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Interestrates

USDJPY Breaking Out Of A Triangle USDJPY finally breaks out of a triangle as both SP and US yields rally. Keep in mind that higher Yields are positive for the currency, while risk-on means depreciation of JPY, especially now when BOJ is not ready to take any action on interest rates. Based on their recent statement, they will most likely maintain stimulus in the next few years. Technically I expect USDJPY to see more upside after a completed triangle, so looking for a retest of the 2021, maybe even 2020 highs. JPY crosses are also looking interesting, GBPJPY in particular.
by ew-forecast
GOLD before FEDAs expected GOLD has reached the resistance zone at 1780. Now we are looking for the next move. It all comes down to the FED interest rate decision. Technically speaking it looks like price will continue lower and below the previous lows. However, DO NOT use big lot size before the news! Entries a little after the news will be more confirmed. In case of a downside continuation the first target will be 1735. If price goes to the upside, then the level to look out for is 1810. The best time to enter will be after the news and a close below 1770.
FX_IDC:XAUUSD
by ForexTrendline
30
EURUSD before FED The sideways moves on EURUSD are still there. That's something usual before such an important events. Today we will see if this downtrend will continue or there will be a reversal. That's why a big portion of the players are stepping aside and not getting involved in any positions. We do not recommend to enter any long term trade ideas before the events today. Once we see what happens after the news, that's when we want to look for entries. Any entries before that are based on expectations and carry more risk. There is a higher probability for a downside continuation, but also a big chance for spikes during the news.
by ForexTrendline
10
EURUSD awaiting the FED The most important news for this month are due tomorrow - the FED interest rate decision. Usually, before such a news price is trading sideways and we shouldn't be entering trades with a lot of risk. That's what we're expecting now as well - slow price action which should find it's direction after the news. We are currently looking at a downside direction and that's what we would expect after the news as well. After the news we will have confirmed trading ideas and a confirmed trend as well.
by ForexTrendline
28
EURJPY: a pinbar where you need one!Yesterday price dropped down below 200 EMA to the support zone. Later, it moved back up again closing above EMA and within the previous candle's range. This pinbar has three supportive factors making it more significant than any other. ► It breached 200 EMA, yet it closed above it confirming the dynamic level to be a support. ► Opened and closed within the previous candle's range => the whole downside momentum was completely absorbed within a single candle. ► Interest rates support the bullish narrative although it is 5 years since they were changed. There is also one contrarian point that should be weighed in. Japanese Yen is usually a currency relied upon in times of uncertainty. I think we've got a lot of that lately. Good luck!
Long
by OrcChieftain
Dovish Tapering Locks In QE (08 September 2021)The dovish tapering decision. During its monetary policy decision yesterday, the Reserve Bank of Australia (RBA) kept its cash rate unchanged at 0.10%. As promised, the central bank proceeded with its quantitative easing (QE) tapering plan announced back in the July’s meeting. What came as a surprise is the duration of the new round of QE. Previously, the RBA opted for a two-month QE duration. But during the announcement yesterday, the central bank decided to extend the duration by five months instead. Thus, the tapered A$4 billion QE will run from September until at least February 2022. As a result, the Australian dollar strengthened for a brief period of time before weakening across the board, reflecting the dovishness as a result of the extension of the QE duration. Delta variant still a concern to the RBA. Despite RBA Governor Lowe saying previously that fiscal policy will prove to be more effective than monetary policy in providing aid at the moment, this does not deter the central bank from making a more cautious decision. As explained in the rate statement, the RBA’s decision to extend the QE duration “reflects the delay in the economic recovery and the increased uncertainty associated with the Delta outbreak”. Rate hike remains out of sight. As with the previous meetings, the RBA continues to reiterate that its cash rate will not be increased until inflation falls within the 2-3% target range and this condition will not be met before 2024 based on their current projection.
by GH_Lee
10 YEAR BOND YIELD - Have Interest Rates Bottomed?My count has not changed that much over all the attempts that I have made at finding the right count in this market. Which is why I always ask the question, have interest rates bottomed? I believe once we rise above a couple of key levels mentioned in the video we will have more of an idea. At the same time I find it intriguing how the NASDAQ and Dow Jones both appear to be at an inflection point. I have linked the latest NASDAQ and other ideas below. Remember to use Disciplined Money Management Principles to ensure longevity as a trader. If you don't know the long term pattern shouldn't you be doing your research instead of just following the crowd? Just remember: I am not a financial advisor, I suggest using this only as a guide. Always do your own research.
