Pound shrugs as UK economy grew by 0.2%The British pound is showing little movement on Friday in what has been a very quiet week for the currency. In the European session, GBP/USD is trading at 1.3071, up 0.10% on the day and its lowest level.
The UK economy showed slight improvement in August with a 0.2% m/m gain, after no growth in both June and July. This was in line with expectations and the pound’s reaction has been muted. Services, construction and manufacturing were all in positive territory, as the economy continues to show signs of growth. On a yearly basis, GDP rose 1%, up from a revised 0.9% in August but shy of the market estimate of 1.4%.
The slight rebound in the economy comes at a convenient time for the government, which will release the autumn Budget on October 30. The government is counting on the Bank of England to continue cutting rates in order to boost economic growth. Finance Minister Rachel Reeves has said that kick-starting the weak UK economy is the “number one priority.
The Bank of England delivered its first rate cut of the new cycle in August but stayed on the sidelines in September. The next meeting is on November 7 and the UK releases inflation and employment data ahead of the meeting, which will likely determine whether Bank policy makers feel comfortable making another quarter-point cut.
The US wraps up the week with the producer price index for September. Headline PPI is expected to tick lower to 1.7% y/y, compared to 1.6% in August. The core rate, however, is projected to rise to 2.7%, up from 2.4% in August. With inflation largely beaten, the Federal Reserve’s primary focus has shifted from inflation to employment. Still, an unexpected PPI reading in either direction could have an impact on the movement of the US dollar.
GBP/USD is testing resistance at 1.3058. Above, there is resistance at 1.3095
1.3023 and 1.2986 are the next support levels
PPI
07/10/24 Weekly outlookLast weeks high: $65,605.03
Last weeks low: $59,829.32
Midpoint: $62,717.17
After geo-political escalations causing panic in the markets at the beginning of last week, BTC has been spending the second half of the week trying to recover losses. The 1D 200EMA came in as support midweek to cap the sell-off, a steady climb back up flipping the 4H 200EMA back to bullish and finally the week low reclaim in the dying hours of the week. This to me is very positive, showing strength in times of major uncertainty. Another outside force Bitcoin will encounter is the US presidential election, that is now less than one month away and definitely will sway traditional markets and crypto alike.
This week we have some key data events:
Wednesday - FOMC minutes
As the unemployment data came in better than forecast, this could be a sign of further rate cuts to come in November, we may get some clues on this in the report.
Thursday - CPI (YoY)
Previous: 2.5%
Forecast: 2.3%
Actual:???
With CPI forecast to drop closer to the FEDs 2.0% target, anything lower than 2.3% would be positive for markets, 2,3% is probably priced in and anything above would be negative for markets.
Friday - PPI (MoM)
Previous: 0.2%
Forecast: 0.1%
Actual:???
Similar story in PPI as CPI, forecasts are for another drop and markets could react similarly to what's stated above.
Data events can be a non-event but now that the rate cut cycle has begun and the US election is on the way these events are more important than ever.
NZ dollar drifting ahead of manufacturing dataThe New Zealand dollar is showing little movement on Thursday. NZD/USD is trading at 0.6139 at the time of writing, up 0.05% on the day.
New Zealand’s manufacturing sector has been in the doldrums, as the manufacturing PMI has posted 17 consecutive declines. Friday’s PMI is expected to improve to 47 in August, up from 44 in July (a reading below 50 points to contraction). The New Zealand economy has deteriorated and in August the Reserve Bank of New Zealand responded with its first rate cut since March 2020. The RBNZ has joined the club, as most major central banks have lowered rates and the Federal Reserve is poised to do so next week.
The RBNZ will be looking to continue lowering rates, as the cash rate of 5.25% remains high and is weighing on economic activity and households. Inflation has dropped to 3.3%, which is close to the target of between 1% and 3%. The central bank meets next on Oct. 9 and there is pressure on the RBNZ to follow up with a second straight rate cut.
In the US, today’s inflation numbers were a mix. Headline producer prices rose 1.7% Y/Y in August, following a downwardly revised 2.1% gain in July and just below the market estimate of 1.8%. However, core PPI rose from 2.3% to 2.4%, below the estimate of 2.5%. Today’s PPI data didn’t budge the market pricing of a Fed rate cut, with an 87% probability of a 25-bps cut next week, according to the CME FedWatch tool. Still, not everybody is on board for small cut – JP Morgan is projecting that the Fed will deliver a jumbo 50-bps reduction.
