are fears everywhere that bear markets could persist and even a further decline is likely. Here the basic question arises that must be understood: WHAT IS INFLATION & WHY DOES IT OCCUR? In fact, inflation occurs whenever demand for goods and services increases while supply remains constrained. Growth is everyone's dream... To capitalize on this aspiration, banks provide cash at low interest rates to support growth, but unfortunately this cash is used by people to buy luxuries like cars, electronics and homes. Cars need fuel and metals, electronics need high R&D spending and skilled human capital, and houses need building materials. Pressure on luxury items leads to price increases. Technically speaking, when demand accelerates faster than supply, it has a net effect on price. This phenomenon is referred to as the law of demand, which states: "If more people want to buy something, when there is limited supply, the price of that thing will be higher." (The same law of demand applies in the stock market: as demand for stocks increases, their price increases.) After Covid-19, global demand for goods and services began to normalize (increase). But to boost growth, which had been severely hampered in Covid times, banks made easy loans available at attractive interest rates. The resulting increase in the supply of money in the markets stimulated consumer spending. Ideally, if growth had been at a sustained pace and in the productive sectors, inflation would not have occurred. But that never happens - a phenomenon that creates the business cycle. A business cycle has phases of expansion and contraction. We are currently in the contraction phase of the business cycle - inflation is still high, interest rates and yields are unbearable, and industrial performance has declined. WHAT WOULD HAPPEN NEXT? - Unbearable prices will force consumers to reduce their spending/demand - High interest rates and reduced demand will reduce industry revenues and profits - Equity markets will continue to show poor performance But good times will come again! When the market bottoms out in the business cycle, expansion begins. This will be an ideal time to invest in growth and value stocks.
ECONOMICS:USIRYY
by starringinvestors
Federal Reserve Balance Sheet Projected to Exceed $19 TrillionWave structures on these Economic Indexes tend to play out fairly often, such as in the case for Various CPI and Interest Rate Charts which can bee seen in the Related Ideas tab below. With that in mind, I now turn to The Federal Reserve Balance Sheet; and when I look at the Balance Sheet what I see is that since the Inception of this chart, it has traded within an Equidistant Channel that can be easily viewed and plotted in Log scale. When I look deeper into this I can also see that since around the end of the 2008 GFC when mass bailouts occurred, the RSI on the Balance Sheet has typically stayed Elevated and Above the Bullish Control Zone: meaning any time spent below the level of 70 has typically been followed by insane expansionary rallies, thus huge continuations in the rapid increases of the Balance Sheet. Additionally, it can also be seen that as of recent times (notably since the mid 2010s) the MACD has become a great indicator in the form of Hidden Bullish Divergences appearing just before huge continuations to the upside; these mid 2010 events align with the blunder that were the taper tantrums in which the fed ultimately capitulated on their monetary tightening stance and decided to expand the Balance Sheet Exponentially Higher and now looking at the chart we can see yet another Hidden Bullish Divergence forming that will be confirmed at the close of the month after the next trading week signaling that another big wave up is about to begin. Lastly, when zooming all the way out and taking in all the data at once, it can be seen that we are in what looks to be an AB=CD wave structure in which the first expansion was a 400% Expansion and the Current Expansion is on the way to being yet another 400%. We are currently about halfway there and the AB=CD Wave Structure would suggest that the Federal Reserve will more than double it's Balance Sheet by 2026 as the Federal Reserve capitulates yet again in an attempt to save the current fragile economic system.
