USDCAD LongLongs, shorts, longs, shorts.
Overall Bearish on the UCAD however I'm looking for a DXY pump while we wait for the next area to hop into a nasdq short
Strategy
Good Bye NasdaqTechnicals played out beautifully.
Remember guys the name of the game is SURVIVAL.
Dont be afraid to take profits, I took 90% of profits and I'm letting the rest run with a stop loss at BE.
Good trade boys.
XAUUSD Ready for a Rebound?The recent decline in the price of gold is primarily due to increased risk aversion, leading to a surge in demand for the US Dollar as a safe-haven asset. This shift is driven by persistent concerns regarding the Chinese property market, particularly the potential default of Country Garden's offshore debt if a payment due on Tuesday is not made. Additionally, the ongoing Hamas-Israel conflict is a significant factor dampening investor sentiment. Despite a rally on Wall Street following optimism about US and allied diplomatic efforts to mitigate the Middle East conflict, there is unease in the financial markets due to the lack of positive outcomes from a lengthy meeting between Israel President Netanyahu and US Secretary of State Antony Blinken. Investors are also exercising caution in anticipation of key third-quarter earnings reports from the United States. The recovery of US Treasury bond yields is further supporting the rebound of the US Dollar at the expense of the Gold price. This occurs even in the face of dovish comments from Philadelphia Fed President Patrick Harker, emphasizing a current stance against interest rate increases. Looking ahead, the focus is on the notable US Retail Sales data, which is anticipated to exhibit a 0.3% decline in September. Gold traders will closely monitor comments from various Fed policymakers. Additionally, updates on the Middle East conflict will continue to heavily influence risk sentiment, impacting both the valuation of the US Dollar and the actions of the Gold price. In fact, the market is moving between two swings, within a range between 1912 and 1923. At the moment, the price expectation seems more long-term, with a bounce at the intersection of the two trendlines at the 1914 level and a consequent readiness at the 1942 level where we have an H4 supply zone. Let me know what you think, comment, and leave a like to support our work. Greetings from Nicola, the CEO of Forex48 Trading Academy.
MS Morgan Stanley Options Ahead of EarningsIf you haven`t bought MS here:
Then analyzing the options chain and the chart patterns of MS Morgan Stanley prior to the earnings report this week,
I would consider purchasing the 85usd strike price Calls with
an expiration date of 2024-1-19,
for a premium of approximately $1.85.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Looking forward to read your opinion about it.
UNH UnitedHealth Group Incorporated Options Ahead of EarningsIf you haven`t sold UNH`s Double Top here:
or reentered the Double Bottom:
Then analyzing the options chain and the chart patterns of UNH UnitedHealth Group Incorporated prior to the earnings report this week,
I would consider purchasing the 530usd strike price Calls with
an expiration date of 2023-10-13,
for a premium of approximately $6.40.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Looking forward to read your opinion about it.
USD/CAD 1.35 with a divergence to be filled!The USD/CAD pair is struggling to make significant moves, hovering near 1.3650 during the European session. The start of the week for the US Dollar is lackluster, showing signs of stalling after a positive surge following the recent release of the US Consumer Price Index. Accommodative comments from various Federal Reserve officials suggest a likely continuation of unchanged interest rates into November, signaling a potential end to the tightening policy cycle. This, coupled with a positive outlook for US equity futures, is putting pressure on the safe-haven Greenback, giving a boost to the USD/CAD pair. However, the decline of the US Dollar is constrained by expectations of a prolonged period of higher rates, reinforced by recent US consumer inflation figures surpassing the Fed's target. Elevated US Treasury bond yields continue to support the US Dollar, but a slight decrease in crude oil prices may provide some support to the pair by undermining the commodity-linked Loonie. Caution is advised, and confirmation of market direction is awaited, especially after last week's rebound from the 1.3570-1.3565 range. Market participants are closely monitoring the US economic calendar, including the Empire State Manufacturing Index, as well as Fedspeak, US bond yields, and overall risk sentiment, which will shape the USD's trajectory in the North American session. Additionally, developments in oil prices will also influence the USD/CAD pair's path. Moreover, the price is in a support/resistance zone after the breakout of a bearish trendline, a trendline that could be retested before a continuation of the descent and filling the divergence present in the market, down to the 1.35 zone. Let me know what you think, leave a like and a comment to support our work. Greetings from Nicola, the CEO of Forex48 Trading Academy.
