Get started

Interestrates

$EURUSD Correction ImminentFX:EURUSD has been navigating sideways since January amid economic challenges, rising interest rates, and Western economic uncertainties. Approaching yearly resistance at 1.10806, a rebound towards 1.05335 support is expected. By the end of the first financial quarter, a breakthrough of yearly resistance is anticipated, solidifying new support. This aligns with expectations of improved global financial conditions and a revival of consumer confidence. #ForexAnalysis #EURUSD #FinancialMarkets #EconomicOutlook #TradingStrategy #MarketTrends #GlobalFinance #CurrencyPairs #YearlyResistance #SupportLevels #ConsumerConfidence #FinanceNews
Short
by wikitrades
2
Big themes for 2024 – forecasters call a weaker USDIt's that time of year when forecasters get to work and calculate the necessary assumptions to plug into their models to offer year-ahead forecasts. In theory, strategists loath making such calls, but in the investment arena expected returns are important for asset allocation, so economics teams work closely together with FX, bond, and equity teams to make calls for the quarters ahead. Naturally, if any of the many assumptions – such as GDP or consumption - prove to be incorrect it can have important flow-on effects on one’s call on bond yields and the USD, and therefore deriving a future value on equity returns can be challenging. For traders, where a strategist sees the AUDUSD or S&P500 by Q1 or Q2 offers absolutely no information advantage at all – in fact, for some, it can lead to an emotional attachment and a directional bias. This is especially true when we consider that it is the economists/strategists who will alter their forecasts to be closer to the market if there is a big move in that market against them. Where I think a trader can find value (from these calls) is from the thesis behind the calls. Strategy is a key consideration here – for example, a scalper wouldn’t care one bit about the prospects of yield differentials or eroding carry values. But for a swing and certainly position traders the laid-out thesis can help identify upcoming economic, monetary policy or even political trends which can heighten their ability to manage risk and even loosely assist with sizing trades. Looking into 2024, we can see Bloomberg’s survey of opinions in EURUSD, AUDUSD, GBPUSD and USDJPY for the 4 quarters of 2024, as well as the median estimate on central bank policy rates. We can that 2024 is expected to be a year of rate cuts, but it is also expected to be a year of a modestly weaker USD - as always there is a strong dispersion in views. So, why the central theme of USD weakness? Well at a very simplistic basis, the thesis is: • US GDP has been incredibly resilient, but with a decline in personal consumption, we are expected to see the GDP fall to around 0.5% YoY by Q324. The FOMC central forecast of 1.5% GDP by the end of 2024 looks too optimistic and may be revised lower in the March FOMC meeting. • US nonfarm payrolls are averaging around 200k at present, but with a cooling of the labour market, the view is we should see NFPs fall to around 30-50k per month, with some even feeling we get negative prints (i.e. net job losses) by Q324. The unemployment rate is expected to rise gradually to 4.4%. • US Core PCE inflation is expected to fall to 2.6% by Q3 – still above the Fed’s 2% target but the trend and trajectory lower is what matters. • Amid the economic dynamic portrayed above the Fed can cut the fed funds rate, and ease policy to a more neutral setting. • Europe and the UK are recording low growth now, but while the US slows these economies are expected to see modestly better growth in 2H24. • For those who subscribe to the USD ‘smile’ theory, the belief is we would see mean reversion on the right-hand side of the ‘smile’. • China’s housing market and FDI remain a source of concern, but Beijing’s increasingly aggressive policy response to provide liquidity to developers may ring-fence many of the concerns and support GDP around 4.5% to 5% – Europe and Australia stand out as beneficiaries if the market gains greater confidence around China’s many economic risks, and should we see outperformance from China’s capital markets. What makes me cautious about this view? 1. If the Fed cuts rates in 2024, so will most other G10 and EM central banks and presumably at a faster clip 2. The US swaps market is already pricing three 25bp rate cuts by November 2024 and if we consider economics in the UK and Europe, I’d argue it’s the Fed that will be less likely to live up to the level of discounted rate cuts. 3. If the USD is to underperform, realistically we need to ask which currency steps up as a USD challenger…. 4. If not to the US, where will global investment capital flow? Unless the rest of the world improves while we see disappointing US growth and big tech becomes wholly unattractive, will we really see global investment capital headed with conviction to Europe or China? 5. If the US does look like its headed for a recession, global equity markets would most likely trend lower, and credit spreads widen. If the Fed are easing in a period of equity drawdown and higher volatility, then the USD would likely still perform well 6. With Donald Trump proposing a 10% tariff on all US imports, should he become President in November, that policy alone could be a big USD positive. On current polling and according to the betting markets, Trump has a fair chance of capturing the Electoral College vote to return to the White House. 7. The Fed’s balance sheet will likely contract at a faster pace than that of the ECBs. We can go on – however, the fact is traders react to price action and should be humble to changes in price action, sentiment, and cross-asset volatility. This means having an open mind to whatever comes our way in 2024. It is interesting to see the thesis for the direction of FX and rates markets, and maybe that will come to fruition to shape our trading environment. However, so often these calls prove to be wrong, and we are reminded that having an emotional attachment to a future price or direction will serve you poorly as a trader.