FRED:WALCLLong
by RizeSenpai
3
Inflation dominates financial stability risks for central banksDespite the banking industry turmoil, central banks continued to raise rates last week. This marked moves from the European Central Bank (ECB) by 50Bps, Federal Reserve (Fed) by 25Bps, Bank of England by 25Bps, Swiss National Bank by 50Bps, Norway by 25Bps, the Philippines by 25Bps, and Taiwan by 12.5Bps. Central banks appear determined to show they have the tools in place to nip financial stability issues in the bud and so monetary policy is free to deal with inflation. The Fed is likely nearly done The March Federal Open Market Committee (FOMC) turned out to be on the dovish side. This was evident in the written statement in which the FOMC anticipates – “some additional policy firming may be appropriate” from “ongoing increases in the target range will be appropriate”. There was a risk that if the Fed chose not to hike rates, it would raise concerns about further financial system weakness. The reason given was that financial instability was "likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation”. The Fed has clearly signalled to the markets that it can control financial contagion from spreading by providing large amounts of liquidity. Over the past weeks we have seen a combination of measures to stabilise the market turmoil, including 1) The Fed’s proposal to provide immediate deposit protection and emergency lending 2) the intervention by Swiss Authorities to merge Switzerland’s two biggest banks and 3) the resumption of a dollar swap facility among central banks. If the banking crisis calms down and the economic data looks anything similar to the January/February reports, another rate hike at the May FOMC meeting should not be ruled out. Conversely, ongoing market dislocations could outweigh the data and push the Fed into pause mode. Currently the implied probability for Fed Funds Futures looks for a rate cut during the summer. That scenario can only materialise if the risks emanating from the banking system continue to deteriorate from a market and/or economic perspective. Gold offers a potential investment solution There is no doubt that the investment landscape is fraught with elevated uncertainty and, of course, the volatility that comes with it. Gold is benefitting twofold from its safe haven status alongside the earlier than expected pivot in monetary policy by the Fed. While the Fed does not currently see rate cuts this year, in contrast to market expectations, its projections raise the prospect of rate cuts for 2024 which remains price supportive for gold. The Commodity Futures Trading Commission (CFTC) has now largely caught up with publishing futures positioning data for gold following the disruption in February due to a ransomware attack on ION Trading. We now know there was a slump in positioning during February, but net longs in gold futures rose back above 154k contracts on 14 March 2023 as the banking crisis was unfolding. Laying an emphasis on quality stocks Rising concerns about financial stability tends to cause negative feedback on the real economy. Quality has stood the test of time, displaying the steadiest outperformance over 10-year periods. Dating back to the 1970s, quality has displayed the highest percentage 89% of outperforming periods in comparison to other well-known factors. The WisdomTree Global Developed Quality Dividend Index (Ticker: WTDDGTR Index) offers investors an exposure to dividend paying stocks in developed markets with a quality tilt. The WisdomTree Global Developed Quality Dividend Index has outperformed the MSCI World Index (Ticker: MXWO Index) by 1.54% over the past five years. The emphasis on quality, by tilting the portfolio exposure to stocks with a high return on equity has played an important role in its outperformance versus the benchmark. Over the past five years, we also observed the allocation and selection of stocks within the information technology, financial and healthcare sectors contributed meaningfully to the 1.54% outperformance versus the MSCI World Index as highlighted below.
FRED:FEDFUNDS
by aneekaguptaWTE
#BOND crisis to fuel monetary expansion The Fed is damned by inflation if they print, damned by bank runs if they dont print. And with recession on the way, history shows we could plumb to new lows if the Fed only prints enough to backstop banks and pensions. Early 2000s and early 1930s were two such cases where the Fed aggressively lowered rates for well over 18 months but markets continued to trend lower anyway. But 2008 ushered in central bank quantitative easing, so with QE at the Fed's disposal, it is more likely the growth of M2 will accelerate which will keep inflation stubbornly high if not higher. A new factor that wasn't present before is that we have increasing M2 from China and Japan which has been a large driver of the market bounce we've seen in stocks and crypto since the start of the year. The 2-yr and 10-yr rates are heading lower in a hurry. CME Fed futures currently predicts one more 25 bps hike to a terminal rate of 500-525 then three consecutive drops of 25 bps. Higher inflation would become the standard as the Fed would be forced to accept a higher inflation target well above 2% which Ray Dalio had predicted in one of his published pieces.
