EURUSD

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Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday June 21st and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Currency market speculator bets overall were mixed this week as five out of the eleven currency markets we cover (Note: Russian Ruble positions have not been updated by CFTC since March) had higher positioning this week while six markets had lower contracts for the week.

Leading the gains for currency markets was the Japanese yen (11,301 co

USD continues to weaken on hopes of further stimulus

USD continues to weaken on hopes of further stimulus

John Benjamin John Benjamin 02.12.2020 10:36
Euro Rises To The Highest Levels Since 2018The euro currency is posting strong gains, rising over one percent on the day. The gains largely on the back of a weakening US dollar.Earlier on Monday, the euro gave back the gains after testing the 1.2000 level. However, this decline saw prices retesting the trend line for support.A rebound from this trend line saw price action breaking past this previous resistance level.At the time of writing, the EURUSD currency pair is trading above the 1.2000 level.The Stochastics oscillator is however posting a lower high. This could signal a possible correction in the near term.The lower price level of 1.1900 is likely to act as support during this retracement.GBPUSD Attempts To Break The Trend LineThe British pound sterling is posting strong gains on the back of a weaker dollar. After price action consolidated above the 1.3300 level, the cable is attempting to push higher.For the moment, prices are stuck near the trend line. As long as the trend line holds as resistance, we could see the sideways consolidation to continue.However, in the event of a breakout off the trend line, then the GBPUSD will be aiming for the 1.3500 level next.For the moment, with the support level firmly established at 1.3300, the GBPUSD will be looking to make further gains to the upside.WTI Crude Oil Losing The 45.00 HandleOil prices are trading weaker on Tuesday. The declines come despite the US dollar taking a strong hit.The move to the downside comes after oil prices failed to make any big moves to the upside.As a result, WTI crude oil was consolidating around the 45.00 level for a considerable period of time.After losing this handle, oil prices are likely to push lower. The next key support is near the 43.50 level.However, we expect the pullback to see prices retracing the 45.00 handle.If resistance is firmly established here, then we could expect to see further declines down to the 43.50 level.Gold Prices Get A Boost From Weaker USDThe precious metal has been posting strong gains on the back of the US dollar. Gold prices are up nearly 2% intraday on Tuesday.The rebound also coincides with the impending correction in gold, as mentioned a day before. For the moment, we expect prices to retrace to the 1817.80 level.If this level holds, then gold prices could establish resistance. This will in turn renew the downside bias in the precious metal.The 1800 level once again comes into the picture, with the potential for gold to post further losses.
USD remains soft as US stimulus talks drag on

USD remains soft as US stimulus talks drag on

John Benjamin John Benjamin 08.12.2020 09:09
EURUSD Pulls Back Off Recent HighsThe euro currency was trading soft on Monday with price action closing nearly flat.This comes as the euro continues to post a modest descent after briefly testing above 1.2170 last Friday.For the moment, a local swing low has formed near 1.2080. As long as this low holds, we could see price action resuming the uptrend.However, a close below this low and a potential retracement back to this level could confirm the downside.The key support area is likely to come from the dynamic support of the trend line. This is likely to coincide near the 1.2000 level in the near term.GBPUSD Drops As Brexit Trade Concerns MountThe British pound sterling was trading rocky on Monday as prices were in a steady decline since morning.This comes as the UK and the EU continue with the post-Brexit trade talks which have failed. The GBPUSD fell, as a result, briefly slipping below the 1.3300 level of support.However, price recovered off the lows before managing to close above this level once again.For the moment, it seems like the 1.3300 level will hold out as support. But if price breaches this level, then we could expect further declines.The Stochastics oscillator is currently nearing the oversold levels, which could suggest a possible retracement in the near term.WTI Crude Oil Gives Back GainsOil prices are trading weaker, down about 0.18% on the day. The declines come after oil price posted steady gains into last Friday’s close.However, price action is pulling back after testing new highs of above 46.50. The declines could see price stalling near the 45.26 level of support.As long as this support holds, we could expect the upside to resume. Oil prices will need to break past the previous highs to confirm the continuation to the upside.However, failure to post new highs could signal a move lower.A close below 45.26 could potentially expose oil prices to test the support level of 43.50 next.Gold Prices Rise 1%, Breaking Past 1850The precious metal is posting a strong recovery as price action zoomed past the 1850 handle.The gains come after gold prices managed to settle comfortably above the key price level of 1818.80.With the 1850 level giving way to further gains, gold prices could continue higher.The next key level of interest is the 1911.50. But prices could likely test this level if there is some support forming near the current levels.This could mean that gold prices might retrace back to the 1817.80 or the 1850 levels.
USD rises slightly off the two- and half-year lows