How to backtest Signals with different Risk to reward ratioHello traders , this is my very first video on this platform, so please bear with me as I plan to make better content in the future.
In this video, I aim to show you how to test your trading signals using various risk-to-reward ratios. The goal is to identify the most suitable ratio for your signals and create a profitable strategy.
What's crucial in strategy development is effective risk management and selecting the right risk-to-reward ratio. You might have a signal that performs poorly at a 1:1 ratio but becomes profitable at a 3:1 ratio. I'll explain how to use this indicator and why it can be highly beneficial for your trading.
In this section of the video, I'm demonstrating how to apply this method to internal signals like RSI, moving averages, and Supertrend.
Additionally, I'm planning to create another video to teach you how to backtest your own external signals.
Please let me know if this is something you'd like to learn more about.
GBP/USD at 1.23 by the weekend?The GBP/USD pair initially attempted a recovery but later reversed, falling below 1.2100 on Friday due to escalating geopolitical tensions, favoring the US Dollar. The Relative Strength Index (RSI) dropped to 40, signaling a short-term bearish outlook. The crucial level at 1.2200 holds psychological and technical significance. If confirmed as support, GBP/USD could recover to 1.2250 and 1.2300. However, failure to maintain levels above 1.2200 could invite selling pressure, with support identified at 1.2170, 1.2130, and 1.2100. Despite a loss of over 100 pips on Thursday, GBP/USD rebounded on Friday and stabilized above 1.2200.
US Treasury bond yields surged on Thursday following the September inflation report, strengthening the US Dollar. Despite a slight decrease in annual Core Consumer Price Index (CPI) inflation to 4.1%, specific report details revived expectations for a later Federal Reserve rate increase. 'Supercore inflation' increased by 0.6% monthly, highlighting persistent inflation components.
On Friday, the 10-year US T-bond yield corrected lower after a 3% surge on Thursday, making it challenging for the USD to extend recent gains. Meanwhile, US stock index futures registered a slight increase. If US yields continue to decrease in the latter part of the day, the USD may remain weak, allowing GBP/USD to rise before the weekend. Conversely, a cautious opening of Wall Street along with a recovery in US yields could exert downward pressure on the pair. The price is in a demand zone on the H4 chart and might attempt an upward movement with targets at 1.22/1.2250. It will be important to monitor a potential change in structure at M5/M15 during the London session tomorrow for a possible long entry. Let me know your thoughts, comment, and leave a like to support our work. Greetings from Nicola, the CEO of Forex48 Trading Academy.
EUR/USD Bullish outlook target of 1.07!In the final part of the American session, EUR/USD dropped to 1.0500 due to negative market sentiment, resulting in weekly losses despite a previous bullish movement. The pair fell below 1.0570, a significant level represented by the 100-period SMA and the 23.6% Fibonacci retracement. The RSI on the 4-hour chart dropped below 50, signaling a short-term bearish outlook. If EUR/USD manages to establish 1.0570 as a support level, it could gain momentum and target 1.0600 and 1.0640-1.0650. The main downside support levels are at 1.0500 and 1.0450 if 1.0570 is held. EUR/USD stabilized around 1.0550 on Friday after significant losses on Thursday, with technical analysis indicating a gradual decline in bullish momentum, although buyers might step in if 1.0570 becomes a support. The recent strength of the US dollar (USD) caused the decline of EUR/USD during the Thursday American session following the latest inflation data. The Consumer Price Index (CPI) in the United States increased by 3.7% on a yearly basis in September, with the annual core CPI slightly decreasing to 4.1% compared to the expected 4.3%. Nathan Janzen, Deputy Chief Economist at the Royal Bank of Canada, highlighted the increase in the Fed's "supercore" (core services excluding the rent component) and the annualized three-month growth rate in specific details of the report. US stock index futures showed a modest increase on Friday at the beginning of the day. In the absence of significant macroeconomic data releases, risk perception could influence the assessment of the USD and, consequently, affect the movement of EUR/USD before the weekend. A positive opening on Wall Street could reduce demand for the USD, while EUR/USD could decline if investors anticipate a further 25 basis points increase in Federal Reserve interest rates by the end of the year.
