Get started

Interestrates

$DXY About to Break Out? I mentioned recently on twitter that I am long USDJPY. Not much to say about the dollar, other than it looks like it wants to break out to the upside. Additionally, the macroeconomic tailwinds support a bullish dollar thesis in a couple of ways: 1. The Federal Reserve has been very transparent about their intention to continue to raise interest rates through 2022. Increasing interest rates make the dollar more attractive via the risk-free rate of return. 2. The war in Ukraine: as an added measure towards defeating Russia's war machine, raising interest rates in the US makes exporting dollars to Russia that much less attractive. When I say "exporting dollars to Russia", I am describing a situation in which other sovereign countries who might otherwise be willing to engage in trade with Russia, can now look to the risk free rate of return in dollar-denominated asset classes... so, why would you trade with Russia when you can buy US bonds that pay interest and allow you to stabilize your currency and rebalance your trade policy? 3. Oil prices continue to rise. Russia may pretend to be in control of the market for crude, but so far - this is empty dictatorial rhetoric. 4. Bitcoin continues to deteriorate ( I identified the top in October 2021 ). A stronger dollar, resulting from real world economic conditions, will continue to put adverse pressure on Bitcoin and cryptos alike. last, I am now a little unsure on stocks overall. I am *guessing* stocks will continue to drift sideways for now. God bless, -Chief
TVC:DXYLong
by ChiefMacro
Gold Running into ResistanceGold has retraced slightly from highs at 1982. This was the top of a dense patch of levels that began at 1962 or so. We are on the precipice of a vacuum zone to 1999, which is our target if we can break out. However, several red triangles on the KRI have confirmed prohibitive resistance for now. The Kovach OBV is still fairly strong, however, and has not dipped significantly despite the retracement. We should have strong support at current levels, but watch the vacuum zone below 1962 to 1936.
COMEX:GC1!Short
by quantguy
CAD/JPY Buy Set Up - Interest Rate Differentials The Canadian Dollar continues to strengthen against the Japanese Yen as the Bank of Canada continues to aggressively raise Interest rates to fight off high inflation. Japan's domestic inflation is in stark contrast as Japan continues to struggle to hit the Bank of Japan's 2.00% target. I show the historical difference in interest rates on 10Year Government bonds having a big impact on the CAD/JPY exchange rate. Oil accounts for nearly 20% of Canada's exports and commodities make up a large proportion of export income. With commodities prices rallying around the world, the Canadian dollar continues to strengthen as more money comes flooding into the country, increasing the demand for the currency in exchange rates. #Forex #Currencies #Investing #CanadianDollar #CAD/JPY #Interestrates #InterestRateDifferentials
Long
by KayansMarkets
Can Gold Break Higher??Gold has tested higher levels after being confined between 1917 and 1936 for the past few days. We are still holding the broader range between 1895 and 1973 or so. Gold has taken an upswing, but is facing resistance from a dense patch of levels in this price territory. The Kovach OBV has upticked with the momentum, but it is doubtful that momentum is strong enough to break through these levels. In the event of a retracement, watch for support in the value area between 1917 and 1936. A full retracement could take us back to 1895. Otherwise, the next target is 1999.
COMEX:GC1!Short
by quantguy
1
NZDUSD: short before the New Zeland central bank speachOn Wednesday, the New Zeland central bank will speak about the next monetary policy about raising the interest rate: it's been estimated that the probability of a rate hike is 90%. From a technical point of view, NZD/USD seems to be uncertain: it plays around its 200 simple moving average but, lastly, it seems to show strong weakness. If the NZD would cross its support (red line), I expect the price to reach at least 0.66. Target has been found simply from the distance between its high (04/05/2022) and the support line.
Short
by paolodambra1
Volatility Narrows in GoldVolatility in gold has fallen substantially. We have been holding the broad range between 1895 and 1956, which narrowed to 1917 to 1936. Currently, we are in the middle of this latter range, stabilizing around 1925. When volatility consolidates, a breakout is near. Volatility has been consolidating for more than a week now, so a breakout should be imminent. If we break out, watch 1956 as a profit target, if we break down, watch 1895, the upper and lower bounds of the broad range, respectively.
COMEX:GC1!