TVC:TNX
by AriasWave
1
Will FED Taper?Fed tightening 10 year surged to almost 3.2% when Powell tried to tighten this can be seen on the chart below. Now following that measure to tighten you see the S&P fall 20% this miscalculation of the FED to increase rates. Powell was out to pop the equity bubble, but again this miscalculation caused them to stop tightening, and on the chart below you can see this was followed by the cutting of rates. Low growth married to market expecting liquidity has allowed us to see huge growth. We are stuck in the circle of asset growth over strong economic growth.
SP:SPX
by tahirg0010
U-Turn In Rate Hike Decision (18 August 2021)The last-minute decision. During their monetary policy meeting earlier today, the Reserve Bank of New Zealand (RBNZ) carried out a last-minute change in decision, holding its overnight cash rate unchanged at 0.25%. New COVID case in six months thwarted RBNZ’s rate hike plan. Just yesterday, the first local COVID case was reported in New Zealand in six months. As a result, Prime Minister Jacinda Ardern announced a nationwide level-four lockdown with immediate effect. Prior to this new COVID case, the RBNZ was expected to announce a rate hike during today’s meeting as the country’s economic recovery has been robust and the economy is starting to overheat. In the released rate statement, the central bank mentioned that the “ Committee discussed the merits of an increase in the OCR at this meeting and considered the implications of alternative sequencing of OCR changes over time ”. However, with what went down yesterday, the central bank decided to put on hold their rate hike decision, highlighting in the rate statement that the “ decision was made in the context of the Government’s imposition of Level 4 COVID restrictions on activity across New Zealand ”. A delay rather than a setback. New Zealand’s “go hard, go early” approach to the containment of the pandemic has been highly effective as is evident from being one of the first few countries to declare COVID-19 free. With the country’s snap lockdown and effective approach, it is possible that the spread of the virus will be contained within a short period of time and is unlikely going to pose a setback to the country. Moreover, the RBNZ has carried forward their expectation of a rate hike from September 2022 to this coming December as indicated in the quarterly monetary policy statement, delivering a hawkish tone. To conclude, this sudden turn of events is unlikely going to hold the New Zealand economy down for long. As the next monetary policy meeting will be held on 6 October, this will give the central bank sufficient time to make a hawkish return, with the condition that the virus is once again contained swiftly.
by GH_Lee
GBPUSD - basic Interest Rates StudyThis is a simple study of how interest rates influence the market. I included 10 last values in my indicator. The base currency (GBP) is black. The second currency (USD) is red. Between June and December, FED (USD) increased the interest rates 3 times by 0.250 BoE (GBP) also increased the interest rates by the same number but only once. Obviously, this was a catalyst for a major bearish move. Not only that the rates difference had already been bearish at a time. The gap between the rates further increased! But look at the moment when BoE increased their rates. Even if insignificant for the long-term, it started a good counter-trend rally in the short-term. In 2019, FED decreased the rate a few times, hence the difference changed a little in favor of GBP. At look how long the pair grew. It even smashed the previous highs until it resumed its downward trend based on the rate difference. March 2020 was full of interest rate changes across all currencies. When BoE dropped the rate a little (in relative terms), FED decreased the dollar's interest rate rather drastically leading to a more than a year and a half long rally. Although it is losing its steam, it might yet continue for a while. I created two indicators that can be used to study these relations and create a long-term vision once the rates change again (might take a moment to update). You can find them both in the public library :)
Education
by OrcChieftain
1
QE Tapering Plan Will Go On (06 August 2021)Three days ago, the Reserve Bank of Australia (RBA) delivered a little surprise when it decided to stick with its quantitative easing (QE) plan announced back in July despite the recent spike in COVID cases in Australia. (Refer to my post "RBA Sticks With QE Tapering Plan (04 August 2021)" on RBA monetary policy) Details on why the central bank decides to proceed with its decision on QE tapering were provided during Governor Lowe testimony earlier today. Lowe’s Testimony During his testimony before the House of Representatives Standing Committee on Economics, Governor Lowe said that the RBA has considered holding back its plan for QE tapering during the monetary policy meeting. However, the central bank’s positive projections on the economic growth for 2022 permitted the plan to continue. Lowe explained that “any additional bond purchases would have their maximum effect at that time and only a very small effect right now when the extra support is needed most.” Furthermore, he mentioned the RBA felt that fiscal policy would be more appropriate than monetary policy in terms of providing aid at the moment. Nonetheless, the flexible approach of its QE programme allows the central bank to make adjustments to the rate of bond purchases in response to any unexpected turn of events. On the subject of the RBA cash rate, Lowe highlighted that the central bank will not be increasing cash rate until inflation is sustainably in the 2-3% range. He emphasised that the RBA needs to be confident that inflation will remain within the targeted range before any rate hike is considered. Finally, Lowe said that the condition for a rate hike “is not expected to be met before 2024”. RBA economic projections. For year 2021, Australian GDP: 4.00 (4.75) CPI Inflation: 2.50 (1.75) Unemployment Rate: 5.00 (5.00) For year 2022, Australian GDP: 4.25 (3.50) CPI Inflation: 1.75 (1.50) Unemployment Rate: 4.25 (4.50) For year 2023, Australian GDP: 2.50 (N/A) CPI Inflation: 2.25 (N/A) Unemployment Rate: 4.00 (N/A) *Figures shown in parentheses refers to projections from May 2021