USD rises slightly off the two- and half-year lows

FXMAG Team FXMAG Team 09.12.2020 16:00
Euro Drops As ECB Meeting LoomsThe euro currency’s declines accelerated on Wednesday. The common currency is trading below the 1.2100 level which it held over the past few days.The declines come as the ECB will be holding its monetary policy meeting. Speculation is high that the central bank will increase its bond purchases.The current declines could stall near the dynamic support off the rising trend line. This could see a confluence of the 1.2000 level holding up for the moment.However, if the 1.2000 level breaks, then the next key support to look for will be the 1.1900 level.To the upside, price action could stall near 1.2100.GBPUSD Volatile Within A Flat RangeThe British pound sterling is giving back the gains made earlier. The volatility stems as Brexit negotiations drag on with no clear plan yet.The GBPUSD is currently settled within 1.3483 and 1.3300 levels. While the lower end of the range was briefly tested earlier this week, it has held up.The current pace of declines could see the 1.3300 support level coming under pressure once again.If the cable loses this support, then we could expect to see further declines.The next key support level is near 1.3122.Crude Oil Falls Back To 45.50 SupportOil prices continue to trade weak above the 45.50 level. Prices fell once again on Wednesday, testing the 45.50 level of support.So far, no new highs have formed. This consolidation could lead to a potential correction if support gives way.Below the 45.50, the next key support area is seen at the 43.50 level. We could expect this support level to hold in the near term.It would also mean that oil prices could continue trading flat within the newly established range below the 45.50 level.The Stochastics oscillator is also signalling a move lower. This could possibly confirm the downside bias for the moment.Gold Edges Down To 1850 SupportThe precious metal is seen retesting the support level of 1850 once again.This comes as prices barely rose close to the 1880 level before giving back the gains. The market sentiment remains mixed leading to the rather flat price action for the moment.However, the 1850 level will be critical. If gold prices lose this handle, then we could expect further declines to the 1800 level once again.This would come as gold prices will likely test the 1817.80 level to the downside.
USD flat amid new talks of stimulus bill

