S&P500 - Heading for a 10 - 20 % correctionS&P500 - Heading for a 10 - 20 % correction
The break of the trend line is a significant sign and one of the first signs of market crashes.
Powell
Gold stays on the road to 200-DMA support ahead of FOMCGold struggles for a clear direction, after a three-day south-run, during early Wednesday. Even so, the yellow metal stays on the bears’ radar while keeping the downside break of a 2.5-month-old support line, now resistance, around $1,860 by the press time. Hence, sellers are directed towards 200-day SMA (DMA) level near $1,840 during further downside. However, any more weakness past $1,840 depends upon today’s US Federal Open Market Committee (FOMC) announcements. Among them, a direct hint of tapering and/or rate hikes could be considered detrimental to gold prices.
On the contrary, a positive surprise from the Fed Chairman Jerome Powell & Company will help the quote portray a corrective pullback towards crossing the previous support line near $1,885. Though, gold bulls aren’t likely to be convinced until the quote stays below the yearly resistance line, around $1,908. In a case wherein gold prices offer a daily close beyond $1,908, a run-up to refresh yearly high near $1,960 can’t be ruled out.
ridethepig | NZD for the Yearly Close📌 @ridethepig G10 FX Market Commentary - NZD for the Yearly Close
Here we are tracking the weak points in the structure which are strategically important points in every map. They are usually protected and once broken and be rewarding with non-stop moves. The handle to track here is 0.74xx which is well placed and comes to undertaking other duties of preventing the flow back towards 0.883x.
Now the early strength of this can be seen with the latest breakup, it is a monthly closing in drastic fashion - a veteran soldier ready to march. A breakdown in Dollar for 2021 is a 'good deed' for the rest of the world but actually we will cover a whole chapter around how it is the only monetary option. After a Biden victory we can expect them to rush through a digital dollar and trigger defaults, things will develop quickly so time to start paying attention for the 2021 flows now.
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SILVER - FUEL BY POWELL !!!Powell acknowledges the pressure of inflation and prices, but still calls it transitory. So we have a possible long on metals, and implicitly on Silver. So we can say: GO Silver GO !!!
SCARY DAY ! IF IT'S WEDNESDAY IT'S MAD!
Or
THE BRIDGE OF SighS !!!
The Fed, OPEC, BIDEN, COVID and the outside rain hit the same day. With the slogan roast the pastures, poison the fountains, scare the investors, the Bau Bau group above seems to have brought a total eclipse of daily optimism on the financial markets. From Crypto to metals, they all seem set for declines at today's opening, on the principle "head in the ground, the sword does not cut it", learned from the Service Ostrich. Google alone, the new owner of dream reports, seems to be successfully withstanding this fiery day.
Of course, a lot can change during the day, and especially after each event. But it is important to decrypt Powell and Biden's messages today, faster and better than an SRI did with the Russian spy.
And no matter how hard Powell tries to convince us that the rate is going up, and inflation is transient, the olfactory organ that grows more than Pinocchio is empty. We expect uncertainties until 9.30pm, when Powell's diction can impact indices, metals and of course EUR / USD.
Then comes Biden somewhere late at night, who armed with Tony Robbins 'books, and Houdini's will, will try to fool Congress into cutting a healthy slice of the Americans' ready money cake. I don't think it will succeed, at least not at the level mentioned in the press, but Piata is already more cautious than the law stipulates, only according to rumors. After all, if you ask for a block of flats, to get at least a 10-room villa, it seems like a solid strategy. Let's see where the pot closes.
Until another one, do you remember that suspension bridge through China, where, in addition to the infernal balance, the glass was breaking under your feet !? So is the sensation of the markets today. But just like at that bridge, in the end everything was just imagination, and you were safely at the opposite end.
After today's storm, I predict a quiet morning tomorrow. Green because it's spring. And what could be more enjoyable on a spring morning if not a collectible coffee. And a cigar eventually ... And profit in portfolios. So I'm free today. I let others shake their heads ...
We'll be talking tomorrow when I think we'll have .....
EVERYTHING GREEN !!!
Gold bears looking for a discount (Update)Hey guys,
Bulls defending their breakout this week, with a reasonable weekly close 1771+ (0.236 weekly fibo support) and within the bull channel. This still can develop as a bearflag towards 1680, so bullish caution remains important. Goldbears are known for their sudden & strong moves (they reminded us on Friday).