Now the price at the level of 1.0588 has retraced to 0.705 Fibonacci, and I expect a bullish impulse, considering the strong demand zone at H4. I will evaluate any structural changes at M15 to look for a bullish entry with a target of 1.07. Let me know what you think, comment, and leave a like. Happy trading and have a great weekend, everyone. Greetings from Nicola, the CEO of Forex48 Trading Academy.
Is NASDAQ Ready to Rebound Ahead of the Fed?The situation with the US technology stocks index in the last session was indeed rather dull, with a 0.37% decline in closing. The beginning was neutral, and then the trend continued to weaken during the trades. Currently, for the Nasdaq 100, a decisive ascent is anticipated, with a target set at 15,292.4. In case of a temporary correction, the nearest target is expected at 15,024.5. However, expectations are oriented towards a further increase up to the maximum level of 15,560.3.
In the current context, the price is within a demand zone ranging from 15,250 to 15,300. This zone is of particular interest to assess possible operational scenarios, especially for those seeking long continuation opportunities and potential entry patterns into the market. US economic data today will certainly be interesting and could influence market dynamics.
Greetings from Nicola, CEO of Forex48 Trading Academy. Feel free to comment and leave a like if you found this analysis helpful.
EURUSD: Retracement Awaiting the Fed!The EUR/USD currency pair continues to experience downward pressure, remaining below the 1.0550 level during the American trading session on Thursday. This is due to the sustained strength of the USD, which is impacting the pair following the latest US data release. The data showed that the annual Consumer Price Index (CPI) inflation in the US remained steady at 3.7% in September, surpassing the expected 3.6%. The daily chart for the EUR/USD pair indicates an ongoing decline, as the pair is sliding below the bearish 20-day Simple Moving Average (SMA). Technical indicators have also turned downwards and are within negative levels, suggesting that any bullish corrective movements have likely concluded.
In the short term, the 4-hour chart shows a similar pattern. EUR/USD is on the verge of breaking below a slightly bearish 100 SMA, having already dipped below the 20 SMA. Additionally, technical indicators are rapidly decreasing, approaching neutral levels. The pair has an immediate support level at 1.0560, and a more significant decline is expected once it drops below this level.
The EUR/USD pair reached its peak at 1.0639 during the London trading hours but stabilized around the 1.0610 price range just before the release of the United States (US) Consumer Price Index (CPI). The overall market sentiment was positive, with substantial gains seen in stock markets and ongoing declines in government bond yields leading up to the announcement.
In the latest US reports, it was noted that inflation had increased by 0.4% on a monthly basis in September and rose by 3.7% from the previous year, exceeding expectations. The annual core CPI was in line with expectations at 4.1%, showing a slight decrease from the previous 4.3%. Concurrently, the US released Initial Jobless Claims for the week ending October 6, totaling 209K, slightly better than the anticipated 210K. This news led to a strengthening of the US Dollar, given the higher inflation and a tight labor market, making a case for the Federal Reserve (Fed) to maintain its current stance.
Following these data releases, US government bond yields saw an increase, reflecting investor concerns, while Wall Street futures experienced a slight decline. Consequently, the EUR/USD pair dropped to the 1.0570 price range, losing its previously positive position.