USD flat amid new talks of stimulus bill

FXMAG Team FXMAG Team 16.12.2020 09:16
EURUSD Likely To Challenge Previous HighsThe euro currency is once again back on the front foot as price action inches closer to test the previously established two and a half year high at 1.2176.The gains come as the common currency eased back from its declines earlier this week. Currently, the upside momentum is held by the support from the trend line.However, it will now be critical for the euro to break past the previous barrier. Failure to break out from this two and half year high could result in a possible reversal in price action.This would in turn once again shift focus to the downside.The key support level is near 1.1900. Therefore, in the event that the EURUSD fails to break out any higher, we could probably expect a near term correction in price action.GBPUSD Continues To Trade Flat, Above 1.3300The British pound sterling continues to trade flat albeit, price action is firmly supported above the 1.3300 level.Following the gap higher at the start of the week, the GBPUSD has been pushing lower. For the moment, there remains an unfilled gap from Monday’s open.To the upside, price action is trading well below the key upper range of 1.3483. The weakness in the US dollar is currently helping the British pound to push higher.However, it is unlikely to see any major gains coming in the near term.We expect the sideways range to be held until there is some kind of a resolution to the ongoing Brexit talks between the EU and the UK.WTI Crude Oil Advances To A Nine-Month HighOil prices are trading bullish once again following the previous few sessions where price action was rather subdued.As the bullish momentum slowly grips, oil prices are seen advancing to the previously formed nine-month high.A continuation to the upside could possibly see prices testing a new ten-month high shortly. This would mean that prices would near the 48.00 level for the moment.It would also put oil prices just $2 away from the psychological barrier of $50. The current gains to the upside are supported both by the technicals and the fundamentals in the markets.The key support level at 45.00 remains the downside for the moment.However, it is unlikely that we would see a sharp correction coming anytime soon.Gold Prices Back Near 1850 Technical ResistanceThe precious metal is trading over 1% on Tuesday.The gains come amid fresh talks in the US Congress about a new proposed coronavirus stimulus bill. If this bill is passed, this would put an end to the weeks of speculation in the markets.Gold prices have been trading rather flat after rising above the key support level of 1818.80 in early December this year.For the moment, the technical resistance level of 1850 is being tested once again.However, the stochastics oscillator on the four-hour chart is likely to print lower.This could mean that gold prices could once again retreat back and settle within the range of 1850 and 1818.80.
USD subdued on US Stimulus and Brexit deal outcome

USD subdued on US Stimulus and Brexit deal outcome

FXMAG Team FXMAG Team 14.12.2020 08:00
EURUSD Fails To Post New Highs The euro currency’s rebound after the ECB meeting saw prices rising only to highs near 1.2150. Following this, price action retreated, edging closer back to the rising trend line. We expect the trend line support to once again come into the picture. As long as this support holds, the EURUSD might be looking to aim higher. In the event that the common currency loses the trend line support, then we expect price action to fall toward the 1.2050 level, marking the December 9 lows. To the upside, the EURUSD will have to break out above the previous highs of 1.2178 to continue the uptrend. GBPUSD Loses The 1.3300 Support The British pound sterling slipped below the support level of 1.3300 on Friday. This comes as Brexit talks come to a head. For the moment, the lower support near 1.3122 remains the key price point. As long as this support level holds, there is scope for the GBPUSD to push higher. However, prices will need to break out strongly above the 1.3300 level to continue the uptrend. This will then open the GBPUSD to the upper resistance level of 1.3483. To the downside, a close below 1.3122 could open the way for the cable to retest the 1.3000 round number support once again. Oil Prices Pull Back From A Nine-Month High WTI Crude oil prices rose sharply on Thursday to rise close to the 48.00 level. However, prices pulled back into Friday’s close. This comes as the 45.00 level is firmly establishing as support. Thus, a pullback could see this support level being tested once again. The Stochastics oscillator on the 4-hour chart remains mixed. There is enough room for prices to breakout higher. Above the 48.00 level, oil prices will be contending with a retest of the 50.00 level. To the downside, below the 45.00 support area, a correction could bring the commodity down to test the 44.00 handle next. Gold Settles Within The 1850 And 1825 Range The precious metal continues to trade flat for the second consecutive session. As a result, price action is trading within a tight band of the 1850 and the 1825 levels in the near term. The Stochastics oscillator remains biased to the downside. This could mean that if gold prices lose the 1817.80 level of support, then we expect the downside to continue. The next key level of support will be near the 1750 level. It would also mean that gold prices will be moving lower beyond the 30th November lows of 1764.22. To the upside, price action will need to firmly close above 1850 and continue to the 1900 level to establish the uptrend.
Dollar rises as Trump signs Stimulus bill