by quantguy
🔥 Bitcoin & The Federal Funds Rate: An Easy ExplanationEver since the FED has been talking about interest rates, I see questions popping up on social media where investors ask why the federal funds rate (also known as the FED interest rate) is so important for the stock and crypto markets. With this post I'd like to write an easy understandable explanation on what the FED funds rate is and why it is important. What is the FED funds rate? The FED funds rate is the interest rate set by the FOMC (the committee of the FED). This interest rate targets the rate at which commercial banks in the USA can lend and borrow excess money to each other. Higher rates means it's more expensive to borrow money for banks, lower rates make it cheaper. Why is it so important? The FOMC changes the rate in order to control inflation. Higher rates reduce the money supply because money is more expensive to get (borrow), whilst lower rates increase the money supply because it encourages spending. The latter has happened during the 2008 Financial crisis and the more recent Corona crisis. Encouraging people to spend money generally helps the economy. Rule of thumb: if the economy is in good shape, higher interest rates are needed to control inflation. If the economy is in bad shape, lower interest rates will encourage people to spend and can help turn things around. Should I be afraid of it? Generally, no. As seen on the BTC chart above, the only time that the FED has increased the rates it did not have a bearish effect on BTC. However, this was done during a period of lower inflation than we currently have. To combat the current inflation rates, the FED needs to increase the rate at a much faster and higher rate than what we have seen in the past 30 years. During the 1980's the interest rate was set to 20% in order to combat strong inflation, I'd argue the FED has to do that as well if they don't raise the raids much faster this year. The imposed rate hikes of 0.25% every meeting are not enough to reduce the 10% year-over-year inflation. In case the FED decides to raise the rates with big steps (>1% per meeting), this can definitely have a huge impact on the stock- and crypto-markets. It will become much more expensive for banks to borrow (and invest) money since money will become more scarce. There's no immediate danger for the markets. However, if inflation spirals out of control because the FED decides not to act (keep the rates low), they'd have to increase the rates much higher and quicker than everyone anticipates, which will trigger a big sell-off in the markets. In my view, this will be the start of the next crypto bear-market. The FED interest rates are most definitely an interesting, but also difficult topic. If you think that I've skipped an important part, please share your knowledge in the comment section. The more people know about it, the better.
INDEX:BTCUSD
by FieryTrading
88
U.S Dollar Analysis - USD/JPY & EUR/USD In this video, I breakdown why the U.S Dollar is bullish against the Japanese Yen and maintaining its strength against the Euro, as the central bank, ' The Federal Reserve", is raising interest rates aggressively in 2022 to deal with high domestic inflation. This is in contrast to the European Central Bank and Bank of Japan, which have pledged to keep interest rates low, due to low inflation expectations over the coming years. I will show you how Bond yields drive currency markets when rising yields in the U.S pay a premium over Europe and Japan when there is a divergence in monetary policy. Enjoy!
Long
by KayansMarkets
1
Gold Maintains the RangeGold has held the range between 1895 and 1956, that we discussed yesterday. At this time yesterday, we were roughly in the middle of the range, however since then we have started to edge up again. We are seeing notable resistance at 1956, as predicted due to the dense patch of technical levels above between 1956 and 1982. The Kovach OBV is starting to drift higher ever so gently, however the volume is still comparatively low. We will require much more momentum before we can break out either way. If we break down, there is a vacuum zone to 1876, then 1865. A breakout will face resistance from technical levels in the 1950's through the 1970's, but if we can clear these, 1999 is the next target.
COMEX:GC1!
by quantguy
Will the Bond Market Continue to Sell Off??Bonds have reached a relative high at 123'01 to the tick then promptly rejected this level. A red triangle on the KRI confirmed resistance and we headed straight back down to through the 122 handle to finally find support at 121'28. We are currently seeing some support here, confirmed by a green triangle on the KRI. However the Kovach OBV has taken a steep dive south suggesting the bear rout is about to pick up again. If so, the next target is 121'00, then 120'14. If we are wrong, we must break through 123'01 before we can consider higher levels.
CBOT:ZN1!
by quantguy
GOLD: The Short-term Structure Looks Bearish Fed hawkish policy to fight inflation is putting in a high on GOLD. It's also about the speculation of how many hikes may happen this year. However, if FED will suddenly turns out to be less aggressive then this will quickly stabilize the gold prices, but for now, it looks like the current tone will not change so metals have room for more weakness. At the same time I am also looking at DXY that is trying to break out of a triangle and towards 100 level. Have a nice trading week everyone. Grega
TVC:DXYShort
by ew-forecast
Mortgage Rates Explode Higher at Second Fastest Rate in HistoryThe monthly chart for US 30-year mortgage rates is exploding higher at a rate not seen since the 1970s. This chart shows that monthly rates are following the 3rd standard deviation higher, which is an extremely rare rate of increase. The Commodity Channel Index (CCI) is shown at the bottom of this chart. The CCI is a momentum oscillator used in technical analysis primarily to identify overbought and oversold levels by measuring an instrument's variations away from its statistical mean. It is currently at the second highest level ever (on the monthly chart), second only to the 1973 Oil Crisis. That crisis caused a bear market between January 1973 and December 1974 that affected all the major stock markets in the world. It was one of the worst stock market downturns since the Great Depression. The stock market lost 45% of its value during this time. How confident are you that the Federal Reserve will be successful at engineering a soft landing? How do you define a 'soft landing'?
FRED:MORTGAGE30US
by SpyMasterTrades
1
Gold Facing Resistance as it Tries to Break OutGold has encroached upon upper levels from its range between 1895 and 1956. We are currently facing resistance from a cluster of levels in the 1950's and 1960's. This dense patch of levels will continue until the 1970's or so. The Kovach OBV has picked up, and if we can break through all these levels we should be clear to test the 1980's, with 1982 in particular a likely target. If we break down, the former lower bound of our range at 1895 should provide support.
COMEX:GC1!Long
by quantguy