USDJPY Will the BOJ Manage to Reverse the Course?The USD/JPY currency pair is trading sideways after a two-day winning streak. Despite positive PMI data, the US dollar is moving lower towards the 105.50 level. Bank of Japan (BoJ) policymaker Noguchi is not optimistic about wage growth acceleration. USD/JPY has interrupted its winning streak, currently trading lower around 149.00 during the Asian session. Challenges for USD/JPY stem from the possibility of the Federal Reserve (Fed) ending the rate-hike cycle, fueling speculation among investors. Fed Governors Christopher Waller and Michelle Bowman hold different views on rate hikes and inflation. The US Producer Price Index (PPI) rose in September, surpassing expectations. Attention now turns to the release of the Consumer Price Index (CPI) and the weekly Jobless Claims report. The US Dollar Index (DXY) is facing challenges due to subdued US Treasury yields. The Japanese Yen (JPY) weakens due to the BoJ's ultra-accommodative monetary policy. BoJ board member Asahi Noguchi highlights the challenges in achieving the 2% inflation target and emphasizes the importance of wage growth. Noguchi suggests flexibility in maintaining an accommodative policy under the Yield Curve Control (YCC) to balance economic recovery and manage inflation expectations as the Japanese economy gradually recovers. On the chart, a strong demand zone can be observed from the level 148.4 to 148.95, which the price has used for a strong supported restart from the US CPI data, in addition to identifying an uptrend line. The goal will be to wait for the price at the intersection of the two trendlines and then evaluate a long entry. Leave a like and comment, greetings from Nicola, the CEO of Forex48 Trading Academy.
📕Low-Quality setups (UNCLEAR) VS High quality (CLEAR) setups📕High quality (Clear) vs Low Quality (Unclear, wicky, random, guessing)
Setups in Our Trading
High quality clear (HQC) setups are best representations of your EDGE, they allow you to feel confident in the MOMENT of placing a trade, and you can feel relatively good about it even if it’s a loser, because you know you traded in clear market environment and did your best
HQC setups bring you HEALTHY excitement and joy from the process of your trading, in case of a winner, usually not leading to overconfidence and doesn’t lead to attachment to random reward, and in case of a loser - you are not dragged into revenge or depression, because you know losers are also part of your strategy and your execution was good
When you enter HQC setups that speaks about you as about a trader you tested their strategy, who knows what they want to see in the market and applied effort to stay away from bad condition and wait for a better one. These skills alone are so much better than 1 random +3R or +5R winner
Low quality unclear (LQU) setups mean something is out of your mental game today, you feel not feel good in longterm perspective trading them, because you kind of KNOW you should trade them, but you still do. It all sucks you into an emotional circle.
LQU setups bring you UNHEALTHY , short term lived overexcitement in case of a winner, attaching you to random rewards, which is fatal for a trader. Every time entering a LQU setup you develop a habit or “teach” yourself that it is easy and fast way of earning money. Just see something distantly reminding about your setup and enter. Sometimes you’ll get away, but longterm you’ll lose more.
LQU setups means you are you fully confident in your core strategy, and so you may unconsciously search for random entries, because you entered like this before and it brought you reward. Trading LQU setups is destroying your mental game and account in the short, medium and longterm
Picture attribution Frame Border PNGs by Vecteezy
XAU/USD: Impact of Conflict and FOMC MinutesGold hit a two-week peak during the Asian session, indicating a continued and robust recovery from a recent low near $1,810. Geopolitical tensions in the Middle East strengthened gold's position as a safe-haven asset. The XAU/USD pair remains close to its daily peak, displaying persistent bullish momentum. However, it is trading below the bearish 20-day Simple Moving Average (SMA), presenting dynamic resistance around $1,880. Technical indicators are trending upwards within negative levels, indicating ongoing buying interest but without confirming a definitive bullish trend. The short-term risk seems tilted towards an upward trajectory, encountering a slight bearish challenge from the 100-day SMA while the 20-day SMA trends firmly upwards. Despite maintaining positive levels, technical indicators lack a clear directional signal. The Momentum indicator shows a bearish divergence, stabilizing below a recent high. Key support and resistance levels are provided. Moreover, recent fluctuations in gold's value are attributed to a weakening US Dollar and declining US Treasury bond yields due to safety demand amid geopolitical events in the Middle East. Expectations of a Federal Reserve (Fed) rate hike have decreased, affecting bond yields. Investors are cautious following the release of the US Producer Price Index (PPI) and ahead of the Consumer Price Index (CPI) release. The CPI is projected to rise by 3.6% YoY. Have a good trading day everyone, greetings from Nicola, the CEO of Forex48 Trading Academy.