NZD/USD is testing resistance at 0.6134. Above, there is resistance at 0.6160
There are support lines at 0.6110 and 0.6084
09/09/24 Weekly outlookLast weeks high: $59,829.20
Last weeks low: $52,551.34
Midpoint: $56,190.27
More sell-off last week in the crypto markets, very tough market conditions continue, hitting the $52,000 bullish OB+ again, the first time being exactly one month before.
This area had held as support previously but it needs to hold this time around too, failing that $50,000 is the bottom of the daily downtrend channel.
US CPI (Wednesday) & PPI (Thursday) this week, as with big news events we can potentially see volatility, this will be the last US CPI before rate cuts begin in the US, in Europe rate cuts are forecast to begin on Thursday, predicted to drop from 4.25% to 3.65% according to invesing.com, a 60bps cut.
Another major news event this week is the Trump v Harris Presidential debate. I'm not expecting a whole lot of crypto talk in this debate, if I'm being completely honest I can't see it being an adult debate about political policy at all. However, I do think it will have an effect on the markets one way or another, obviously Trump is the better outcome for crypto if he stays true to his plans set out during the Bitcoin conference compared to the plans for the Harris administration to tax un-realized gains which is not very pro-investment. Again, I'm not holding my breath for any information on crypto but it is a major news event all the same.
So in conclusion this week is full of news events that could create volatility, with BTC at its current level nearer the bottom of the daily trend. It does feel like we're maybe coming to an end of the chop with monetary policy pivot taking place soon.
Can Inflation Shift the Fed’s Rate Path? This week’s inflation data could be decisive for traders as markets weigh whether the Fed will cut rates by 25 or 50 basis points. Last week’s jobs report did not sway the market from its current consensus.
The US economy added 142,000 jobs in August 2024, falling short of the expected 160,000, based on the latest NFP data. According to the CME FedWatch Tool, the likelihood of a 25-bps rate cut climbed to 73%, while expectations for a 50-bps cut dropped to 27%.
Attention now turns to inflation, with consumer prices expected to fall to 2.6%—the lowest since March 2021—and producer prices anticipated to rise 0.2% month-over-month.
Key USD pairs to watch this week include EUR/USD, with the ECB's upcoming interest rate decision in focus. Additionally, pairs impacted by inflation data releases from Mexico, Brazil, Russia, and India could see significant movement.
Gold did nothing, So I slept + I had a headacheThe best thing about being a full time trader is being able to do what I want when I want and as much as I am in pain as I type this, Just knowing that I don't have to answer to anyone reduces that pain 10 fold for me, honest.
I don't have to request any leave, I don't have to report to anyone. I can just go.
Yeah sure making money is great but what good is it if it costs you your peace.
I'd openly accept making 10 times less than what I make now in exchange for my peace. Yeah you read that right.
XAUUSD | Road to 2,500 PhasePrevious analysis has now near enough completed with a large bullish surge today making its way over 2 key quarter level phases with 2500 being the last of this phase section, after breaking through the previous days high gold now tests the all time high of 2,485 where there is a lot of pressure to break through already.
With various events happening this week such as the CPI, PPI + Retail Sales I think the final event on thursday could provide key insight into golds growth and how the precious metal stands out from the rest, it is noteworthy of paying attention to the upcoming PPI although only short term impact it can play important roles within the FED and further conditions.
What are your thoughts and ideas? Let me know below :)
Surging euro hits four-month highThe euro keeps pushing higher and is up for a fourth straight day. EUR/USD is trading at 1.0913, up 0.34% on the day. Earlier, the euro touched a high of 1.0920, its highest level since March 21.
The US dollar has hit a rough patch in recent weeks and has lost ground against the major currencies. The euro has sparkled in July, gaining 1.9%.
Eurozone industrial production recorded a sharp decline for a second straight month, a reminder that the manufacturing sector is still in trouble, with weakening demand across most of the eurozone and a global economy that is still trying to find its footing.
Annually, eurozone industrial production declined 2.9% y/y in May, following a revised 3.1% decline in April. Monthly, the indicator declined 0.6% in May, lower than the revised April reading of 0%. Both readings were better than expected, but point to contraction in production.