PEPPERSTONE:USDX
by Pepperstone
EUR/USD: Trends Amidst Fed Caution and Technical AnalysisThe foreign exchange market, a dynamic arena where currencies engage in a perpetual dance, is currently witnessing notable shifts in the EUR/USD pair. This analysis delves into the intricate interplay of both fundamental and technical factors influencing the Euro against the US Dollar. Against the backdrop of the Federal Reserve's cautious approach to monetary policy and recent technical developments, we explore the potential for a downtrend in EUR/USD. The aim is to provide a comprehensive understanding of the market dynamics, linking the Fed's commitment to interest rate management, the impact of slowing US inflation, and the technical chart patterns that may shape the future trajectory of this critical currency pair. Join us in dissecting the nuances that contribute to the potential downward movement of EUR/USD, with an ultimate target set at 1.05719 by the year's end. Fundamental Analysis: Cautious Fed Monetary Policy: In its recent meeting, the Federal Reserve (Fed) reiterated its cautious approach to interest rate management, choosing not to raise rates. This decision reflects a policy focused on economic stability and vigilance against potential negative impacts. Impact of Slowing US Inflation: The Fed's commitment to raising interest rates only when necessary, particularly in relation to inflation control, indicates a concern for the balance between economic growth and price stability. A slowdown in US inflation could alleviate pressure for interest rate hikes. Euro Strength Amid Dollar Decline: The Euro has strengthened against the US Dollar, partly due to market concerns about a potential decline in the value of the Dollar. Investors may be seeking alternative investments in the Eurozone deemed more attractive. Technical Analysis: Resistance at the November 21 Pivot Point: On November 21, EUR/USD encountered resistance at the pivot point of 1.09594, which represents the highest level in the past three months. Failure to surpass this level can be interpreted as a rejection by the market to push prices higher. Potential Bearish Reversal: Failure to breach the pivot point resistance could signal a potential bearish reversal, especially if followed by further price declines. This may indicate buyer fatigue and seller strength, potentially leading to further declines. Target Price of 1.05719: Aligned with fundamental analysis, the potential decline in EUR/USD could be a response to tighter US monetary policy and the increasing allure of the Dollar. The target price of 1.05719 is considered a realistic level given market conditions and supporting fundamentals. Conclusion: Fundamental analysis indicates that the Fed's cautious monetary policy and the decline in US inflation could provide additional support for Dollar strength. Meanwhile, technical analysis, with the pivot point at 1.09594 as the highest in three months, highlights resistance and the potential for a bearish reversal. This combination of factors forms the basis for considering a short position on EUR/USD, with a target price aimed at 1.05719 by year-end. Monitoring both fundamental and technical developments is crucial for risk management and making informed trading decisions.