GBP/USD: Will CPI Halt the Advance?The GBP/USD exchange rate found support at 1.2275 after a pullback from weekly highs. Following the release of the FOMC minutes, the US dollar experienced a moderate decline, pushing the GBP/USD pair back towards the 1.2300 level. Attention is now focused on the upcoming release of monthly GDP data in the UK and the Consumer Price Index (CPI) in the US scheduled for Thursday. GBP/USD remains above the ascending trend line, with the Relative Strength Index (RSI) on the 4-hour chart indicating a bullish trend, hovering around 60.
On the positive side, the main support level is at 1.2300, representing both a psychological level and a Fibonacci retracement of 38.2% from the latest downtrend. If the pair manages to surpass this level and stabilize, the next targets would be 1.2350 (a static level) and 1.2380, where the 200-period Simple Moving Average (SMA) is located.
On the downside, intermediate support levels are situated at 1.2250 (20-period SMA, ascending trend line), followed by 1.2200 (Fibonacci retracement of 23.6%, 100-period SMA) and 1.2175 (50-period SMA).
On Wednesday, GBP/USD rose above 1.2300 for the first time since September 22 but struggled to gather further bullish momentum. The shift in risk sentiment could limit the pair's upside in the short term. However, the US dollar (USD) may find it challenging to maintain its strength if policymakers convey dovish remarks.
Nevertheless, officials from the Federal Reserve in San Francisco, Mary Daly, and Atlanta, Raphael Bostic, both argued on Tuesday that the current policy is sufficiently restrictive to bring inflation back to the 2% target. Bostic emphasized that an additional rate hike was unnecessary, while Daly noted that the recent increase in US yields could be considered equivalent to another rate increase.
On a more hawkish note, Federal Reserve Governor Michelle Bowman stated that the policy rate might need to rise further and remain restrictive for some time to achieve the Fed's inflation target. She cited healthy spending activity and tight labor market conditions to support her position. This comment appears to be helping the US dollar maintain its position.
Meanwhile, US stock index futures remained virtually unchanged, indicating investors' reluctance to bet on an extended risk rally.
Later in the day, both Raphael Bostic from the Atlanta Federal Reserve and Christopher Waller from the Fed are scheduled to deliver speeches. Bostic has expressed a preference for keeping the policy rate steady, suggesting that his remarks are unlikely to trigger a significant market reaction. During Waller's last speech, he mentioned the need for more data to conclude whether the Fed was done raising rates. If Waller emphasizes that there is no immediate need for further tightening, the US dollar could continue to weaken against its rivals. Comment and leave a like, greetings from Nicola the CEO of Forex48 Trading Academy.
