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Euro inflation rises, but euro yawnsThe euro continues to have a calm week. In the North American session, EUR/USD is showing little movement as it trades a whisker above the parity line. Inflation in the eurozone continues to move higher. In August, CPI rose to 9.1%, up from the July gain of 8.9%, which was a record high. Core inflation climbed to 4.3%, up from 4.0%. With both the headline and core readings exceeding the forecast of 9.0% and 4.1%, respectively, there will be additional pressure on the ECB to tighten policy more at an accelerated pace. The central bank has been slow to shift its accommodative policy, which was in place for years in order to support the eurozone economy. The ECB now finds itself playing catch-up with inflation, and is also far behind in the tightening cycle compared to other major central banks, with a benchmark rate of just 0.50%. Inflationary pressures remain broad-based, which means inflation is well-supported and unlikely to decline anytime soon. The eurozone inflation report comes just a day after Germany, the largest economy in the bloc, reported that August inflation jumped to 7.9%, up from 7.5% in July and nudging above the forecast of 7.8%. The central bank meets next on September 8th, and there is a strong possibility that the ECB could come out with guns blazing and deliver a super-size 75 basis point increase. A potential energy crisis in Europe continues to hover like a dark cloud, and the uncertainty over whether Moscow will weaponise energy exports remains a massive concern. The Nord Stream 1 pipeline has been shuttered for a scheduled three-day maintenance, but there are fears that Russia will find some excuse and not renew gas flows on Saturday. Any disruptions would likely push European gas prices even higher. In the meantime, the waiting game is on, with Western Europe on edge while it anxiously waits for the gas taps to be turned back on. EUR/USD has support at 0.9985 and 0.9880 1.0068 is a weak resistance line, followed by 1.0173
by OANDA
The Price of Freedom: NS2 pipeline cf German base energy pricesThe Nord Stream 2 runs through the Baltic Sea from the St Petersburg region (Russia) to Baltic Coast in north-east Germany. It can transport 55 billion cubic metres of gas per year from Russia to Germany, enough to power 26 million homes for a year. Europe's total consumption of Russian gas per year is approximately 200 billion cubic metres per year, which accounts for about 40% to 50% of Europe's energy consumption. The Nord Stream 2 pipeline completely bypasses Ukraine. Prior to the war Ukraine was earning approximately $1.2 billion per year in gas transit fees from Russia to the EU through its territory. Construction of the pipeline began in 2016. In Jan 2019 US ambassador to Germany threatens sanctions on companies participating in Nordstream 2 construction. In December 2019 these sanctions are passed into law. Merkle labels these sanctions when they passed as US interference in EU internal affairs. July 2020 NY Times article provides a good explanation of the tensions between the USA and Germany over the opening of the Nordstream 2 pipeline : www.nytimes.com Pipeline construction was completed in September 2021, but Germany did not approve gas to start flowing. In the same month, NATO and Ukraine conduct joint military exercises. In December 2021 Russia threatens military action in Ukraine. Things escalated, as we all now know. Shortly after Russia's invasion of Ukraine in late Feb 2022, Germany (finally) suspends the Nordsteram 2 pipeline. German energy base energy prices per megawatt hour have gone from 50 euro since the announcement of US sanctions on Nordstream 2 in 2019, to 150 euro in September 2021 when Ukraine and Nato conducted joint military exercises, to 300 euro after Germany announces in August in has no plans to open Nordstream 2. Contract at the time of this writing is at 420 euro, up 8x since the US announced sanctions on Nordstream 2 in Dec 2019. In April 2022 when it became clear to me that NATO was willing to put its populations under extreme energy duress and significant security duress to retaliate against Russia's invasion of Ukraine, I placed bets on unlisted US defense companies. In retrospect, having caught up on the history of the Nordstream 2 pipeline conflict, with the US and Ukraine aligned against Russia and Germany caught in the middle, as well as the sheer scale of the EU's dependence on Russian gas, the cleaner bet would have been on German base energy prices. The 12 month energy contract is actually trading at 1,000 euro. I.e. the 12 month spot / futures basis is telling us that even though prices are up 8x from Dec 2019, this is about to get far far worse. The question now is how much pain can EU citizens bear before they say enough