Short
by fardycurry
2
Economic Lessons From 2023We entered 2023 with a pessimistic consensus outlook for U.S. economic performance and for how rapidly inflation might recede. As it happened, there was no recession, and personal consumption posted sustained strength. Inflation, except shelter, declined dramatically from its 2022 peak. The big economic driver in 2023 was job growth. Jobs had recovered all their pandemic losses by mid-2022 and continued to post strong growth in 2023, partly due to many people returning to the labor force. When the economy is adding jobs, people are willing to spend money. The key for real GDP in 2023 was the strong job growth that led to robust personal consumption spending. For 2024, labor force growth and job growth are anticipated by many to slow down from the unexpectedly strong pace of 2023, leading to slower real GDP growth in 2024. And there is still plenty of debate about whether a slowdown in 2024 could turn into a recession. Followers of the inverted yield curve will point out that it was only in Q4 2023 that the yield curve decisively inverted (meaning short-term rates are higher than long-term yields). It is often cited that it takes 12 to 18 months after a yield curve inversion for a recession to commence. Using that math, Q2 2024 would be the time for economic weakness to appear based on this theory. Only time will tell. The rapid pace of inflation receding in the first half of 2023 was a very pleasant surprise. Indeed, inflation is coming under control by virtually every measure except one: shelter. The calculation of shelter inflation is highly controversial for its use of owners’ equivalent rent, which assumes the homeowner rents his house to himself and receives the income. This is an economic fiction that many argue dramatically distorts headline CPI, given that owners’ equivalent rent is 25% of the price index. Once one removes owners’ equivalent rent from the inflation calculation, inflation is only 2%, and one can better appreciate why the Federal Reserve has chosen to pause its rate hikes, even as it keeps its options open to raise rates if inflation were to unexpectedly rise again. The bottom line is that monetary policy reached a restrictive stance in late 2022 and was tightened a little more in 2023. For a data dependent Fed, inflation and jobs data for 2024 will guide us as to what might happen next. Good numbers on inflation or a recession might mean rate cuts. Otherwise, the Fed might just keep rates higher for longer. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com By Bluford Putnam, Managing Director & Chief Economist, CME Group *Various CME Group affiliates are regulated entities with corresponding obligations and rights pursuant to financial services regulations in a number of jurisdictions. Further details of CME Group's regulatory status and full disclaimer of liability in accordance with applicable law are available below. **All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
CME_MINI:ES1!Education
by CME_Group
12
DXY Analysis 10-11-23Overnight, Fed Chair Jerome Powell surprised markets with his comments that "the bigger mistake remains not getting rates high enough" and that "the US economy has been stronger than expected". These hawkish comments spurred market anticipation that the Fed is not done with the current rate hike cycle, lead to a sharp increase in the DXY. The DXY broke out of the consolidation, first testing the short-term 50% fib retracement level (105.35) before rising to consolidate just under the 106 round number level and at the 50% fib retracement level from the longer term. While the DXY could retrace briefly to retest the 105.65 level, look for the price to climb and break above the 106 level to trade higher toward 106.25
TVC:DXYLong
by JinDao_Tai
GOLD SELL HAWKISH FEDDear Ztraders, A decline in the price of gold due to hawkish Federal Reserve (Fed) commentary can be understood through the relationship between interest rates, inflation expectations, and the opportunity cost of holding gold. Interest Rates and Opportunity Cost: Gold is a non-interest-bearing asset. When interest rates rise, the opportunity cost of holding gold increases because investors could potentially earn higher returns from interest-bearing assets like bonds or savings accounts. In a hawkish environment, the Fed signals a willingness to raise interest rates to curb inflation or maintain economic stability. As a result, investors may shift their funds from gold to interest-bearing assets, leading to a decrease in demand for gold and a decline in its price. Inflation Expectations: Gold is often seen as a hedge against inflation. When the Fed adopts a hawkish stance, it may be interpreted as a measure to control inflation. If investors believe that the Fed's tightening policies will effectively control inflation, the perceived need for holding gold as an inflation hedge diminishes. Consequently, investors may sell off their gold holdings, contributing to a decline in its price. Strength of the U.S. Dollar: Gold is priced in U.S. dollars globally. When the Fed adopts a hawkish stance, it often leads to an appreciation of the U.S. dollar. A stronger dollar makes gold more expensive for investors using