EUR/USD is consolidating ahead of the FOMC!EUR/USD trims its gains for the day, hovering around the key psychological level of 1.0600 during the European session on Wednesday. The pair received some upward support due to a correction in the US Dollar (USD), likely influenced by speculations about a potential pause in the interest rate-hike cycle by the US Federal Reserve (Fed). If the pair decisively breaks below this level, it may face increased downward pressure, potentially targeting the area around the nine-day Exponential Moving Average (EMA) at 1.0572, followed by the significant level at 1.0500. On the upside, resistance for the EUR/USD pair could materialize around the 23.6% Fibonacci retracement level at 1.0643. A solid breakthrough beyond this could pave the way for further exploration toward the psychological level at 1.0650. The Moving Average Convergence Divergence (MACD) line currently sits below the centerline, indicating that the short-term average is trailing the long-term average. However, an important observation is the divergence of this line above the signal line, suggesting a potential shift in momentum toward a bullish trend. Nonetheless, the prevailing momentum for the EUR/USD pair remains bearish, highlighting a persistent weaker bias, as indicated by the 14-day Relative Strength Index (RSI) holding below the 50 level. Comment and leave a like, greetings from Nicola the CEO of Forex48 Trading Academy.
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USD/JPY Ready for a Downturn After BOJ?The USD/JPY exchange rate experienced a rebound, trading higher around 149.00 during the European session due to a positive risk sentiment amidst the Middle-East conflict. The Japanese Yen did not respond to the Bank of Japan's consideration of revising core inflation estimates upward. Federal Reserve's remarks led investors to downplay the possibility of further rate hikes. The recovery of the US Dollar contributed to the rebound. The ongoing Middle-East conflict shifted investors towards the US Dollar, putting pressure on the safe-haven Japanese Yen. The conflict escalated when Hamas initiated an attack on Israel, prompting a decisive response. The Bank of Japan is considering an upward revision of the core Consumer Price Index estimate for the fiscal year 2023/24. Japan's non-seasonally adjusted Current Account for August fell below forecasts. The Japanese economic calendar for the week only includes low-impact data. Japan will lead a G7 meeting to discuss the war in Ukraine and the global economy. The US Dollar Index is around 106.00, despite strong US Nonfarm Payroll data and a decline in US Treasury yields. Federal Reserve officials' remarks indicated a cautious approach to rate hikes, influencing the depreciation of the US Dollar. Investors are focused on upcoming inflation figures and the FOMC meeting minutes later in the week. Additionally, there is a strong bearish trendline after the break of a bullish trendline at the 150 level that is supporting the sharp decline. I am considering a possible short with liquidity take profit down to the 147.30 level. Let me know what you think. Regards from Nicola, CEO of Forex48 Trading Academy.
EUR/USD Pauses, Awaiting FOMC and CPI!The EUR/USD exchange rate is above 1.0550, supported by a slight decline in the US dollar and decreasing US bond yields, while a positive risk tone weakens the dollar. Traders are awaiting key data for the week, including FOMC minutes and the US Consumer Price Index. The EUR/USD is below the 20-day Simple Moving Average (SMA) and within a downtrend channel, but in the short term, it shows signs of stability, suggesting a possible test of key resistance levels. On the 4-hour chart, the price is above the 20-period SMA and consolidated above 1.0560, with the next resistance at 1.0580 and potential testing of last week's highs at 1.0600. The short-term bullish bias remains intact as long as the price stays above 1.0530, but a break below 1.0520 could target the area of 1.0500, indicating further weaknesses ahead. During the American session, the EUR/USD rose but remained below Friday's close, as the weakness of the US dollar was not sufficient to push the pair above 1.0600, and the euro was the weakest among the G10 currencies on Monday. New geopolitical concerns particularly weighed on the euro, causing it to decline against other major currencies. The 10-year German bond yield dropped by over 4.50% to 2.76%, with EUR/CHF sliding towards 0.9550, and EUR/GBP falling below 0.8640. Data showed a 0.2% decrease in German industrial production in August, worse than the expected 0.1% decrease. Investor confidence in the Eurozone also dropped in October to -21.9, higher than the market consensus of -25. No significant reports are scheduled for release on Tuesday in either the Eurozone or the US. The key figure of the week will be the US Consumer Price Index on Thursday. The US dollar strengthened across the board during the American session, benefiting from an improvement in risk sentiment following the market opening after Hamas' attack in Israel. The US Dollar Index (DXY) peaked at 106.60 but then pulled back to 106.00, ending with modest losses due to a decline in US bond yields. Additionally, on the H4 chart, the price is within a strong demand zone at the 1.0560-1.0480 level, and in this zone, a strong long reaction is expected for an upward continuation to the 1.0645 level, where we have an H4 supply zone and a downtrend trendline. The price in the Asian session has made a swing high, which could hinder the price's further rise. It will be important to assess the New York opening today to evaluate any position-taking. Looking forward to your feedback, comments, and likes. Greetings from Nicola, CEO of Forex48 Trading Academy.