FRED:WALCL
by BallaJi
USD/CHF - Swiss franc climbs higher, SNB meeting eyedThe Swiss franc continues to rally and is trading in North America at 0.9139, down 0.37%. USD/CHF has fallen some 200 points in just one week. SNB goes for oversize hike The Swiss National Bank raised rates by 50 basis points today, bringing the cash rate to 1.50%. It was a toss-up whether the SNB would raise rates by 25 or 50 bp, and in the end, policy makers opted for the larger increase. There were strong reasons to support either move. Swiss inflation jumped to 3.4% in February, its highest level since 1993. Although these levels are very low compared to other major economies, inflation is above the target of 0%-2% and this supported a 50-bp increase. At the same time, the market turmoil triggered by the bank crisis provided the SNB with an out, if it so wished, to opt for a smaller 25-bp hike. SNB head Jordan said after the rate decision that the UBS takeover of Credit Suisse had averted a financial disaster, not just for Switzerland but for the global economy. Jordan warned that it was critical that the merger take place in a smooth manner in order to maintain financial stability. The SNB has been busy lately, providing $53 billion for the takeover and signing on to a coordinated move by six central banks to boost liquidity. The Federal Reserve raised rates by 25 bp on Wednesday as expected, but the move was a "dovish hike". The Fed changed the language in the rate statement, stating that tighter policy "may be appropriate", compared to "will be appropriate" in the previous statement. The dot plot chart indicated a forecast of a terminal rate of 5.1% for the end of 2023, unchanged from December. The Fed's battle against inflation, which is showing results, hit a snag due to the recent bank crisis which sent the markets into turmoil. The Fed made reference to the crisis in the rate statement, stating that, "The US banking system is sound and resilient", but added that it was uncertain how the fallout of the crisis would impact the economy and inflation. ECB President Lagarde said this week that the banking debacle could help curb eurozone inflation, and the same argument, I suppose, can be said about inflation in the US. The recent turmoil in the markets means that the Fed's rate path is unclear. With inflation still high, there is a need for additional tightening, but at the same time, tighter policy could worsen the stress on the banking system. The markets are expecting the current tightening cycle to end soon, with a pause and rate cuts to follow later in the year. . USD/CHF is putting pressure on support at 0.9110. The next support level is 0.8935 0.9226 and 0.9304 are the next resistance lines
by OANDA
7
Hyperinflation WARNING ! 🚨🚨🚨⏰Now that I have your attention. I would like to discuss the history of hyperinflation and explore certain aspects of it to enable more informed decision-making in trading and investing. Hyperinflation is a situation in which the general price level of goods and services in an economy rises rapidly and continuously, often by more than 50% per month. History of hyperinflation During World War I, many countries printed large amounts of money to finance their military expenses. This led to a significant increase in the money supply, but after the war ended, the demand for goods and services declined sharply, leading to a mismatch between the amount of money in circulation and the supply of goods and services in the economy. As a result, many countries experienced hyperinflation, with prices rising rapidly and continuously. For example, in Germany, the hyperinflation crisis of 1923 saw prices double every two days, with the value of the currency ultimately collapsing. This was caused by a combination of factors, including war debt, loss of productive capacity, and excessive money printing. During and after World War II, several countries experienced hyperinflation again. Some of the countries that experienced hyperinflation throughout this period include: Germany: During World War II, Germany again experienced hyperinflation due to the massive amounts of money printed to finance the war effort. Hungary: In Hungary, hyperinflation occurred after the end of World War II due to the government's attempts to finance the reconstruction of the country, combined with a lack of goods and services. Poland: Poland experienced hyperinflation after World War II as a result of a combination of factors, including wartime destruction, Soviet occupation, and economic policies that led to a decline in production. Greece: Greece experienced hyperinflation in the aftermath of World War II due to political instability and a lack of economic resources. China: During the Chinese Civil War, hyperinflation occurred due to a combination of factors, including wartime destruction, a lack of resources, and the printing of large amounts of money. These countries experienced hyperinflation due to various reasons such as war, destruction of infrastructure, political instability, and printing of excessive amounts of money to finance government expenditures. The resulting hyperinflation led to a decline in living standards, widespread poverty, and economic instability. Upon