is enough and cut a deal with Russia. At the moment they are sustaining a huge amount of pain and and still holding up, they have probably surprised Russia (and themselves) with their willingness to bear the pain. However, winter is coming and it's not going to be pretty. It's possible the EU is willing to (or has no choice but to) completely obliterate its economy to wean itself off from Russian gas rather than cut a deal with Russia. If that's the case we can expect energy prices to remain high, perhaps even pump further At some point there will be enough incentive though for supply to flow from US, maybe Africa, and arrest the rise in prices. This may be coupled with US aid to Europe to cover their gas bill as European allies ask for help in continuing the economic war. It would be plausible for big aid to be forthcoming as it would essentially be taxpayer money that would essentially flow to the US energy producers, and so far the tax base in the U.S. seems supportive of continuing the war on Russia. Signs to look out for are signs that both EU and US electorates are tiring of the cost of waging this war. If these signs emerge as German baseline prices continue to rise, this might be a good time to place a short on energy prices. Any signs of Germany agreeing to start gas flows through Nordstream 2 might also be a good opportunity to place a short Of course, energy markets are highly efficient so my main concern with this strategy would be inside information or simply people closer to the national policy movements underway that might signal a fraying of resolve in maintaining the economic war on Russia, at least as it relates to energy.
NYMEX:DEB1!Short
by a_trader_anon
1
EUR/USD near parity, Powell speech nextThe euro has posted gains today and briefly punched above the symbolic parity line. In the North American session, EUR/USD is trading at 0.9978, up 0.11%. It seems that whatever angle you examine Germany's economy, things are not looking good. Services and manufacturing PMIs both remained in contraction territory (below 50.0) for a second straight month. The labour market, which had been a bright spot in the economy, saw the pace of job creation fall to a 1.5-year low. Today's releases didn't add any cheer. GDP in Q2 rose a negligible 0.1%, revised from 0.0%. As well, German Ifo Business Climate fell to 88.5, down from 88.7. This wasn't a sharp drop, but it was significant since it marked the index's lowest level since mid-2020. What is no less alarming than the weak numbers is the pessimistic outlook. As the war in Ukraine drags on with no end in sight, the energy crisis could get significantly worse in the winter, as Western Europe is vulnerable to a cutoff of Russian oil and natural gas. Germany appears headed towards a recession later in the year, and the rest of the eurozone will likely fare no better. The US economy contracted for a second straight quarter in Q2, but second-estimate GDP was revised upwards to -0.6%, up from -0.9% in the initial estimate. This follows a 1.6% decline in the first quarter. The upward revision was good news for the US dollar, as a weak GDP reading could have raised speculation about a Fed U-turn in policy and sent the greenback lower. The dollar's next test comes as soon as Friday, with all eyes on Fed Chair Powell's speech at the Jackson Hole Symposium. If Powell reiterates that the Fed will continue to tighten aggressively until inflation is curbed, the dollar could gain ground. However, if the Fed Chair's message is less hawkish than expected, we could see sharp gains in the equity markets at the expense of the dollar, as was the case following the surprise drop in US inflation earlier this month. EUR/USD is testing support at 0.9959. Below, there is support at 0.9877 There is resistance at 1.0113 and 1.0195
by OANDA
Wheat up four days consecutively & approaching local resistanceTechnically, wheat has seen 4 consecutive sessions of strength. This is in the face of a stronger dollar and recessionary fears, which in theory should sap sentiment and forward demand dynamics. Wheat is approaching key level of resistance at 810. This is a previous POC, that has proved difficult to breach. Though fundamentally wheat should stay bid, considering macro outlook and supply issues, MACD, vwap and RSI all point down to further pressure should this fib retrace become invalidated
WShort
by jbanton86829
AGRI - Food will come back without a doubt it my mindExpect orange range to hold as support for this here. Volume spikes after coming in suggesting it could be getting ready. Would be great if it held the top range but definitely doesn't have to. Nice that it coincides with the gap up on 16th of May. Looking for a swing here and this will be a ticker I'm going to be keeping an eye on for the rest of the year. Gaps filled and not too many people talking about food plays. Similar to energy a while back. Wheat futures has been trying to push lower for the past month and a half but it just can't stay down there. Like oil, I think food gets it's second leg and AGRI was there main player in smallcap world. Remember no fundamentals have changed regarding the food situation around the world, which I've mentioned in previous posts. ZERO