other currencies, potentially reducing global demand for gold and putting downward pressure on its price. Risk Sentiment and Equities: Hawkish commentary from the Fed may signal a belief that the economy is strong and that monetary policy needs to be tightened to prevent overheating. In such an environment, investors may shift their focus towards riskier assets like stocks, especially if the interest rates on bonds become more attractive. This shift in risk sentiment can lead to a decrease in demand for safe-haven assets like gold, contributing to a decline in its price. It's important to note that market reactions can be complex, and various factors beyond Fed commentary, such as geopolitical events, economic data releases, and global economic conditions, can also influence the price of gold. Additionally, investor perceptions and expectations play a crucial role in determining how markets respond to central bank communications. Greetings, ZTRADES
PEPPERSTONE:XAUUSDShort
by ZILATRADES
3
Real Interest Rate: How It Affects the Economy and Forex MarketReal interest rate is the interest rate adjusted for inflation. Nominal interest rate is the reported rate, while real interest rate is the actual rate that the borrower receives after accounting for inflation. The formula for calculating real interest rate is as follows: Real interest rate = Nominal interest rate - Inflation rate For example, if the nominal interest rate is 5% and the inflation rate is 3%, then the real interest rate is 2%. Real interest rate plays an important role in the economy. High real interest rates can encourage investment and economic growth. Conversely, low real interest rates can dampen investment and economic growth. Real interest rate has a significant impact on the forex market. An increase in the real interest rate will make the domestic currency more attractive to foreign investors. This is because foreign investors can earn higher returns from their investments in countries with high real interest rates. An increase in the real interest rate will cause the domestic currency to appreciate against foreign currencies. This is because foreign investors will increase demand for the domestic currency to invest. A decrease in the real interest rate will cause the domestic currency to depreciate against foreign currencies. This is because foreign investors will reduce demand for the domestic currency to invest. Here are some examples of the impact of real interest rates on the forex market: In 2022, the US Federal Reserve (The Fed) raised the real interest rate. This caused the US dollar to appreciate against other currencies. DXY USDJPY USDDKK USDCNH In 2022, the European Central Bank (ECB) lowered the real interest rate. This caused the euro to depreciate against other currencies. EURCAD EURCHF EURSEK Governments and central banks can use the real interest rate as one of the instruments of monetary policy to influence the exchange rate of the currency. For example, if the government wants to increase the exchange rate of the domestic currency, the government can raise the real interest rate. Real interest rate can be used to predict the movements of currency pairs. Currency pairs with higher real interest rates tend to appreciate against currency pairs with lower real interest rates. Here are the steps for using real interest rate to predict the movements of currency pairs: Collect data on real interest rates from the two countries whose currencies form the currency pair. Compare the real interest rates of the two countries. If the real interest rate of country A is higher than the real interest rate of country B, then the currency pair A/B will tend to appreciate. For example, the real interest rate of the United States is 1.8%, while the real interest rate of Japan is -3.1%. Therefore, the currency pair US dollar/Japanese yen (USD/JPY) will tend to appreciate by 4.9%. Real interest rate is only one factor that affects the movements of currency pairs. Other factors that should also be considered include economic and political factors that can affect the demand and supply of the two currencies.
Education
by DNP-FX
Head & Shoulders on AUDUSDThe AUDUSD fell from the 0.6480 level following the RBA's decision to hike rates by 25bps on Tuesday. The retracement failed to break above the 38.2% Fibonacci retracement level, forming a head and shoulders pattern on the AUDUSD. Anticipating recovery in strength on the DXY, look for the AUDUSD to break below the neckline at 0.6415 to signal further downside, with the next previous swing low at 0.6325 a possible target level. A more conservative sell signal would be to wait for the price to break below the 50% Fibonacci retracement level at 0.6395
by JinDao_Tai