reviewing a brief history of hyperinflation, it is reasonable to expect cyclical patterns, although these may not be exact, they can be quite similar or closely related for the future. Key factors to look for before hyperinflation occurs Rapid money supply growth: Hyperinflation is often triggered by excessive money creation by the central bank or government, leading to a rapid increase in the supply of money in circulation. Unsustainable fiscal policies: Large budget deficits, high levels of government debt, and unsustainable spending policies can also contribute to hyperinflation. Political instability: Hyperinflation can also be triggered by political instability, such as a war or revolution, which can disrupt economic activity and lead to a loss of confidence in the currency. Collapse of the banking system: If a country's banking system collapses, it may be unable to provide the credit necessary for economic growth, which can lead to hyperinflation. Loss of confidence in the currency: When people lose confidence in a currency, they may rush to exchange it for another currency or for tangible assets, such as gold or real estate, which can lead to hyperinflation Currently, we are observing indications of cracks in the system, but we have not ticked all the boxes just yet. While we may be witnessing some of these events, they are not yet occurring on a scale significant enough to result in hyperinflation. It is possible that we may encounter some events of inflation panic before hyperinflation truly comes to fruition. Many respected traders are providing specific dates or timeframes for when the economic collapse may occur. However, it is important to note that most of the time these predictions are off the mark when it comes to timing. It is also important to remember that as a trader, you are essentially betting against those traders who are also betting against you. Thus, it is important to conduct thorough research and analysis before making any decisions. Undoubtedly, inflation is on the rise; however, it is crucial to approach the situation objectively and without emotional bias. It is likely that some of us may make hasty and panic-based decisions in response to the inflationary environment, but those of us who remain level-headed and well-informed may be better positioned to make sound decisions Should I buy and hold Bitcoin or Gold? While it may appear reasonable to assume that prices will continue to rise indefinitely in an inflationary or hyperinflationary environment, the reality is often more complex. In fact, prices can experience whiplash in both directions, as seen in the example of gold depicted in this chart. Note the pattern of rising highs and lows. This pattern may look familiar to those who follow Bitcoin, which has also experienced volatile price swings in both directions. As market conditions evolve, investors and traders must exercise caution while implementing sound strategies to safeguard their financial portfolios. As the market is bound to experience periods of panic in the future, it would be wise to proactively assess your portfolio and take or re-allocate profits accordingly. By adopting a dynamic approach that is responsive to evolving market conditions, you can position yourself for success in an environment of heightened volatility. Thus, it is essential to remain nimble and adapt to changing market conditions to minimize risk and maximize returns.
COINBASE:BTCUSDEducation
by UnknownUnicorn45342505
4
The story of a hawk and a dove in GBPJPYHey everyone. Welcome back to another forecast, this time on GBPJPY. This will be for the future outlook of GJ and where it can possibly head to. BOE hiked rates by 50 bps in its previous monetary meeting and market has priced in a 25bps rate hike in today's monetary policy meeting of March. However, the story of the hawk does not end here as its latest CPI y/y printed whopping 10.4% compared to a 9.9% forecasted. This really shows the stubbornness of the inflation that the POUND is facing. This makes their upcoming meeting a complicated one and the market could potentially price in a 50bps hike instead. This paves the way for more rate hikes if inflation were to remain sticky and stubborn. A hawk remains a hawk to come for the coming months. On the other side of the universe, BOJ has remained through to their stance and stuck by with a -0.1% short term interest rates and for 10 year bond yields at 0% during its month of March. It remains steadfast in its approach and the interest rate differential between POUND and YEN cannot be missed. JPY's inflation has however been rising at a steady rate, with the latest printing at 4.3%, yet it's widely expected that the BOJ remains dovish , especially after the multiple opportunities to hike rates but deciding against them. In my opinion, the story of the hawk and the dove continues to be the case for the upcoming weeks in GBPJPY and that is one of the reasons I believe that GJ is a bull story. On a technical front, I believe price can continue up to create a newer high and flirt the highs at 165. The BOE's monetary policy will be key to seeing if the hawk shall continue flying well above the dove. Long story short, GBPJPY bulls . Let's see.