The week ended with the US Producer Price index accelerating unexpectedly in June to 2.6% y/y, up from a revised 2.4% and above the market estimate of 2.3%. This was the highest level since March 2023. Monthly, PPI edged up to 0.2%, up from a revised 0% in May and above the 0.1% market estimate.
The higher-than-expected PPI report didn’t make much of a dent in market expectations for a September rate cut, which stand at 88%, according to the CME’s FedWatch. PPI tends to be erratic and the jump in the June data likely doesn’t point to a buildup in inflationary pressures. Last week’s June CPI report was softer than expected and boosted market expectations for an initial rate cut in September.
EUR/USD has pushed above resistance at 1.0893. Next, there is resistance at 1.0925
There is support at 1.0876 and 1.0844
BITCOIN LINE IN THE SAND BTC has lost the 1D 200 EMA for the first time this year which is a major TA trend Indicator.
On the daily timeframe we can see a clean breakthrough below on the first touch since October of last year, which initially is surprising as this level is seen as key support for keeping a bullmarket going. Now that BTC has fallen under the moving average we've seen attempts at breaking back above for the last 3 days in a row, and with FED chair Powell set to testify today and tomorrow along with CPI &PPI on Thursday and Friday respectively. It's quite a FED heavy week with can bring volatility to the market.
The ETH ETF is rumoured to begin trading next Monday (15th July) which could be the catalyst to get both BTC & ETH back above their 1D 200 EMA's. For now the general worry is that the selling pressure caused by the German Government and Mt. Gox is what is dragging price down. However, yesterday recorded a net inflow of $295m for the Bitcoin spot ETFs, the most in 21 days which suggest there are buyers looking to absorb those Bitcoins that are being offloaded.
I am still a little confused as to why the German Government have decided to market sell through an exchange instead of any OTC transactions, perhaps it's a play to shake out weak hands and make retail panic?
The FA is always complicated but I still believe that the bearish factors are more short term when compared to all the bullish more long term factors. Short term market selling vs long term supply shock caused by the halving, institutional investors and ETFs buying, US election and rate cuts.
CPI & PPI can be volatile news events for the market, I think it could be one of these events that could be a catalyst to reclaim the 1D 200 EMA, we've seen a full reset of the RSI since the rally of earlier this year. Historically these are all good long term entry criteria.
PPI News Trade ideaHere are the most important developments:
Inflation in America declined yesterday, less than expected, to 3.0%, which increased bets that the US Federal Reserve will reduce interest rates next September.
• This matter led to severe bleeding in the US dollar, and in return, gold shined, approaching its highest historical level.
• Brianna: This weakness of the US dollar will continue, provided that... the inflation data on American industrialists declines.
No bigger driver for Gold than inflation this week? This week's economic calendar is dominated by US inflation data, with the Consumer Price Index (CPI) and Producer Price Index (PPI) set for release.
Expectations are for a further decline in inflation, potentially strengthening the case for multiple Federal Reserve interest rate cuts this year. Economists polled by Reuters forecast annual consumer price inflation to have eased to 3.1% in June, down from 3.3% in May.
An interesting development today: Federal Reserve Chair Jerome Powell, in his appearance before the Senate Banking, Housing, and Urban Affairs Committee, expressed concerns about the potential risks of maintaining high interest rates for an extended period, which could threaten economic growth, CNBC reported.
For the exact date and time of these major economic events, import the BlackBull Markets Economic Calendar to receive alerts directly in your email inbox.
Gold prices edged higher, with XAU/USD trading at $2,364, up over 0.25%. The first resistance level for gold could be July 5 high at $2,392. On the downside, if nearer support levels fail, the next support zone could be the May 3 low of $2,277.
Euro's Next Moves: Biden, Powell, and Inflation Data The euro held steady at $1.0825 on Monday, recovering from a dip to $1.0815 as traders absorbed the surprising French election results, which saw a leftist alliance lead both the centrists and the right in the number of sets gained.
Key drivers for the EURUSD's next moves include Biden's potential resignation, upcoming bank earnings, Powell's testimony in Washington, and US CPI and PPI data, alongside Hurricane Beryl's developments.
For the exact date and time of these major economic events, import the BlackBull Markets Economic Calendar to receive alerts directly in your email inbox.