Dollar rises as Trump signs Stimulus bill

John Benjamin John Benjamin 29.12.2020 08:56
EURUSD Heading LowerThe euro currency attempted to rise higher but gave back the intraday gains. The rebound off the 1.2177 level of support was met with resistance from the trendline.With prices heading lower, the previous support level near 1.2177 comes under pressure.The Stochastics oscillator is also signaling a hidden bearish divergence. This could mean that price action will drift lower if the support breaks.Below 1.2177, the next key area of support will be the 1.2050 level.Given that this support area was not firmly tested before, we expect to see a possible test of this level.GBPUSD Gives Back Gains As Brexit Euphoria FadesThe British pound sterling is down over 0.6% on Monday. The declines come following last week’s rebound above the 1.3506 level of support.But as the trade deal euphoria fades, prices are drifting lower. As a result, the cable is likely to continue pushing lower.The next key level of support comes in at 1.3210. There is a possibility that the GBPUSD could establish minor support ahead of the decline to 1.3210.To the upside, a rebound could see the 1.3506 level being tested once again.If resistance forms here, then we expect to see a possible confirmation of prices heading lower.WTI Crude Oil Could Likely Form A TopOil prices maintained their bullish continuation with prices rising in early Monday trading. However, after rising to intraday highs of 48.94, the commodity gave back the gains, forming a lower high.If prices break down below the pivot lows of 47.76, then this will confirm that a top is in place. The next support level of interest comes near the 47.17 level.Below this minor support, oil prices could be on track to post further declines.The support area near 45.26 will come into the picture.The Stochastics oscillator is overbought at the moment, validating the short term move lower.Gold Prices Trade Flat Near Previous Swing HighsThe precious metal is on track to close flat on the day for Monday. This comes as prices attempted to rise intraday.However, as the momentum fizzled out, gold prices form a lower high. This could potentially trigger a short term decline.For the moment, the initial support level near 1859.50 comes into the picture. As long as this swing low from December 22 holds, there is scope for a rebound.But a failure at this level will open the way for further declines. The 1850 level of support comes into the picture.Despite the short term declines, gold prices are likely to remain supported at or near the 1850 level for the moment.
GBPUSD Settles Comfortably Higher. Dollar strengthens slightly on year end flows

GBPUSD Settles Comfortably Higher. Dollar strengthens slightly on year end flows

John Benjamin John Benjamin 04.01.2021 08:22
EURUSD Drops Into The Year-End The euro currency was down over 0.63% into the yearly close. The declines come amid thin trading and the US dollar posting a modest rebound. The euro currency has been consolidating near the rising trend line over the past few days. While price action was making modestly higher highs, the pace of gains was gradual. The slowing momentum has led to a decline off the trendline consolidation. If the current declines continue, the euro could be looking to test the 1.2177 level of support. However, with the Stochastics oscillator somewhat oversold we may expect to see a modest rebound in prices. The British pound sterling is maintaining a bullish hold with prices posting a gradual rally since 29 December. The pace of gains, however, is likely to stall given the Doji candlestick patterns near the current levels. A bearish follow-through is required in order to confirm the downside. This could potentially see the GBPUSD falling to the 1.3500 level of support. As long as this support holds, the GBPUSD could be looking to make a rebound once again. With the threat of a hard Brexit now out of the way, the GBPUSD is likely to focus back on the fundamentals. The Stochastics oscillator remains overbought at the moment, indicating a possible correction in the near term. WTI Crude Oil Consolidates Near Current Highs Oil prices are trading flat ever since prices touched intraday highs of 49.29 on 21 December. Since then, oil prices pulled back and are trading in a sideways range. For the moment, this sideways range is likely to continue. However, the OPEC+ meeting today could offer something for oil investors. Depending on the outcome, oil prices could see a possible move in either direction. To the downside, support at 47.17 remains. As long as this support holds, oil prices are likely to maintain the upside bias. To the upside, a close above the 21 December highs of 49.29 is required in order to confirm further gains. Will Gold Breakout Higher? The precious metal was seen consolidating near the 1900 level. Price action previously tested this level before pulling back recently. In the process, we have a potential ascending triangle pattern emerging. If the 1900 level of resistance breaks, then we expect to see further gains coming. A breakout above 1900 will validate the bullish ascending triangle. It puts the next minimum target in price action toward 1922 at the very least. But this would also put gold prices above the 1900 level which has proven hard to break as both a resistance and support level previously.
USD extends losing streak into 2021