Long
by Jon_Jones_Junior
GBP/USD - Pound steady, inflation expectations easeThe British pound is in positive territory on Tuesday. In the European session, GBP/USD is trading at 1.2277, up 0.50%. For Bank of England policy makers, the "how not to start the day" manual likely included inflation climbing higher. That was the bad news earlier today, as UK headline CPI rose to 10.4% in February, reversing the deceleration trend in recent months. The reading was up from 10.1% in January and above the consensus estimate of 9.8%. The core rate climbed to 6.2% in February, up from 5.8% prior which was also the estimate. The usual suspects were at play, with the food and energy prices driving the increase in inflation. The inflation print will complicate matters for the BoE, which has hiked rates to 4.0% in a bid to contain inflation. Higher inflation will require further rate hikes, but the fallout from the banking crisis, which has roiled the financial markets, means that central banks will have to tread carefully with rate moves. The BoE is almost certain to deliver a 25-bp hike at the policy meeting on Thursday. In the US, the response to the banking crisis has been swift and decisive, which has helped soothe market jitters after last week's panic. Over the weekend, the Federal Reserve and five other major central banks announced coordinated action to bolster liquidity, and Treasury Secretary Yellen said that the bank system was stabilizing and she would intervene if necessary in order to protect depositors of small banks. The Federal Reserve announces its rate decision later today and after massive shifts in market pricing lately, a 25-bp increase is almost a certainty. What will be of interest to investors is whether the Fed follows the stance of the ECB and avoid any direct signals about future rate moves. GBP/USD is testing resistance at 1.2253. The next resistance line is 1.2324 There is support at 1.2132 and 1.2061
by OANDA
BTCUSD looking to head for BTC$80000+ on MN timeframeGood day traders, There are several reasons why Bitcoin is expected to reach $80,000 in the next 6 to 9 months. Firstly, Bitcoin has been experiencing a surge in demand from institutional investors, who are increasingly recognizing the potential of Bitcoin as a store of value and a hedge against inflation. This has led to a significant increase in Bitcoin purchases from institutional investors, which is expected to drive up the price of Bitcoin in the coming months. Secondly, the recent halving of Bitcoin has reduced the supply of new Bitcoins that are being added to the market. This means that there is less Bitcoin available to be purchased, which is expected to drive up the price of Bitcoin as demand for the cryptocurrency continues to increase. Finally, the ongoing economic uncertainty caused by the the silicon valley bank crash's has led to increased interest in Bitcoin as a safe-haven asset. As governments around the world continue to fight this falling economy, investors are increasingly turning to Bitcoin as a way to protect their wealth and hedge against inflation. This increased demand for Bitcoin is expected to drive up the price of the cryptocurrency in the coming months, potentially pushing it to $80,000 or higher. Lets have a look at the analysis: What we see from the technical analysis is that we've spotted an ABCD harmonic trendhike forming, we recently beat our local resistance (marked R1) and we anticipate BTCUSD to meet our R2 sooner than later. This is a great time to buy BTCUSD seeing that the pprice is still fairly low and promises to meet figures above $100K by the end of this year. Please share your thoughts. Disclaimer NASDAQ Guru offers general trading signals that does not take into consideration your own trading experiences, personal objectives and goals, financial means, or risk tolerance.
BITSTAMP:BTCUSDLong
by Mezzoforte_Privilege
USDCAD Outlook 21 March 2023The USDCAD traded lower through the trading session yesterday as the DXY continued to weaken. The price reversed from the 1.3745 resistance level, down toward the key support level of 1.3650. Today, the Canadian CPI is due to be released and is expected to indicate a slowdown in overall inflation growth with the Median CPI y/y (Forecast: 4.8% Previous: 5.0%) and the Trimmed CPI y/y (Forecast: 4.9% Previous: 5.1%). Recently the Bank of Canada paused on its rate hikes, to allow time for the effects of the previous rate hikes to be reflected. A slowdown in inflation growth would be supportive of their recent decision to pause and could reinforce a continuation of the decision. This could result in some strengthening of the Canadian dollar. The USDCAD is likely to retrace to test the 1.37 round number level and 50% Fibonacci retracement level. However, if the USDCAD breaks below 1.3650, the next key support level would be at 1.3560.