On the daily we see a nice impulse move to 1798 which retraced to the 0.236 fibo support (1772) and I expect a bullish continuation move next week towards 1805, 1820 and 1830 (0.382 weekly fibo resistance) from this level.
The upside is pretty much capped (for now) by the weekly 50 EMA with a large probability of a bearish reversal from 1820-1830. The green doji weekly candle signalling the next supply zone (strong resistance). Also we have a bearish 3-drive (H4 chart) and a Bearish Gartley waiting for us at that level. In the case of bearish continuation below 1765 on Monday, then we are looking at 1755-1745 support zone as the next cushion (0.618 fibo support).
Looking at fundamentals, we have Uncle Powell to shake up markets on Wednesday with EU GDP & US PCE data planned for Friday. My expectation is that we will have a bullish start of the week, with bulls working themselves up to the 1820 level and a grandfinale run on Wednesday to 1830. On Thursday we should start seeing bearish signals with some end of week & month profit taking to low 1800's.
On the weekly chart, there is a whole bowl of spaghetti in the 1780-1800 zone. It's important for bulls to close the coming week 1800+, else this will make the 1760 support, perhaps even lower, vulnerable for a bearish testdrive. In the case we close the week & month 1800+, bulls will print an engulfing monthly candle with more upside to be expected towards 1850 in May.
Is this the start of the 'rip your face-off' bull rally? We are about to find out next week!
Stay blue 😏,
Cesaro
Xauusd long trade.In this trade I am looking to take a gold above the resistance created at the 1740s in order to go ride the buy to retest the overall resistance created at the 1754.
Japanese yen flirting with 109The Japanese yen is almost unchanged in the Monday session. Currently, USD/JPY is trading at 108.74, down 0.09% on the day.
The Japanese yen remains vulnerable and the symbolic 109 level is under strong pressure. The dollar has had its way with the yen in 2021, as USD/JPY has jumped 5.5% this year. Last week, the pair climbed to 109.36, its highest level since June 2020. The yen is particularly sensitive to rate differentials between the US and Japan, so the increases in US yields are putting strong pressure on the Japanese currency. The 10-year Treasury yield enjoyed another strong week, rising to 1.72% on Friday. Although the 10-year bond has retreated to 1.67% on Monday, the trend remains positive for bonds, which likely spells more trouble for the shaky Japanese yen. This week has more than 100 billion dollars in government bond auctions, which will test the market's appetite for bonds following last week's Fed policy meeting.
In Japan, the equity markets are sharply lower after the BoJ widened its JGB trading band and tweaked its ETF guidance at its policy meeting on Friday. BoJ Governor Kuroda didn't surprise anyone when he said that monetary easing would continue for a long time. The bank has opted to make some tweaks rather than overhaul its monetary policy, and for this reason the bank's inflation target of 2 percent is likely to remain a bridge too far for the foreseeable future. Later, the bank releases BoJ Core CPI, its preferred inflation gauge (Tuesday, 5:00 GMT).
The market will be again paying close attention to the Federal Reserve this week. Later on Monday, Fed Chair Powell will participate in a panel and we'll also hear from FOMC members today and on Tuesday. Powell will testify on Tuesday and Wednesday before Congress, together with Treasury Secretary Yellen. The topic of Powell's testimony is the CARE Act for Covid relief, but investors will be looking for any comments related to higher bond yields or inflation. Any remarks in this regard from Powell or Yellen could shake up the US dollar.
USD/JPY is currently range-bound. On the downside, the pair is putting pressure on support at 108.55. Close by, there is support at 108.20. There is resistance at 109.30, followed by resistance at 109.70
AUDUSD: Weekly Uncertainty AUDUSD has failed to break the so called resistance and a trendline is forming thus we will wait for a 3rd touch to form and possibly sell on it's break downward. Moreover, fibonacci levels are precisely respected. Will it succeed in breaking the uptrend ? Remember that this one could be in a corrective wave before the storm as the USD can possibly be failing following a bad economy management.
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Trade safe !
MacroForex
Battle of the BondsA good rule of thumb is that when investors are confused they transfer to cash. Investors become confused when they get contradictory signals.
Signal one; 10-year yields. They're going up, but not in a smooth orderly line; in fits and starts. Every week we get a 10 basis point jump. This is because every time the Chair of the federal Reserve gets on TV, he let's it be known that he's not just expecting to see inflation above 2%; he's actively trying to get there.