Simple Investing Strategy, Affordable for all!Hey! Everybody wants to get rich. But not many from us know what it takes. In this article let's discuss Investing income from annual percentage yield (APY) . Key point is the percentage of income can be different from your location, but lets make our calculations from 8.0% APY. Why this strategy is Affordable for ALL? Well, for calculation I've used only $161 of monthly investing. I understand for some person this is nothing, and for another it is a lot. But you can calculate your own affordable investing amount per month and use it. Consistency is the key! Another point why its affordable, its because you don't need to have a lot of money at the beginning. You can start from minimal deposit allowed by service/fund/bank (APY provider) where you allocating your funds. Please, note, this is simple and affordable investing strategy. But still THIS IS NOT 100% SAFE STRATEGY... There are several risks of losing your money after all. Mostly this risks depends on APY provider, so I recommend to change your APY provider over a time, and to secure your funds use multiple providers. Let's see how we get this numbers and first of all it is important to keep consistency during all your investment journey. Remember, this way can make you millionaire and can create a fortune for your kids. To understand how this works, let's see what is Compound Interest: Compound interest is the concept of adding accumulated interest back to the principal sum, so that interest is earned on top of interest from that moment on. The act of declaring interest to be principal is called compounding. Financials institutions vary in terms of their compounding rate frequency - daily, monthly, yearly, etc. Your savings account may vary on this, so you may wish to check with your bank or financial institution to find out which frequency they compound your interest at. I used monthly compounding to calculate final value. With savings accounts, interest can be compounded at either the start or the end of the compounding period (month or year). Compound interest formula Compound interest, or 'interest on interest', is calculated with the compound interest formula. Multiply the principal amount by one plus the annual interest rate to the power of the number of compound periods to get a combined figure for principal and compound interest. This formula is base of all interest calculations. To get easier process of calculation, I have used online Compound Interest Calculator. Best numbers we can get if we start investing early, but it happens we see right information too late, and we ask ourselves "Is it good time to start?" — I can say for sure, YES! Always good idea to start investing in your savings account. Trading is trading, but investing is a little different. You can invest in markets, or in savings accounts. Now let's see "worst case" — you starting your investing journey at 40 years old. How much you can earn on savings account until 60? I have calculated it with calculator, and used only $161 investments/savings per month with APY of 8%. You can see after 20 years of savings this amount of money (pretty much affordable for many people out there) you will get about $95,464 Final Value. Very impressive. Imagine if you can save more from your income each month... For example if you can save $1000 monthly, you will get $592,947 Final value after 20 years on your Savings Account. Middle scenario — investing for 30 years on your savings account. Until 60 you can earn solid $241,547 Final value, investing only $161 per month! Now if you can invest about $500 per month from your income you will get amazing $750,147 Final value. And of course best scenario — start investing on savings account early from 20y.o. This way you can get $565,799 Final value by 60 y.o. And if its possible to save more, let's say $250 monthly, you can get $878,570.30 Final value by 60 y.o. So in order to get rich, you don't need to invest a lot of money. Just make you investments consistent, and improve your financial education. Hope this article can inspire you to create your savings account and plan your future. Best regards, Artem Crypto
BITFINEX:BTCUSDEducation
by ArShevelev
126
FOMC Preparation 1st November1st November 2023 DXY: consolidate along 106.70, above 106.90 FOMC decision push to 107.35 NZDUSD: Sell 0.5860 SL 20 TP 60 (dxy weakness) AUDUSD: Sell 0.63 SL 20 TP 60 (dxy strength) USDJPY: Buy 151.55 SL 20 TP 60 (watch out for possible intervention) GBPUSD: Sell 1.2130 SL 25 TP 60 (dxy strength) EURUSD: Sell 1.0545 SL 30 TP 90 (dxy strength) USDCHF: Sell 0.9075 SL 30 TP 70 (counter trend, dxy weakness) USDCAD: Buy 1.39 SL 35 TP 70 Gold: below 1972 could reach 1952 (dxy strength)
TVC:DXY
by JinDao_Tai
2
10 Year wants 5%...at a minimumDo you really need to ask if interest rates have topped out? Head & Shoulders patterns at tops and bottoms are generally spot on...this Inverse H&S pattern occurred at a bottom, clearly broke out from the neckline and just wants 5%...at a minimum. "Don't fight the Fed" The Fed is not going to pivot to the downside anytime soon...why would they? What makes anyone think this is on the horizon? Here are the 3 things Powell stated would need to happen for a pause (not a pivot ) at Jackson Hole: 1. Lower Growth 2. Softening Labor Market 3. Inflation on pace to 2%. 2022 Q2 vs. Q3 GDP came in positive and much stronger than expected, Jobs reports remain hot and inflation isn't anywhere near 2%. So at this point, we can't even check off any boxes for a possible pause in rate hikes let alone a pivot . In addition, Powell hasn't really wavered in his statements since Covid, he's been pretty straightforward, so why would he all of a sudden change his behavior?