Short
by JinDao_Tai
The FED HAS already pivoted! Who cares what the FED does next?Apologies for the click-baity title, but I did want to get your attention to make (once again) my point that inflation is ON now and that the FED has actually pivoted while many are watching and don't see it that way. Let me explain. Back when the FED started raising rates rapidly I grew worried that at this unprecedented pace of rate hikes, something would break. I stated this all along through each of my post. Foolish people and businesses simply do not have the acumen to hedge against the rapidity of dried-up liquidity in the markets. I did not know the banks would become the first culprit exposed in their foolish investment endeavors. But here we are. Banks are failing because of their own stupidity and guess who gets to pay for it once again? That's right, you and I do through the continued devaluation of our U.S. dollar. "But the dollar's getting stronger", you emphatically retort. Yes. It was. As the FED moved to increase rates in a reactionary manner, as they always are, the dollar did gain strength and is currently fairly strong, relatively speaking. However, things will soon change and many do not even know it as they are focused on the wrong indicator, FED rate hike action and future interest rates. While this is certainly still important, it does not tell the whole story. As you know, I have been calling for a pause or pivot from the FED soon. That pivot has already come. "How so?", you asked. The FED has not articulated strong indicative language regarding a pause or pivot. That's true. But while the banks were failing, the FED did begin to guarantee depositors their money due to 'systemic risks'. I've heard this before (think 2008 and the BIG 3). In guaranteeing depositors their funds, the FED mushroomed its balance sheet by roughly $300 billion dollars last week alone! And this may just be the beginning! Incredible. This is the pivot that I was looking for from the FED. So, while everyone else continues to focus on what the FED will do next in terms of interest rates, savvy investors have already spotted the change and recognize that it's now inflation ON! This subtle (or not so subtle, pending perspective) change in direction correlates with three important thesis points that I have been making all along: That something will break That the FED will pause/pivot That we will see a blowoff top in the US stock market It also aligns with current technicals. As you can observe from the chart above, price action has retested our macro-downtrend line precisely as anticipated, has bounced from there as anticipated, and is currently trending up as anticipated. I do believe this is the beginning of our blowoff top with a price target of US500 to be at or around $5,500 to $6k by early to late fall. Maybe early winter. Timing is difficult. Best to you all, Stew
ULong
by stewdamus
2
Europe is treading a fine line between growth and inflationEuropean equities have ushered in 2023 with a strong rebound, up 7.72%1. Exchange-traded fund (ETF) flows into the European region have risen by US$13bn, in sharp contrast to the US that has seen US$9bn of outflows year-to-date (YTD)as of 27 February 2023. The confluence of China re-opening its economy and prudent management of resources during the energy crisis, alongside better valuations, helped European equities flourish. Essentially, the worst impact from the energy crisis that was priced in for Europe did not end up materialising, thereby improving sentiment. Resilient Q4 2022 earnings season but outlook remains cautious Europe is seeing better earnings growth for Q4 2022, up 8.81%3. The deep value parts of the market – financials, energy, utilities, consumer staples, and healthcare – continue to contribute to positive earnings growth. At the same time, China’s reopening has benefitted cyclical sectors across consumer discretionary and communications which posted the strongest earnings growth up 49% and 38% respectively4. At 8% of sales, Europe has the second-highest exposure to China after Asia-Pacific (ex-Japan). It therefore would make sense to position for a better China macro-outlook in the sectors with the highest revenue exposure to China – semiconductors, materials, consumer durables, energy, and automobiles. We also know Chinese consumers saved one-third of their income last year, depositing 17.8 trillion yuan ($2.6 trillion) into banks, and investors are pinning their hopes on those savings finding their way into Europe’s luxury goods market. Another factor favouring European equities has been European buyback activity which has increased to a record level, with a net buyback spend reaching around 220bn thereby creating an additional yield of around 2%5. This has helped Europe’s total yield (that is, buyback + dividends) outpace that of the US for the