Signal two; EU self-sabotaging vaccine efforts. In what can only be described as one of the goofiest screw-ups in political theater, Germany abruptly decided that fringe occurrences of blood clotting - a very preventable event in most since the invention of aspirin - was more important than the lives of people who need the vaccine and their GDP, so they canned the Oxford vaccine. Other weak-kneed leaders followed suit and we get signal three.
Signal three; oil collapse Introduce the possibility of EU's vaccination efforts taking a little extra time and voila; oil is back to March 1 prices. Congrats. Go buy it now, because if there's one thing that inflation is really going to set in on, it's oil, and this Vaccine scare is a joke so it's on sale for a bit. Anyhow, this rapid deflationary event is one of those mixed signals. If the bond market is quickly trying to factor in inflation, yet the oil market is trying to factor in a drastic drop in anticipated demand, what gives.
Granted some of those events are foreign while the inflationary anticipation is more domestic, in the broader market - the market that the big money operates in - this is a confusing signal. One piece of the market saying economic activity is ramping up, and the other saying that it's delayed (and JPow saying that he will not settle for anything less than 2% inflation or more).
So what does this mean for you, the lowly SPY trader? Welp, who knows? It really depends on if these two elements of the market both stabilize tomorrow and Powell keeps his mount shut. In the near term, I expect a pretty rapid leg up again, and I don't think $400 is out of the question for the next few days. But I've highlighted the flow ocillator that shows an eerily similar pattern to our last bath. What is different is that the MAC-ZVWAP is much more virulent than it was a few weeks ago, suggesting that any dip would be brief.
If you're looking for advice - which this is not investment advise just entertainment - it would be to be nimble and not be scared to buy if we it the 20 day ema tomorrow morning, but avoid if we reach it in the afternoon. Also don't be afraid to short. Or don't be afraid to sit this one out.
USDCHF break after FOMCOn Wednesday, we saw the Fed's decision to leave interest rates unchanged until the end of 2023.
This led to a low in price of the USD everywhere, but only within an hour. Then we see a rise again in USDCHF.
We are currently in a downward movement of H1, as the resistance trend line has been broken.
The levels before the start of Powell's press conference were also broken.
This allows us to expect that the upward movement will have the strength to continue.
In order to receive confirmation, the price must break the previous peak!
In case of a breakout we expect an increase to 0.9352 and 0.9408!
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EURUSD before Fed Tonight we are expecting a Fed Interest Rate Decision! No change in the interest rate is expected, but there will be movement!
Jerome Powell's comments at the press conference will be extremely important!
After today, many opportunities will be sought based on this news.
We are looking for a higher probability in advance and we have expectations. Our expectations, as we have commented, are for a strong USD
On H1 from yesterday we also have a lower bottom, which allows us to expect that the price will continue to 1.1836.
Close above 1.1955 will be critical to the analysis
If you have questions about how to trade this or another situation, contact us!
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USDJPY towards 110 ahead of FOMC? Buying dips...Hi,
bulls are approaching 110, looks like we might see that level ahead of Wednesday,s FOMC.
Buying dips towards 108,60
Stop below 108,35
target 110
Good luck
USD remains strong!As we mentioned in yesterday's analysis, we saw an important day for the USD. After Jerome Powell's speech, the dollar rose everywhere.
Did we expect it? See our latest analysis:
AUDUSD
EURGBP
USDJPY
Now the NFP data is coming!
We expect to see a continuation of EURUSD to 1.1917!
The resistance zone is 1.1996-1.2020. And the minimum stop is over 1.2055!
If you have questions about how to trade this or that situation, contact us!
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EUR/USD - Battle of the Head & ShouldersIt's been a few weeks since EUR/USD broke below the neckline of its head and shoulders and the response since has been a little sluggish, to say the least.
The trend was starting to look very favourable for the dollar as it enjoyed a bit of a resurgence, taking out the neckline of a head and shoulders pattern in the process.
Since then, it came back and tested a cluster of moving averages - 55/89 SMA band on the daily chart and 200/233 SMA band on the 4-hour chart - as well as key fib levels. This wasn't a big concern, retracements are normal and they are standard rotation points after a breakout.
Since then, we've seen further resistance to the breakout and the 200/233 band on the 4-hour chart has fallen. This isn't a gamechanger, but I would say it's a red flag. The key fib zones remain in place and the 55/89 daily SMA continues to hold.