USD extends losing streak into 2021

John Benjamin John Benjamin 05.01.2021 09:19
Euro Gaps Higher Testing December HighsThe euro currency gapped higher on the open on Monday as traders returned from the year-end holiday.The US dollar resumed its declines from 2020 pushing currencies such as the euro higher. The common currency briefly rose to test the Dec 30, 31 highs before pulling back.If price action continues on the pullback, we could see a near term decline. This would potentially make way for a triple top pattern as well.A break down below January 1 lows of 1.2121 could validate the bearish pattern. For the moment, the EURUSD is likely to trade within the highs and lows of 1.2312 and 1.2121 respectively.Sterling Falls On Risk Of Lockdown MeasuresThe British pound sterling is posting steep losses on Monday.The declines come amid threats of new tougher lockdown measures in the United Kingdom. The one day implied volatility is once again pushing higher.After trading near the highs, Monday’s bearish close could confirm the downside. This would potentially open the way for the GBPUSD to test the 1.3500 level of support.As long as this support holds, it remains within the long term uptrend. However, the GBPUSD will need to post higher highs to confirm this.Failure near the 1.3500 could open the way for the GBPUSD to extend declines lower to the 1.300 level.WTI Crude Oil Pulls Back From Multi-Month HighsOil prices rose to multi-month highs on Monday in anticipation of the OPEC+ meeting. Furthermore, tensions in the Middle East also added to the bullish fundamentals.Prices rose to highs of 48.97 before giving back the gains. For the moment, oil prices remain consolidated near the current levels between 46 and 49.The uptrend since early November remains intact for the moment. Only a strong close and a lower high around the 46.00 level will confirm otherwise.For the moment, oil prices will need to establish support near the 48.00 level to continue pushing higher.Gold Rises To An Eight-Week HighGold prices popped higher as the US dollar continued to extend declines. The pace of gains in the precious metal was however bigger, rising almost 2% intraday.The gains come amid a mixed set of narratives, including the Georgia senate runoff election.Price action has finally emerged from the consolidation from which there has been an ascending triangle pattern.The current gains put gold prices within reach of the 1950 level next. A strong close above this level is required to confirm further upside.To the downside, we expect prices to retest the 1900 – 1911 level in the short term to establish support.
GBPUSD Gives Back Gains From Previous Day

GBPUSD Gives Back Gains From Previous Day

John Benjamin John Benjamin 07.01.2021 09:47
Dollar recovers from a fresh two and half year lowEURUSD Pares Gains Near Trend-LineThe euro currency is down about 0.20% intraday. The declines come right after the common currency rose to a new two and a half year high.However, the test of the trendline from below indicates strong resistance here. For the moment, the current continuation remains questionable.The euro currency will need to post a strong decline and a lower high to confirm the start of a correction.For now, the initial support is near the 1.2215 level. As long as this level holds, the upside bias in the euro remains intact.The Stochastics oscillator is also quite overbought and gives scope for further declines in the common currency.The British pound sterling is seen giving back the gains made on Tuesday. This puts price action to trade rather flat but increases the downside bias.On the short term charts, the formation of a lower high indicates that the pound sterling could push lower.However, prices will contend with the initial support level near 1.3506. As long as this level holds, there is scope for the GBPUSD to make gains.However, if prices close below this level convincingly, then there is scope for a continuation to the downside.This will bring the sideways range of 1.3500 and 1.3100 back into focus.Oil Gains As Saudi Cuts OutputWTI crude oil touched $50.00 a barrel on Wednesday in the early Asian session. The gains came after the OPEC+ meeting saw Saudi Arabia cutting oil output by one million barrels per day.The rise to $50.00 marks the first time testing this level since February 25, 2020. For the moment, price action is seen retesting the rising trendline from below.If the trendline holds, then we expect to see a possible reversal off the $50.00 handle.A breakout above the trendline could see further gains likely. However, for the moment, oil prices could consolidate between the 50.00 and 47.00 price levels.Gold Price Retreats Off 1950 ResistanceThe precious metal once again failed to breakout above the key 1950 level of resistance.Following the failure, gold prices lost close to 2.30% intraday. The declines push gold prices back to the key support level near the 1900 – 1911 price area.As long as this support level holds, gold is likely to post a rebound.However, if price closes convincingly below the 1900 level then that could potentially put an end to the current rally.For the moment, the bias in gold prices remains mixed.
USD grinds higher despite poor payrolls report