first time in 30 years. Headwinds persist from further tightening by European Central Bank (ECB) Euro-area Purchasing Manager’s Indices (PMI) continued their rebound in February reaching a nine-month high of 51, helped by easing headwinds from the energy crisis and resilient consumer spending amidst fading inflation. Headline inflation in the Euro-area for January dipped to 8.6%, showing further evidence that price pressures are easing6. However, core inflation in the Euro-area rose to 5.6%5 from 5.2% in December, highlighting that underlying price pressures continue to remain sticky. The more resilient economic data of late is likely to keep the ECB on a more hawkish monetary path. As monetary policy works with approximately a 10 - 12 month lag, we are yet to see the full impact of the recent spate of tightening. Euro-area M1 growth is down to 0.6%, marking the second weakest reading on record pointing to weaker growth ahead. Furthermore, the Q1 results of the ECB Bank Lending Survey showed Euro-area credit conditions tightening at the fastest pace since 2009. In the Euro-area, moves in M1 growth tends to lead economic momentum by six months. This suggests that tighter monetary policy is leading to reduced credit availability for the real economy. Tailwinds from looser fiscal policy to aid the Euro-area recovery Prior to the Ukraine war, the Euro-area was characterised by relatively tight fiscal policy. However, the shock of the energy crisis drove a shift in fiscal policy. Governments are loosening their fiscal purse strings again, offering significant support to both consumers and businesses amidst the recent energy shock. Government expenditure, as a share of GDP, surged to almost 60% as COVID-19 hit (from just over 45% prior to the virus) and it is now rising again higher than before the pandemic7. The Eurozone budget deficit is now widening and heading towards 4% of GDP. Eurozone government expenditure as a share of GDP in 2022, through Q3, was 3% higher than the average from 2017 to 2019, with revenues up less than 1%. The think tank, Bruegel, estimates that EU economies have set aside €680bn to date to protect consumers from the energy crisis, which comes in addition to the EU Recovery Funds (€750bn from 2021 to 2027) which are now flowing. This is close to 10% of GDP, which excludes the cost of COVID-19 support. The European economy remains caught between tailwinds – loose fiscal policy, easing energy prices, strong labour market, the re-opening of the Chinese economy – and headwinds of a weakening credit cycle in response to tighter monetary policy. Amidst this macro backdrop we expect investors to be more selective as the existing tailwinds should help Europe endure a milder than expected recession.
ICEUS:MPU1!
by aneekaguptaWTE
EUR/USD - Euro heads higher as ECB delivers 50-bp hikeIt has been a busy week for the euro, reflective of the gyrations we're seeing in the financial markets. EUR/USD has bounced back from a mid-week slide and is trading at 1.0661, up 0.46% on the day. In the midst of market turmoil and fears of a full-blown financial crisis, the ECB held its rate meeting on Thursday and had everyone guessing about its intentions. The central bank had strongly signalled it would raise rates by 50 basis points but the bank crisis certainly complicated matters. Credit Suisse shares tumbled by as much as 30% a day before the meeting, weighing on the euro and eurozone bonds. It would have been understandable if the ECB had opted for a 25-bp move due to the market mayhem, but the central bank kept its word and delivered a 50-bp hike, bringing the main rate to 3.0%. Was the 50-bp hike risky in these volatile conditions? Yes, but policy makers may have been encouraged by the Swiss National Bank stepping up and lending Credit Suisse $53 billion, and there was the issue of the ECB's credibility, after President Lagarde had essentially pledged a 50-bp increase. Also, a 50-bp was the strongest medicine the central bank could deliver in the fight against sticky inflation. Inflation may have been knocked out of the headlines this week, but it hasn't gone anywhere and remains the ECB's number one priority. There was good news as the ECB's inflation projections were revised downwards from December. Currently, inflation is expected to average 5.3% in 2023 and 2.9% in 2024, compared to the December estimate of 6.3% in 2023 and 3.4% in 2024. In her press conference after the meeting, President Lagarde was careful not to commit to further rate hikes, saying that rate decisions will be "entirely data dependent.” Still, with inflation well above the 2% target, it's a safe bet that the ECB is not done with the current rate-tightening cycle. 1.0622 has been a key level throughout the week. EUR/USD is testing resistance at this line. Next is 1.0718 There is support at 1.0542 and 1.0446
by OANDA