by GH_Lee
No Signs Of QE Tapering From The BoE Yet (06 August 2021)The BoE’s decision. As widely expected, the Bank of England (BoE) carried out no change to its monetary policy during its meeting yesterday. Interest rate remains at 0.10% with all eight voting committee members voting for no change. Quantitative easing (QE) remains at £895 billion in total. Michael Saunders, one of the hawks of BoE, voted for a reduction in government bonds purchase by £45 billion. Overall positive outlook of the UK economy in the near future. In the quarterly release of the BoE’s monetary policy report, the central bank said that the “impact of COVID on the UK economy fades further over time” although the Delta variant of the virus continues to spread in the UK. The confidence on the economic recovery led to the central bank’s positive revision of its economic projections. Economic Projections: For year 2021, UK GDP: 7.25 (7.25) CPI Inflation: 4.00 (2.50) Unemployment Rate: 4.75 (5.00) For year 2022, UK GDP: 6.00 (5.75) CPI Inflation: 4.00 (2.50) Unemployment Rate: 4.75 (5.00) For year 2023, UK GDP: 1.50 (1.25) CPI Inflation: 2.00 (2.00) Unemployment Rate: 4.25 (4.25) *Figures shown in parentheses refers to projections from May 2021 The BoE expects the UK economy to return to pre-pandemic level during the fourth quarter of 2021. As with the other major central banks, the BoE also felt that the recent rise in inflation is due to transitory factors. With the ceasing of the UK furlough scheme at the end of September, BoE Governor Andrew Bailey highlighted that unemployment was “no longer expected to rise”. He also mentioned that the challenge for the economy now is whether employers can fill up the job vacancies. On the matter of QE. Little was mentioned on QE during this meeting. The BoE said towards the end of its rate statement that “should the economy evolve broadly in line with the central projections in the August Monetary Policy Report, some modest tightening of monetary policy over the forecast period is likely to be necessary to be consistent with meeting the inflation target sustainably in the medium term”. The committee members also intend to start unloading the bond purchased by the central bank when interest rate has risen to 0.5% and will consider to do so actively when interest rate is at least 1%. According to the BoE, interest rate is projected to be at 0.5% by the third quarter of 2024. Hence, it is likely that the central bank will be holding on to its purchases at least in the near future. Interest Rate Projection: 2022 Q3: 0.2% 2023 Q3: 0.4% 2024 Q3: 0.5%
by GH_Lee
🔥 Strong fluctuation on gold today! Be ready! This is what we said in our analysis on EURUSD from earlier today about the FED Interest rate decision: "Today is the FED Interest rate decision. This is the most important event right now. Based on that we will see certain moves in the market. That's why we will wait for it in order to see in what direction we want to trade. The question is not if there will be change in the interest rate - there won't be! The question is when is that expected to happen in the future. The comments following the news are even more important and they will definitely cause some big moves. Right now, no one knows what will happen, what will be said and how it will affect the market. That's why in moments like this the market is quiet. We prefer to stay away from trades before the news but to spend more time analysing. If you don't want to be exposed to too much risk, then I suggest you wait." The news regarding he USD also affect price on gold and that's why we expect volatility in price here as well. It is possible to see market up at 1820, however until price is below previous highs we're going to be expecting a downside move. If price quickly gets up to 1820 and it then rejects that level, then we could be looking for aggressive entries. Whatever the case is, be prepared for some big moves and don't exceed your risk limit. 👍 Please support this idea with like and comment so we can help more people together. Thank you in advance! 🙏
FX_IDC:XAUUSD
by ForexTrendline
51
EURUSD before FED. What do we expect? Today is the FED Interest rate decision. This is the most important event right now. Based on that we will see certain moves in the market. That's why we will wait for it in order to see in what direction we want to trade. The question is not if there will be change in the interest rate - there won't be! The question is when is that expected to happen in the future. The comments following the news are even more important and they will definitely cause some big moves. Right now, no one knows what will happen, what will be said and how it will affect the market. That's why in moments like this the market is quiet. We prefer to stay away from trades before the news but to spend more time analysing. If you don't want to be exposed to too much risk, then I suggest you wait. Those are the key levels that we will be watching out for. We now have a higher low and a higher high. This is a sign for an additional upside move. In such a case the level that we will be looking for is 1,1880. Looking to the downside the first support is at 1,1777. Price closing outside any of those levels will give us a clear picture of what to expect, but we will be commenting on that tomorrow.