USD grinds higher despite poor payrolls report

John Benjamin John Benjamin 11.01.2021 09:16
Euro Falls For A Second Consecutive SessionThe euro currency was down over 0.41% into Friday’s close, marking the second session of consecutive declines. The drop comes after the euro touched highs of 1.2284 on Wednesday last week.While it is too early to call for a correction, the current drop remains consistent with the overall view. The EURUSD has been in a strong uptrend with little to no major corrections.For the moment, the line in the sand comes in at the 1.2177 level of support. If the euro loses this handle, then we expect to see a move to the 1.2050 level of support next.While this could weaken the upside bias, there is still scope for a rebound. But a close below 1.2050 will no doubt accelerate the declines to 1.1900 next.GBPUSD Closes Flat As Consolidation ContinuesThe British pound sterling is seen trading flat as the consolidation near the top end of the rally continues.The cable has been in a strong volatile ride since late last year due to the Brexit trade talks. This has pushed the currency to test highs above 1.3650.However, following the gains, price has been trading rather flat. On the short term charts, we see the consistent lower highs forming.This could result in the descending triangle pattern likely to emerge. If the GBPUSD closes below the 1.3500 level of support, then we expect to see further declines lower.The cable will most likely move back within the sideways range of 1.3500 and 1.3150 levels.Crude Oil Rises To A Nine-Month HighOil prices continue to push higher with prices settling near 52.60 last Friday. It marks the highest levels since February.The gains also come with nine weekly consecutive gains so far. With price action cutting past the trendline from below, we expect to see a continuation higher.But if price action retraces the gains, then a correction back to the 49.00 level is quite possible. Establishing support at this level will continue to see the bullish bias intact.The next key level to the upside will come near the 55.00 level which marks a major support/resistance level back in late 2019/early 2020.Gold Prices Push Past 1850The precious metal continues to post strong declines. On Friday, the commodity lost over 3% into the close to settle at 1847.Prices are now trading near a three-week low. The weekly bearish price action candlestick is also likely to signal a continuation lower.The next key level of support comes near the 1817 level. If gold prices lose this handle, then we might get to see a stronger decline.The next main support level will be found near the 1671 level and would potentially mark a strong retracement after testing new all-time highs just a few months ago.
USD extends gains, rising to a three-week high