TVC:US10YLong
by Vixtine
10
NZD slides against the Japanese YenThe New Zealand Dollar (NZD) is trading bearish against the Japanese Yen (JPY) at 87.386 on Friday, October 27, 2023, following comments from Japan's Chief Cabinet Secretary Taro Matsuno that the Bank of Japan (BoJ) is expected to conduct appropriate monetary policy. Matsuno's comments come amid rising expectations that the BoJ will eventually tighten monetary policy in response to rising inflation in Japan. The BoJ has been maintaining an ultra-loose monetary policy stance for many years, but this has led to a significant weakening of the JPY in recent months. The NZDJPY currency pair has been under pressure in recent weeks as investors have priced in the possibility of a more hawkish BoJ. The pair has fallen by over 5% since the start of October. The bearish outlook for NZDJPY is further supported by the technical outlook. The pair has broken below a key support level at 88.00, and is now on track to test the next support level at 86.50. Factors Weighing on NZDJPY There are a number of factors weighing on NZDJPY at present, including: Expectations of BoJ tightening: The BoJ is expected to be one of the last major central banks to tighten monetary policy, which is putting downward pressure on the JPY. Rising inflation in Japan: Japan's inflation rate has been rising in recent months, which is putting pressure on the BoJ to tighten monetary policy. Global risk aversion: Global investors are currently risk averse, which is leading to a sell-off in riskier assets such as the NZD. Weak New Zealand economic data: The New Zealand economy has been slowing in recent months, which is weighing on the NZD. Technical Outlook for NZDJPY The technical outlook for NZDJPY is bearish. The pair has broken below a key support level at 88.00, and is now on track to test the next support level at 86.50. If NZDJPY breaks below 86.50, it could fall to 85.00 or even lower. Trading Strategy Traders who are bearish on NZDJPY could consider shorting the pair at current levels. A stop loss could be placed above the recent high at 88.00. A profit target could be placed at 86.50 or 85.00. It is important to note that the foreign exchange market is volatile and prices can move quickly. Traders should always use risk management techniques when trading currencies.
Short
by masterclass618
Inflation not down under!Australia's CPI data, released yesterday, showcased figures hotter than anticipated. While this may not be 'reaction-worthy' news on its own, the scenario in Australia is worth delving into for several reasons. Inflation Trends Initially, let's consider inflation trends. In most western economies, although inflation remains above central bank targets, the trends are on a downward trajectory. However, when juxtaposed against those for the European Union (EU) and the United States (US), Australia's (AU) inflation rates on a month-over-month (MOM) and year-over-year (YOY) basis still stick out from the norm. Moreover, yesterday’s CPI prints surpassed consensus on both the YOY & MOM basis, indicating a notable deviation from expectations. In fact, Australia's YOY CPI is now on its longest streak above inflation expectations, and crucially, inflation expectations have ceased revising downwards. Given the higher inflation levels compared to its peers, consensus estimates, and expectations, inflation remains a significant concern for Australia. Interest Rates In the realm of interest rates, Australia has been a long-standing “pauser,” having maintained its policy rate unchanged since its June meeting. This prolonged pause now further opens the leeway to raise rates, especially given the “watch and see” approach adopted towards burgeoning inflation. Additionally, its interest rates remain low compared to the US, EU, Canada, and even New Zealand. As a result, on the real rates basis, Australia trails far behind, with its policy rate still 1.3% behind its inflation rate, significantly less restrictive compared to other economies that have already moved into positive real rates territory. We posit that the RBA is behind the curve and has room to react, given the considerably long period of pause and still negative real rates. The market seems to echo this sentiment too, as the odds for a hike in the next meeting surged post the CPI news, moving from 21% to 55%! Against multiple currencies, the AUD appears to be threading above the long-term support level, a threshold that has essentially defined AUD low. This strong support is expected to hold, given its tested and respected level across multiple currency crosses since 2020. Policy turning points between the two currencies, as indicated by the turn in the interest rate differential, have generally marked