As long as this is the case, the head and shoulders breakout remains valid. The concern is that an inverse head and shoulders has now formed on the 4-hour chart in the midst of all the volatility.
The neckline of this isn't as clear as the one on the daily chart but what is clear is that a break above 1.22 doesn't bode well for the initial formation on the daily chart. And in fact, it could be quite a bullish signal for the pair.
At the moment, it's still in tact and during his first testimony in the Senate, Powell hasn't changed that. But we're now at a critical level and things could become a lot clearer very soon.
Stocks Waiting on PowellStocks really took a dive today. It seems the S&P is fearful of what Fed Chair Powell may have to say today. Recall that part of the reason that stocks are selling off is that due to increased bond yields, investors are fearful of higher interest rates, which would dampen the easy money party that stocks have been enjoying for years.
We are at a support level right now of 3847, which has further support from the intersection of a trend line and the psychological level of 3850. It is highly likely we will see a bit of support here, and it looks like we are catching a meager bounce at least. The Kovach OBV is bearish, and the Chande is turning over so both indicators are not looking too hot for stocks right now. If we break down further, watch 3825, and if we are able to break out, we will find resistance at 3887.
Will we see a new decline in gold?From the beginning of the year, a downtrend in H4 gold began.
It represents a correction of the rise in 2020.
And the main question always, is it time to buy or will we see another drop?
It will become clear today!
We are currently facing resistance from the trend line, as well as resistance from previous peaks.
This is an opportunity to look for a new decline to the previous bottom, and in case of a break even lower.
The important event today is - Fed's Chair Powell testifies
Watch for movement beforehand!
If you have questions about how to trade this or another situation, contact us!
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Make-Or-Break for Stocks! Eyes on the Fed 👀Stocks have retraced significantly in what appears to be a megaphone-like pattern. For the pedantic, a proper megaphone pattern requires higher highs as well, which we don't seem to have, but the spirit of the megaphone pattern is expanding volatility which we do see, especially on the down side. These current levels are a make-or-break for stocks. The level 3867 is crucial here, as it is the intersection of a tend line and a technical and Fibonacci level. If we break this we will have a lot of momentum, and could easily slice through 3846 to find support at 3824 or even 3810. Fundamentally, investors are fearful that a rise in the bond yields will result in a more hawkish Fed, and stocks are loving their low interest rate environment and easy money policies. Watch for hints of the Fed's direction when Jerome Powell speaks tomorrow. If you have faith in the stock market, then any dip should be considered a buying opportunity, as once the news is digested, hawkish or not, stocks will likely rip back to highs.
Dax - Short - Post All Time HighsThe Dax has lost it's upward momentum after having made all time highs on Monday as global equities rose due to Biden's proposed $1.9 trillion stimulus package. However, downside risks remain due to the continued impact of the pandemic on the global economy as US inflation came in at 1.4% vs 1.5% forecast. We await Powell's speech later today for any significant price action and believe prices could challenge long term support around 13,000 in the coming weeks.
ridethepig | NZD for FED📌 ridethepig | NZD Market Commentary 27.01.2021
What is in play here?
Buyers depriving shorts of their rewards and not allowing the breakdown ahead of Fed. Strategically speaking, this looks and smells a lot like a slingshot. The strong rejection points towards the Kiwi inflows after RBNZ let slip that rate cuts are unlikely. On the Fed side, dollar devaluation is still the name of the game and a dovish Powell is already widely expected. Not expecting much positivity on the recovery front, positioning is the main factor in play here and a sweep of the highs would be healthy as is the case for EURUSD.
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ridethepig | EUR Market Commentary 28.01.2021📌 ridethepig | EUR Market Commentary 28.01.2021
In this position, we have managed to build a solid floor at the 1.207x area and as widely expected Buyers fought like a lion to defend their jurisdiction. The ECB on the wires attempted to talk down the currency via threatening room for rate cuts, classic jawboning from Knot in attempt to provide shelter. They will not cut again and time to call bs; here actively buying dips in the euro - this charming position is proof of the wonderful beauty of technical analysis.
Looking back to the initial start of this move, it has taken a lot longer for the flow to play out than I would have liked, however, nothing has changed and there is no reason to be alarmed. If we lose the floor and breach 1.200x, then we KNOW we are WRONG and need to reassess the view. Fed artificial dollar devaluation is here to stay and a move back towards the top of the range is the path of least resistance.
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