Is a Nasdaq Pullback Coming?Excellent performance of the US technology index, with an increase of 1.70%. The day started weak, opening at 14,622.2 points, surpassing the previous session's lows. Throughout the day, the quotes strengthened, closing at 14,973.2, near the session highs. In the medium term, the Nasdaq 100 shows a negative trend. In the short term, there is the possibility of a slight upward movement, encountering resistance in the first area at 15,109.1. The first support is identified at 14,701.5. If positive signals occur, further growth is likely with a target at 15,516.7. I look forward to your feedback. Best regards, Nicola, CEO of Forex48 Trading Academy.
GBP/USD anticipates an upturn towards 1.2250GBP/USD continued its decline following the bearish opening, dropping below 1.2200 on Monday. This was attributed to the strengthening of the US dollar amid escalating geopolitical tensions in the Middle East and speculations of a more restrictive Fed monetary policy. The Relative Strength Index (RSI) on the 4-hour chart remained above the 50 level despite the decline. Key resistance is set at 1.2200 (psychological level and 23.6% Fibonacci retracement). If the pair stays below this level, potential tests include 1.2150 (50-period Simple Moving Average), followed by 1.2120 (upper limit of a broken descending regression channel) and 1.2100 (psychological level, static level). However, if GBP/USD rises and stabilizes above 1.2200, it may encounter resistance at 1.2230 (100-period Simple Moving Average) before reaching 1.2250 (static level). Last week, GBP/USD closed nearly unchanged after a steady rebound in the latter part of the week. The new week began with a bearish gap and a decline below 1.2200 due to a flight to safety, prompted by escalating tensions in the Middle East. The US Dollar (USD) gained from safe-haven flows, causing the USD Index to rise above 106.50 after a recent three-day slide. Notably, Israel responded to Hamas rocket attacks from the Gaza Strip, resulting in a death toll exceeding 1,100. The USD benefited from safe-haven demand, and the USD Index rose 0.4% on the day, recovering from its previous week's decline. On this day, US bond markets were closed for Columbus Day, while stock markets remained open, potentially influencing USD valuation. A bearish trend in US stocks could further bolster the USD's strength during the American session. Federal Reserve Governor Michelle Bowman emphasized the need for continued tightening of monetary policy to maintain inflation at the 2% target. The US economic calendar lacked significant releases, directing investor focus toward risk perception. Additionally, in the market, we have a price that bounced back to the 1.2160 level, where we have a bullish trendline and a bullish divergence on the 15-minute chart, indicating a clear bullish view up to 1.223-1.225. Let me know what you think, happy trading from Nicola, the CEO of Forex48 Trading Academy.