the trend change for the currency, notably for the AUDEUR pair. Given the persisting high inflation in Australia compared to various economies and metrics, should market expectations trend in the right direction, it's plausible the Reserve Bank of Australia (RBA) may react with a rate hike. This action could tilt the rate differential and interest for the AUD, bolstering the currency. To capitalize on this bullish view on the AUD, we can consider a long position on the AUDEUR. We can set up this trade via a long position on the CME Australian Dollar Futures and a short position on the CME Euro FX futures to create a synthetic long AUD/EUR position at the current price level of 0.5951, stop at 0.5865 and take profit at 0.615. Given that one CME Euro FX futures is for 125,000 Euros and one CME Australian Dollar Futures is for 100,000 Australian Dollars, this suggest that we should use two Australian Dollar Futures to one Euro FX Futures to match the contract size, given that 125,000 Euros is roughly equivalent to 210,000 Australian Dollars at the prevailing exchange rate. Each 0.00005 increment in the Australian Dollar Futures is equal to 5 USD and each 0.00005 increment in the Euro FX Futures is equal to 6.25 USD. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com melbourneinstitute.unimelb.edu.au www.rba.gov.au www.asx.com.au www.cmegroup.com
ECONOMICS:AUINTRLong
by inspirante
2
BluetonaFX - EURUSD Under Serious PressureHi Traders! Today is a big day for the EURUSD with the ECB's interest rate decision followed by their press conference. The pair is under some pressure and is approaching its yearly low at 1.04485, and we could see that being broken depending on the ECB's decision today.   Price Action 📊 The market recently broke its long-term ascending price channel, and momentum looks to be on the bearish side. The market is also below the 20 EMA. Fundamental Analysis 📰 The Eurozone has shown strong Flash PMI data recently, so traders will be looking for positive statements from the ECB regarding the Eurozone's inflation issues. Support 📉 1.05090: PREVIOUS WEEK'S LOW 1.04485: YEARLY LOW Resistance 📈 1.06946: CURRENT WEEK'S HIGH Risk ⚠️ No more than 2% of your capital. Reward 💰 At least 4% of your capital. Please make sure to click on the like/boost button 🚀 as your support greatly helps. Trade safely and responsibly. BluetonaFX
Short
by BluetonaFX
UK and Canadian Inflation RatesOverview UK and Canadian inflation rates will be released next week. These events could provide insight into whether the Bank of England(BOE) and the Bank of Canada(BOC) decide to raise rates further. The Details As things currently stand, the BOE will likely pause rates, and the BOC will raise rates again. This is in line with the current inflation figures. Next week's inflation figures - Tuesday 17th for Canada and Wednesday 18th for the UK - may give more precise direction to what the BOE and BOC decide what to do next: hike, cut, or pause. August's inflation figure for Canada was 4.00% and 6.70% for the UK. Things to Consider: If September's inflation figures are higher or the same as August's, this gives a greater chance of further rate hikes. Another rate hike from the BOC will likely strengthen the CAD. Another rate hike from the BOE will likely strengthen the GBP. If September's figures are lower than August's, this gives a greater chance of the central banks holding rates and lowering rates in the near future. This will weaken the CAD and GBP. Key CAD pairs could be FX:EURCAD FX:GBPCAD FX:AUDCAD Key GBP pairs could be FX:GBPAUD FX:GBPCAD FX:GBPNZD
by Samuel_Morton_Trader
$DXY & $TNX & Rates show signs of exhaustionThe US #Dollar has pulled back a bit: At MAJOR SUPPORT At Green Moving Avg = Support RSI is at 50 (neutral bullish unless crosses lower) Weekly TVC:DXY is 50-50 The RSI is curling over but the MACD is now above 0 = down trend over Hmmm, interesting scenario Not sure what to make of it Monthly #currency ------------------------------- The 2Yr #Yield broke the recent up trend. While it has performed better than shorter term #interestrates it's gotten weaker recently. The RSI & MACD have been trending lower for some time and it's much easier to see on a weekly! Look @ that Severe Negative Divergence! Could rates be DONE? ------------------------------- The 10 Yr #Yield on the other hand has built good deal of steam lately. Weekly it is overbought. Monthly it's overbought as well. But what is interesting is that the MACD has only been higher 1x than current scenario. MACD histogram lower (arrow) = future MACD neg crossover? However, it's nowhere near as weak as short term #interestrates TVC:TNX
TVC:US10Y
by ROYAL_OAK_INC