Both monthly and daily RSIs for EUR/USD are on the rise but remain below overbought levels, suggesting continued upward momentum. Should US inflation data show further declines, EUR/USD could aim for the 1.09395 mark. Conversely, higher-than-expected inflation figures might reverse this bullish trend, potentially pushing the pair back to the well-established lows of 1.0600.
Euro falls to six-week highThe euro has extended its losses on Friday. EUR/USD is trading at 1.0675 in the European session, down 0.59% on the day. The euro is down 1.17% this week and has dropped to its lowest level since May 1st.
France’s inflation level fell to zero in May, confirming the preliminary estimate and down from the 0.5% gain in April. France is the eurozone’s second-largest economy and the downtrend in inflation will be welcome news to the European Central Bank. The central bank delivered a rate cut last week, the first since its rate-tightening cycle began two years ago. ECB policymakers will be closely monitoring inflation data and could consider another cut in the fall if inflation continues to decline towards the 2% target. Eurozone inflation rose 2.4% in April, unchanged from March.
ECB President Lagarde speaks at an event in Croatia later on Friday and investors will be looking for hints as to the ECB’s planned rate path. Another cut in July is unlikely but a signal from Lagarde that additional rate cuts are one the table could boost the euro.
In the US, the producer price index rose 0.2%, below the April reading of 0.5% and lower than the market estimate of 0.1%. Yearly, PPI ticked lower to 2.2%, down from a revised 2.3% in March and below the market estimate of 2.5%.
The soft PPI data follows the May CPI report which also showed that inflation on the decline. The downtrend in these two inflation reports have raised expectations of a September rate cut, with a 61% of a quarter-point cut currently, compared to 46% just a week ago, according to CME’s FedWatch.
EUR/USD pushed below support at 1.0709 and is testing support at 1.0679. Below, there is support at 1.0629
1.0763 and 1.0793 are the next resistance lines
Strifor || EURUSD-30/05/2024Preferred direction: SELL
Comment: The price did not approach the level of 1.09000 , at least in the first half of this week, and the euro quickly fell to 1.08000 . In the short term, the decline is likely to continue. An important point, of course, will be today's statistics from the US on GDP , the labor market, and so on.
We consider two scenarios, which are depicted in the graph. Scenario №1 assumes a fall from the level of 1.08000 , below which the price is currently located. Scenario №2 - preliminary growth above the level of 1.08000 , the buyer’s attempt to gain a foothold above, and to sell it will be necessary to wait until it closes below the specified level again. The target for the fall is considered to be at the level of 1.07500.
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Strifor || NZDUSD-14/05/2024Preferred direction: BUY
Comment: The short-term strengthening of the US dollar's main competitors is relevant, and the New Zealand dollar is no exception. It should even be noted that this currency pair is among the top for short-term growth today. Strengthening of the NZDUSD is expected towards the level of 0.60713 , as well as in the case of the Australian dollar, there is a possibility of more significant growth, however, there is no need to raise the target too much since in the medium term there will most likely be a downward reversal.
According to our main scenario №1 , we expect growth from the current ones, and we can safely consider buying right now. Scenario №2 is extremely unlikely, but nevertheless, we highlight it as an alternative.
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Strifor || AUDUSD-14/05/2024Preferred direction: BUY
Comment: The current week will be the most intense compared to the previous one, as a number of important economic data are expected to be published. The focus will certainly be on the US CPI.
Against this background, we still adhere to the buy priority for the Australian dollar and expect growth to the maximum level of 0.66460 from current prices (scenario №1) . This level is the main target, although you can expect a slight rise a little higher as part of a false upward movement. In the longer term, we also believe that the currency pair will turn downward.
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What did Powell say and what did gold do? Federal Reserve Chair Jerome Powell expressed reservations about the trajectory of disinflation in the US during his recent remarks, stating, "My confidence in that is not as high as it was." Despite this, he indicated that further rate hikes were unlikely based on the data from the first quarter of the year.
Powell's comments largely echoed those made during his last press conference following the Federal Reserve's previous meeting.
Market sentiment regarding the Fed's rate decisions appears to be slightly adjusting though, particularly after the release of new data showing faster-than-expected increases in producer prices in April. Traders are now considering a 60% chance of a rate cut in September, down slightly from the 64% chance before Powells remarks and the Producer Price Index (PPI) report.