by ForexTrendline
18
📈EURUSD awaiting the FED decisionWe are waiting for FED's interest rate decision tomorrow. This is the most important event right now. Based on that a lot of trades are being taken and future moves are being determined. That's why we recommend to not trade before such an important news. Once we have a clear market direction, that's when we want to get involved. What are the expectations and more likely scenarios? EURUSD is still in a downtrend. As long as the pair doesn't go above 1,1880 that will remain unchanged. Also, it's very likely that we will see price reaching 1,1840-50. This is an entry opportunity using a low risk. If you will be doing that then make sure to wait for a push of the level and a reversal candle! Everything will be clear after the news, therefore if you don't want to take on unnecessary risk just wait! 👍 Please support this idea with like and comment so we can help more people together. Thank you in advance! 🙏
Short
by ForexTrendline
6
ECB Meeting And Its New Inflation Target (23 July 2021)New monetary policy strategy. Earlier this month, the European Central Bank (ECB) reconvened its policy review that was postponed since last year due to the COVID-19 pandemic. During the review, the central bank revised its current goal of achieving an inflation level of “below, but close to 2%” to the new goal of achieving 2% inflation with overshoots allowed. This new inflation target is symmetric, meaning to say that inflation falling below or rising above the 2% target are both equally undesirable. However, knowing that it is unlikely inflation will be constantly maintained at the 2% target, slight deviation from 2% temporarily is still acceptable by the ECB. But if inflation were to deviate from that target by a significant amount for a sustained period of time, the central bank will carry out the necessary actions to address it. Revised forward guidance. During the monetary policy meeting yesterday, the ECB held its interest rate and quantitative easing (QE) unchanged. The central bank’s President Christine Lagarde said that no discussion on quantitative easing was carried out. In response to the newly adopted inflation target, the ECB has revised its forward guidance on interest rates. “In support of its symmetric two per cent inflation target and in line with its monetary policy strategy, the Governing Council expects the key ECB interest rates to remain at their present or lower levels until it sees inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realised progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at two per cent over the medium term. This may also imply a transitory period in which inflation is moderately above target.” Simply put, the central bank will consider an interest rate hike only when inflation is seen to be reaching the 2% target way before the end of its projection horizon and is deemed to sustain for the rest of the projection horizon. Based on the ECB’s economic projection material, the projection horizon is defined to be three years. With the revised forward guidance, the ECB is now seen to be more accommodative for a longer duration. Looking at the ECB’s quarterly economic projections released in June, Inflation Forecast 2021: 1.9% 2022: 1.5% 2023: 1.4% we can see that the central bank’s inflation expectation is still quite a distance from 2%. During the press conference, Lagarde also highlighted that the ECB is expecting “inflation to rise over the medium term” although it is still below the 2% target, while “longer term inflation expectations have increased” but are some distance away from the target. Lagarde also mentioned that the recent rise in inflation in the eurozone is largely due to temporary drivers such as higher energy prices and base effects from the strong decline in oil prices. With the persistently low inflation in the eurozone, it is unlikely the ECB will carry out a rate hike in the near future.
by GH_Lee
EURUSD before ECB | What to expect? The analysis from yesterday is going as expected and it confirms the direction that we were looking at. And that gives us an opportunity to look for short positions today! But there are a few conditions! Do not enter a trade now. We're still waiting for ECB interest rate decision. That will cause volatility in the market. It is also very likely that there will be some misleading moves and that will be our moment to make an entry. We are going to be watching out for a certain price reaction in the selling zone and in case we see engulfing candles or long wick candles, then we're going to be looking for an entry. EURUSD should not rise above 1,1880, otherwise this scenario wouldn't be valid! If we see price pushing off of the zone then we could expect another downside move to 1,1700!
Short
by ForexTrendline
34