NASDAQ:AGRILong
by SlapAsksLiftOffers
Nat Gas's Rally To Strengthen Fundamentals: The global Nat gas supply is one of the tightest in the commodity space. Historically hot weather all over the world -most notably in Europe and in parts of the US- has created an abnormal amount of demand for nat gas this summer. Climate change and extreme weather are also now threatening the passage of cargo ships through the Rhine river, which could have big implications on the price of several European imports including nat gas. All the while Putin looks to use his pipeline Nordstream 1 as a bargaining chip in the face of NATO sanctions. There has already been talk about a complete halt of Russian gas into Europe coming in the fall of 22. Technicals: A cup and handle formation looks to have formed on the daily chart, currently in the final stage, in which NG1! should break out to new highs. Momentum is very strong on monthly, weekly, and daily timeframes. The volume for this rally is certainly not the strongest. NG1! found support and bounced nicely off the 50% retracement level of around 7.5. Despite the low volume, I think new highs are a lock here for US nat gas. This is a textbook cup and handle, I expect an upside target of 13.65 to be hit in the medium-term outlook for NG1!. As always this is not trading advice. Good luck!
NYMEX:NG1!Long
by Gooby_Trades
2
August 15 BTCUSD BingX Chart Analysis and Today's HeadlineBingX’s Bitcoin Chart According to The Block, August 12 saw the open interest of ETH option hit $8.11 billion—a figure that's nearly three times higher than where it stood a month ago. Bitcoin is down 0.8% over the last 24 hours and fell to an intraday low of $24,150.91. Bitcoin rose above $25,000 on August 14 but the price could not sustain the higher levels, which suggests the bears are selling on rallies. The relative strength index (RSI) in the positive territory indicates that the buyers have an advantage. If the price managed to sustain above $25,000, Bitcoin could rally to $28,000. Today’s Cryptocurrency Headline Russia Plans to Launch its CBDC-Digital Ruble Across all Banks in 2024 According to the latest monetary policy update from the Central Bank of Russia, the authority will start to connect all banks and credit institutions to the digital ruble platform in 2024. By that time, the central bank expects to complete “real money” customer-to-customer transaction trials as well as the testing of customer-to-business and business-to-customer settlements. In 2023, the Russian central bank also plans to test digital ruble-based smart contracts for eligible participants to trade. Additionally, the Central Bank of Russia continues to work on its upcoming central bank digital currency (CBDC), with plans to launch an official digital ruble within a few years. Disclaimer: BingX does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to the company. BingX is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the article.
by BingX
XAUUSD SHORT TO 1746As you guys saw from my previous analysis, I was short on Gold from 1791 & I am still holding onto those sells within the Gold Fund for my investors. While on the 1 Hour TF, it might look like Gold is constantly rising, if you go onto a higher TF like 4HR/Daily, you'll see Gold momentum is slowing down & buyers are very sluggish. We have seen a 5 wave, bullish completion on Gold & I am still expecting a retracement from this area to the downside. I am already holding buys, so my sells going into a bit of drawdown won't effect me as I am hedged in both directions. Perfect risk management for my Gold Fund investors as we lose nothing📈 Drop a like if you agree with this analysis and follow for more Gold updates✅
OANDA:XAUUSDShort
by BA_Investments
#BRENT crude oil - technical picture deterioratingAs we all know, Brent crude has been one of the strongest commodities for quite some time given all the supply issues from Russia/Ukraine and under investment. Oil has lost some critical technical levels losing both its horizontal support, rising channel as well as 200 day moving average. The market can be telling us two things, potentially, (1) there is some sort of resolution to the Russia/Ukraine embargo, or (2) Economic growth slows down as we enter recession, with demand destruction starting to take place Next target is likely $86 which was an important level of resistance in prior years - and likely to become support should we drop further.