Following the release of the PPI data, the XAU/USD pair climbed nearly 0.8% to $2,357, with potential for further gains in upcoming trading sessions. Technical analysis indicates that the next obstacle for gold prices lies near trendline resistance at $2,370, while immediate support rests close to $2,320, followed by the 50-day Moving Average.
Market attention now turns to the release of consumer price data for April, scheduled for Wednesday.
AUD/USD gains ground ahead of wage growthThe Australian dollar has posted gains on Tuesday. AUD/USD is up 0.19%, trading at 0.6620 in the North American session at the time of writing.
Australia’s wage growth for the first quarter is expected to remain unchanged. Wages rose 4.2% in the fourth quarter of 2023, the highest since 2009, with most categories showing increases. On a quarterly basis, wage prices rose 1.9%, which was the lowest gain in three quarters. If the release is not within expectations, we could see a reaction from the Australian dollar.
Is the Reserve Bank of Australia considering a rate cut? The central bank hasn’t shown any rush to shift policy and held rates at 4.35% for a fourth straight time at last week’s meeting. The RBA has stressed that rate policy will be data-dependent and has made the battle against inflation its top priority.
A rate cut isn’t coming until inflation falls and the RBA doesn’t expect inflation to fall within the target range of 2-3% before 2025. Inflation has come down to 3.6% but the last phase of getting inflation within target could be the most difficult part, as the Federal Reserve has discovered. Unless inflation surprises with a sharp drop in the coming months, a rate cut is unlikely before November or early 2025.
Federal Reserve Chair Powell speaks at an event in Amsterdam later today and the markets will be looking for hints regarding a rate cut. The Fed has delayed plans to cut rates as the US economy remains resilient and inflation has unexpectedly accelerated. The US releases April inflation data this week and a drop in inflation would increase the likelihood of a rate cut in September. The US releases PPI is expected to remain unchanged at 2.4% in April while CPI is projected to ease to 3.6%, down from 3.8% in April.
AUD/USD tested support at 0.6602 earlier. Below, there is support at 0.6559
0.6645 and 0.6688 are the next resistance lines
Gold analysis for 13/05/24 & 14/05/24According to my analysis and according to what you taught me, Tamas :
Scenario 1 :
If CPI comes negative on Wednesday, it could lead to deflation concerns, which might prompt the Federal Reserve to consider cutting interest rates to stimulate economic activity and prevent deflationary pressures. A negative CPI could indicate a decrease in the general price level of goods and services, potentially signaling weak demand or economic contraction
A decision by the Federal Reserve to cut interest rates could weaken the dollar, as lower interest rates typically make a currency less attractive to investors seeking higher yields. This could lead to a depreciation of the dollar index, which measures the value of the dollar against a basket of other currencies
Gold prices may rise in response to a potential interest rate cut by the Federal Reserve. Lower interest rates typically decrease the opportunity cost of holding non-interest-bearing assets like gold, making it more attractive to investors. Additionally, concerns about inflation and currency depreciation amid monetary easing measures could further support gold prices , Gold may Target 2394-2400
Scenario 2:
A positive CPI indicates an increase in the general price level of goods and services, suggesting inflationary pressures. This could lead to concerns about the purchasing power of the currency and potential future interest rate hikes by the Federal Reserve to curb inflation
If the PPI also shows an increase on Tuesday, it could reinforce inflationary expectations, indicating rising costs for producers. This might further support the case for potential interest rate hikes by the Federal Reserve to address inflationary pressures
Technical Analysis :
We're currently in Correction Wave , and Expecting Price to Pump for Gold target 2394-2401
Advice : please always use a propre risk management this is my analyse and good luck
Make sure if you like my Analysis to boost up my post and Comment
USDCAD: Thoughts and AnalysisToday's focus: USDCAD
Pattern – Heavy Resistance
Support – 1.3514, 1.3454
Resistance – 1.3602
Hi, traders; thanks for tuning in for today's update. Today, we are looking at USDCAD daily.
What are we discussing and asking today after looking at USDCAD?
Will current heavy resistance contnue to block buyers? Does price have enough momentum in its current bull channel? Will this week's data and news be enough of an influence to set off a new break lower or higher?
Key news, US CPI, PPI, Fed meeting minutes. Canadian interest rate decision.
Good trading.