EURAUD bullish on dovish RBA Bullish EUR/AUD on Dovish RBA Monetary Policy Reunion The Reserve Bank of Australia (RBA) held its latest monetary policy meeting on October 3, 2023, and decided to keep the official cash rate (OCR) at 4.10%. This was widely seen as a dovish move, as markets had been expecting a 25 basis point rate hike. The RBA's decision was likely influenced by a number of factors, including the recent slowdown in the Australian economy, the ongoing war in Ukraine, and the risk of a global recession. In its statement, the RBA noted that "inflation is higher than expected in Australia and globally, and is expected to remain high for some time". However, the RBA also said that "growth in the Australian economy is expected to slow in the coming months, and the unemployment rate is expected to rise". The RBA's dovish stance is likely to be positive for the EUR/AUD currency pair. A lower OCR in Australia is likely to make the Australian dollar less attractive to investors, while a higher OCR in Europe is likely to make the euro more attractive. In addition to the RBA's monetary policy decision, there are a number of other factors that are currently supporting the EUR/AUD currency pair. These include: The ongoing war in Ukraine, which is weighing on the global economy and boosting demand for safe-haven currencies such as the euro. The risk of a global recession, which is also boosting demand for safe-haven currencies. The European Central Bank (ECB) is expected to start raising interest rates in the near future, which would further support the euro. Technical Analysis From a technical perspective, the EUR/AUD currency pair is currently trading above a key trendline. This suggests that the pair is in an uptrend and is likely to continue to move higher in the near future. The next key target for the EUR/AUD currency pair is the 1.70 level. If the pair can break above this level, it could then move towards the 1.75 level. Conclusion The EUR/AUD currency pair is currently in a bullish trend and is likely to continue to move higher in the near future. This is supported by the RBA's dovish monetary policy stance, the ongoing war in Ukraine, the risk of a global recession, and the ECB's hawkish stance. From a technical perspective, the EUR/AUD currency pair is currently trading above a key trendline. The next key target for the pair is the 1.70 level. If the pair can break above this level, it could then move towards the 1.75 level. Trade Idea Buy EUR/AUD above 1.66 with a target of 1.70 and a stop loss below 1.6356. Risk Warning Trading foreign exchange (forex) is a risky activity and can result in substantial losses. Please ensure that you understand the risks involved before trading forex.
Long
by masterclass618
1
US10Y: Soaring Bond Yields as Federal Reserve Maintains Hawkish The Fed Hawkish Stance During Wednesday's address, Federal Reserve Chair Jerome Powell reinforced his stance on tackling inflation with a more cautious approach. He emphasized that the central bank is not yet finished with its efforts to curb inflation and hinted at the possibility of implementing multiple interest rate increases during future monetary policy meetings. Powell's statement comes as a response to the ongoing challenge of bringing down inflation, which has consistently remained above the central bank's target of 2%. Notably, some Fed officials have emphasized in recent speeches that inflationary pressures persist. They specifically highlight core inflation, which excludes the volatile prices of food and gas, as not decelerating as rapidly as overall inflation. The aforementioned statement supports the potential scenario of higher Government Bond Yields in the future, as an increase in interest rates typically correlates with elevated yields. Technical Analsyis The U.S. government's 10-Year Bond Yield has undergone a retracement, precisely at the 0.5 Fibonacci ratio, establishing a support area. Notably, the yield currently exhibits a bullish trend as it remains above the EMA 200 line, indicating positive market sentiment. Furthermore, the Falling wedge pattern suggests a continuation of the prevailing trend. Complementing this observation, the stochastic line crosses within the neutral area, further bolstering the case for a possible upward movement toward the target area. It is important to keep in mind that once the target/support area is reached, the roadmap provided may no longer be valid. If you find this analysis helpful, I encourage you to show your support by clicking the rocket button and sharing your opinions in the comments section below. "Disclaimer: This analysis is intended solely for educational purposes and should not be considered as a recommendation to take a long or short position on the TVC:US10Y ."
TVC:US10YLong
by financialfreedomgoals101
9