TVC:UKOILShort
by MarcoOlevano
EUROPE is going to enter into recession soonThe closer the winter, the stronger Russia leverages against Europe become. Main one being natural gas. Europe imports 90% of it's gas and Russia was importing 40% of it. Prices were much cheaper than LNG since it was transferred through pipes. Now, the biggest gas pipeline in Europe - Nord Stream is getting used by Russia as a weapon against European countries. By cutting supply to 20% of pipeline's power, Russia expects Europe to stop supporting Ukraine in it's attempt to defend the country. Surely, Russia plans to cut it completely in the near future when it will damage European economies the most. Compare this year prices with 2021 and you will be terrified because it grew more than 10 times. And remember that during summer natural gas prices are the cheapest. As winter approaches and when Nord Stream will shut down completely we can easily double in price. More than 25% of German businesses say they are considering temporary or complete shutdown. Already more than 8% of heavy industry in Germany were put on hold since factories stop being profitable because of increased manufacturing costs. Bottom line: Fundamentally natural gas prices will grow and European economies will suffer. By following fundamental analysis lets look at technical: We updated historical highs, but that was false breakout. It's wise to look for continuation of bullish trend, that's why I draw 2 scenarios. 1. From current price we approach top of the false breakout and after some range push higher. 2. We will be in range for a couple days, using bottom trendline as support. Closer to the end of formation we will squeeze to the previous level and break through it. What do you think of this idea? What is your opinion? Share it in the comments📄🖌 If you like the idea, please give it a like. This is the best "Thank you!" for the author 😊 P.S. Always do your own analysis before a trade. Put a stop loss. Fix profit in parts. Withdraw profits in fiat and reward yourself and your loved ones
RUS:NG1!Long
by Artem_Dishel
9
EUR/USD shrugs as German confidence slipsThe euro is in positive territory at the start of the week. In the North American session, EUR/USD is trading at 1.0245, up 0.30%. The US dollar lost some of its lustre last week and the euro took advantage. EUR/USD posted its first winning week in a month and pulled some distance away from the parity line. The euro has posted gains today but there was some alarming data out of Germany. Ifo Business Sentiment dropped to 88.6 in June, down sharply from 92.2 in May and shy of the consensus estimate of 90.2. The reading marked the lowest level in more than two years and was accompanied by an unusually grim message from the head of the Ifo Institute. Klaus Wohlrabe said that a recession in Germany was "knocking on the door" due to high energy prices and the possibility of gas shortages faced by Germany. The Nord Stream 1 pipeline opened on Thursday as scheduled after being shut for maintenance but only at about 40% capacity, which was the case before it shut down.  At that level, Germany may need to ration gas in order to reach its target of 90% storage capacity before winter sets in. The EU has suggested that member countries scale back their gas needs by 15% starting August 1st, but already some members are pushing back and demanding exemptions, making it uncertain if this voluntary plan will get off the ground. The EU is clearly worried that Russia will weaponise its energy exports to Europe, which has implemented sanctions against Moscow due to the invasion of Ukraine. With each member state having to worry about its own citizens having sufficient gas in the winter, we could see cracks appear in the EU's attempt to have a unified stance against Russia. EUR/USD continues to test support at 1.0191.  The next support level is 1.0105 There is resistance at 1.0304 and 1.0390
by OANDA