USD extends gains, rising to a three-week high

John Benjamin John Benjamin 12.01.2021 08:56
Euro Extends Declines For Third Consecutive SessionThe euro currency is posting declines for the third consecutive day. As a result, the common currency fell to a four-week low intraday before recuperating some of the losses.The broadly stronger greenback has pushed the EURUSD lower, which has been pending a correction for quite a while. For the moment, the euro is seen consolidating near the 1.2177 level.With the Stochastics oscillator currently oversold, there is scope for prices to post a rebound. The longer-term hidden bullish divergence could however see price making an attempt to push higher.As long as the previous highs of 1.2343 holds, we expect the overall trend to remain flat.GBPUSD Breaks Down Lower From Descending TriangleThe British pound sterling finally gave way as price broke down from the descending triangle pattern. This comes even as prices broke down past the key support/resistance level near 1.3500.However, following the initial decline to a two week low, the cable is recovering from the intraday lows. We could now expect prices to potentially retest the lower support area near 1.3542 – 1.3500.As long as this level stalls from price posting gains, we could expect to see further downside. The Stochastics oscillator is currently oversold and coincides with the rebound.However, if prices rise above the 1.3542 level, then it would invalidate the descending triangle pattern. We could expect to see the price either consolidating or renewing its bullish momentum.Oil Price Gains Pause After A 4-Day GainWTI crude oil prices are taking a breather following the strong winning stretch from last week. Price action is largely muted, even failing to post any new highs.As a result, oil prices are confined within last Friday’s range. Since the overall bias remains to the upside, there is scope for the commodity to continue to edge higher.However, on the short term charts, we see the trendline coming under a retest once again from below.If the trendline begins to act as resistance, then we could see some downside correction. The immediate lower support level near 49.00 comes into the picture.This should ideally support prices in the near term. But given that the Stochastics oscillator is likely to signal further upside, oil prices are likely to break the trendline to the upside.Gold Trades Flat Following Last Week’s DeclinesThe precious metal is on track to close flat on Monday. Price briefly slipped to test the 1817.80 level before pulling back.Overall, gold prices are currently confined to trade within the 1850 and 1817.80 levels. Only a strong breakout from this range will confirm the next direction.The bias remains to the downside for the moment, but that could change if gold prices manage to rise above the 1850 handle.This will then potentially set the stage for gold to test the 1911.50 level. The Stochastics oscillator remains near the oversold levels and somewhat mixed.
Sterling Snaps Back Higher On BoE Official Comments

Sterling Snaps Back Higher On BoE Official Comments

John Benjamin John Benjamin 13.01.2021 09:17
USD gains ease following a three-day winning streakEURUSD Consolidates Below 1.218The euro currency is catching a bid following the dollar weakness on Tuesday.The dollar’s gain came to a halt after three consecutive days of gains. This has pushed the euro to test the 21 December lows of 1.2133.Price action has been broadly flat after pulling back off the lows intraday. However, the euro will need to break out strongly above the 1.2180 level.Only a strong close above this level will see further gains coming up. To the downside, a continuation could see the 1.2050 level of support coming under the test of support next.The British pound sterling is posting strong gains on Tuesday. This comes following comments from a BoE official who was speaking out against negative rates.The gains saw the GBPUSD breaking past the 1.3500 level. This invalidates the descending triangle pattern. Prices continue to rise past the trend line as well.This has pushed the GBPUSD to test a two day high following the recent declines over the last week.Despite the short term gains, the bias still remains to the downside. But this could change if the GBPUSD can rise above the January 4 highs of 1.3700.WTI Crude Oil Inches HigherOil prices continue to post modest gains with price action managing to rise above the trend line. As a result, WTI crude oil prices are now close to the next round number level of 53.00.On the intraday charts, we see the bearish divergence on the Stochastics which is suggesting a lower high.Therefore, there is a risk of prices posting a correction in the near term unless oil prices can continue higher.To the downside, the recent swing lows near 51.53 remain the key level to watch.A break down below this level could potentially set the stage for a correction down to the 49.00 handle.Gold Prices Set To Close Flat Yet AgainThe precious metal is likely to close flat once again, marking a flat print for the second consecutive day.Although prices rose higher intraday, the gains quickly disappeared. There is a possibility of prices forming a bearish flag pattern currently.Therefore, if gold prices break down below the 1817.80 level of support, this view will be validated.The bearish flat pattern potentially signals a stronger correction to the downside. This could push prices down to the November 30th lows near 1770.00.
Sterling Rebounds As BoE Negative Rate Talk Fades