USD/CAD: The Impact of War and Oil!During the first Asian session on Monday, the exchange rate between the US dollar (USD) and the Canadian dollar (CAD) continued to decline for the third consecutive session, settling around 1.3650. This drop is primarily influenced by a significant increase in oil prices, presumably linked to the ongoing military conflict between Palestine and Israel. This situation is putting pressure on the Canadian dollar, especially considering that Canada is the main oil exporter to the United States. Additionally, positive employment data in Canada may have helped support the value of the Canadian dollar. In September, a significant increase in new jobs (63.8K) was recorded, surpassing market expectations (20.0K) and exceeding the 39.9K in August. The unemployment rate remained stable at 5.5% for the month, in line with market expectations of 5.6%. The market is attentive to the escalating military conflict between Palestine and Israel, as this situation could have global geopolitical implications if it intensifies and spreads to other parts of the region. The US dollar (USD) rebounded after three consecutive days of losses, stabilizing around 106.20, thanks to strong Nonfarm Payrolls data released last Friday. In September, a significant increase in new jobs (336,000) was reported, surpassing market expectations of 170,000. The revised figure for August was 227,000. However, the average hourly earnings (MoM) remained steady at 0.2% in September, below the expected 0.3%. On an annual basis, a 4.2% increase was reported, below the anticipated steady figure of 4.3%. US Treasury yields also increased, driven by expectations that the Federal Reserve (Fed) will maintain higher interest rates for an extended period. At the time of writing, the 10-year US Treasury bond yield is around 4.80%, close to the 2007 peak. Investors will closely monitor the upcoming meeting of the International Monetary Fund (IMF), during which strategies to stabilize international exchange rates and promote economic development will be discussed. Additionally, attention will be focused on the US Core Producer Price Index later in the week, as it plays a crucial role in analyzing inflationary trends and economic conditions in the United States. Furthermore, I would like to point out an important resistance/support zone at the level of 13640, in which it will be important to evaluate a potential price reaction for considering a possible short or long entry. Moreover, a bearish trendline configuration has formed, making one think more about a structural change to the downside at this moment. Let me know what you think, happy trading to all, greetings from Nicola, CEO of Forex48 Trading Academy.
XAUUSD: Accumulation Ahead of NFP Data!Gold price is in a slightly bearish phase, staying below $1,820 due to the impact of the yield of the 10-year US Treasury bond, which is above 4.7%. This situation makes it difficult for XAU/USD to undertake a significant recovery. Technical analysis on the daily chart indicates a bearish trend for XAU/USD, with indicators showing an abundance of sell signals in heavily oversold territory, without signs of downward exhaustion. The momentum indicator is accelerating downward, reaching around 94, while the relative strength index (RSI) is at 18. Meanwhile, moving averages confirm the bearish strength, well above the current level, highlighting the sellers' dominance.
Analyzing the 4-hour chart, the risk of further declines is evident. A simple 20-day moving average acts as dynamic resistance around $1,824.10. This indicates that XAU/USD is under the control of sellers, as confirmed by technical indicators that turned downward after a temporary correction in negative levels, reflecting the lack of interest from buyers despite the extremely oversold condition of the US dollar.
Regarding support and resistance levels, it is expected that gold may find support at $1,804.70, $1,792.10, and $1,779.85, while it may encounter resistance at $1,824.10, $1,833.35, and $1,845.20.
The spot price of gold is touching new multi-month lows, reaching $1,813 per troy ounce. Despite the extremely oversold conditions of the US dollar, the precious metal fails to attract buyers. The market is concerned about persistent inflationary pressures and a tight labor market, which could lead the Federal Reserve (Fed) to further monetary restrictions, with the consequent risk of an economic recession. Hawkish comments from Fed officials this week and mixed signals from the employment sector keep these concerns alive, awaiting the Nonfarm Payrolls report for September. It is expected that 178,000 new jobs will be added in the month, while the unemployment rate is expected to contract from 3.8% to 3.7%. Before the event, US Treasury yields have slightly stabilized after reaching historical peaks. The yield on the 10-year Treasury note is currently at 4.72%, slightly down from a 16-year high of 4.88%, while the 2-year note offers 5.02% after soaring to 5.20% in mid-September. Lower yields prevent the US dollar from rallying in the short term. Furthermore, at the 1916 level, it seems that the price is accumulating for an imminent rise or fall. At the moment, my view is still long, with the price in the buy zone. It will be crucial to assess tomorrow's NFP data, which will definitely shake a price that has been too stagnant for days. Let me know what you think. Happy trading from Nicola, CEO of Forex48 Trading Academy.