Updates of Options Strategy on Wheat FuturesCBOT:ZW1! On June 15th, I issued an options trading strategy on CBOT Wheat Futures. At the time, I expected wheat price to experience a very large move but was unsure of its direction. Consequently, I recommended a Long Strangle options strategy : Purchase both an out-of-money (OTM) call and an OTM put on September Wheat Futures. The original trading idea may be found here: . Let’s review how this trade performed five weeks after its initiation: Initial market conditions on June 14th: • September Wheat Futures (ZWU2) is quoted at $10.54/bushel. • An OTM call with a $12.00 strike price is quoted at 17 cents. • An OTM put with a $9.00 strike is quoted at 4.625 cents. A Long Strangle will cost $1,081.25, as each call and put contract is based on 5,000 bushels of Chicago wheat. This is the maximum amount you could lose if wheat price did not break out the upper ceiling or fall through the lower floor set by the strikes. At this writing on July 18th: a) ZWU2 futures is quoted at $7.81/bushel, down $2.73 or -26%. Our expectation of big price move is proven to be correct . b) Call options with $12.00 strike price is quoted at 10 cents, down 7 cents. Even though futures price declines, there is still time value in the OTC call options. c) Put options with $9.00 strike is quoted at 85.5 cents, up 1749%. Due to the nonlinear nature of options pricing, our put is hugely profitable as it is now $1.19 deep in-the-money. What can we do today? There are two options: 1) Sell both the call and put with offsetting trades. The call would realize a loss of $350, and the put has a profit of $4,043.75, making the combined total at $3,693.75. Taking the $1,081.25 premium we paid upfront as our cost base, gross profit will be $2,612.5 per contract, or +242% return in a five-week holding period. 2) Hold the positions . There are five more weeks left before the August 26th options expiration, and wheat price could make bigger move. For illustration purpose, let’s use today’s price as exercise price. The Call would expire worthless as it is out-of-the-money, and we lose the $850 initial investment. However, by exercising the put, we gain $1.19 (=9.00-7.81) per bushel, and $5,950 per contract. The combined gross profit will be $4,018.75, or +372% . Why does this trade work? The key lies with a properly set-up strategy. It’s time to revisit our Three-Factor Commodity Pricing Model: Commodities Futures Price = Intrinsic Value + Market Sentiment + Crisis Premium In February through May, the Russia-Ukraine conflict put a huge Crisis Premium on wheat price, driving it from $8 to $12-$13, before moving lower to around $10. Since June, surging inflation, aggressive rate hikes, and recession fears overtake supply concerns as the main market driver. As fighting in Ukraine drags on, the impact from crisis diminishes, and Bearish Market Sentiment takes over. Commodities markets from energy, metals to agricultural products all suffered a huge loss. Looking forward, I expect that Intrinsic Value, or traditional supply and demand factors, would come back as key market mover. The recently released World Agricultural Supply and Demand Estimates report (WASDE) from the U.S. Department of Agriculture set a bearish tone in the grain market, sending wheat price to fall further. For our CBOT Wheat Strangle options trade, I favor closing the positions now over holding it to expiration. Here is my reasoning: In a classic economic supply and demand chart, fundamental factors move market price along the supply line and demand line. Price movement tends to be moderate and within a narrow band. This is what the Wheat price chart shows before February 24th. On the contrary, crisis premium pushes either the supply line or the demand line to shift sideway, resulting in big price jumps. In the case of Wheat futures, investors are concerned that a loss of Russian wheat would reduce global supply by as much as 25%. Wheat price responded by a series of limit-up days and jumped 40% in two weeks. Note that daily price limit (up or down) on wheat futures is 70 cents per bushel. In the absence of conflict escalation in Ukraine, volatility in wheat price would likely stay muted going forward. Additionally, time value, which is part of the options premium, will decrease quickly as contract expiration nears. In the Black-Scholes Model, options price is positively correlated with volatility. Expected low volatility combined with diminishing time value will make it difficult for our Long Options to increase in value. This is my argument against holding on to the options. As the likelihood of global recession grows, food crisis will stay on as a major global issue in 2022 and 2023. Famine could hit weaker economies. Agricultural commodities will be a good risk management tool to hedge the rising food cost. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CBOT:ZW1!Short
by JimHuangChicago
21