Sterling Rebounds As BoE Negative Rate Talk Fades

John Benjamin John Benjamin 15.01.2021 09:12
USD steadies on prospects of new stimulus talksEURUSD Rebounds From A 4-Week LowThe euro currency is posting a modest rebound intraday after falling to a four week low earlier on Thursday.The rebound comes as the recent dollar gains take a pause, awaiting more news on the new stimulus talks.Price action in the euro remains currently below the 1.2177 level. Therefore, a continuation to the upside could see this level coming in as resistance.Only a strong breakout above this level could rekindle the upside bias. The Stochastics oscillator is currently signaling a bullish divergence in this aspect.Therefore, the price action near 1.2177 will be critical. To the downside, a continuation below current lows could see the 1.2050 level coming into the picture next.The British pound sterling is posting strong gains, recovering from the declines on Wednesday. The rebound comes following speculation that the Bank of England will not be considering negative interest rates.This has proven to be bullish for the cable which has made a strong rebound. Price action will now be testing Wednesday’s highs of 1.3701.A breakout above this level could post further price gains in the currency pair.To the downside, support is firmly established near 1.3624 which could hold against any pullbacks for the moment. The Stochastics oscillator is also likely to turn higher, adding to the bullish bias.Oil Prices Consolidate Near Highs As Bullish Momentum Slows WTI crude oil prices are trading flat having risen to highs of 53.90 intraday on Wednesday.The declines push the price action back below the rising trend line. This could potentially see the trend line being retested from below.The Stochastics oscillator is nearing the oversold levels and therefore could see a possible move higher once again.However, oil prices will need to break out above the recent highs to continue higher. The next key target will be the 55.00 level.To the downside, if the trendline acts as resistance, then a close below 52.20 is required.Only a strong daily close below this level will open the way for a correction toward the 49.00 handle.Gold Prices Continue To Remain Muted The precious metal is trading subdued, in anticipation of further news on the stimulus proposal from the new Biden administration.Price action is strongly consolidating near the 1850 handle for the moment. This could continue for a while before leading to a strong breakout.The bias also remains mixed at the moment. To the upside, gold prices need to post a strong breakout above the 1850 handle, which will open the way to the 1911 – 1900 resistance level next.To the downside, the 1817.80 level of support once again comes into the picture.
USD rises to a three-week high despite weak retail sales

USD rises to a three-week high despite weak retail sales

John Benjamin John Benjamin 18.01.2021 08:46
Euro Inches Closer To 1.2050 The euro currency resumes the declines with prices now inching closer to the 1.2050 level of support.The declines come as the euro currency remains in a short term downtrend for the moment. This is evident from the lower highs that have been forming since prices retested the trendline from below on the 6th of January.The current declines to the 1.2050 could see a possible rebound taking place. This will most likely keep the EURUSD within a sideways range of 1.2177 and 1.2050.A break out from this range could possibly set the direction for the next leg.The stochastics oscillator is oversold and therefore coincides with the support level near 1.2050 likely to hold up in the short term.GBPUSD Double Top Pattern In Play The British pound Sterling has formed a double top pattern on the four-hour chart and prices broke down below this level on Friday.As a result, this bearish pattern could possibly see the cable likely to continue to push lower. The previous support level near 1.3506 will likely come in as the downside target.However, considering that the stochastics oscillator is also oversold but a possible rebound is likely to occur. This would see the GBPUSD pushing back to retest the 1.3611 level.Establishing resistance at this level could further validate the downside by his.However, if the cable manages to close above the 1.3611 level, then it would invalidate the double top pattern and as a result, we could possibly see either a consolidation or a possible move higher.Oil Prices Give Back Gains Crude oil prices were down close to 3% on Friday. This comes even as prices attempted to make a rebound earlier in the week on Thursday.However, this rebound led to a lower high emerging. Following this, prices gave back the gains on Friday and lost the support from the trend line as well.For the moment, the bias still remains to the upside. We need to wait for evidence to see a lower high forming in order to confirm the downside.For the moment, the lower target remains the support area near 49.00.In the short term, any rebound in prices could see the previous swing low near 52.30 playing a key role. If there is any rebound, then prices are likely to stall near this level.A strong close above 52.30 could potentially see another short term game in prices.Alternately, if we see a reversal near 52.30 or a continuation from the current levels, then we could expect the retracement towards 49.00.Gold Prices Hold Steady In A Sideways Range The precious metal was also trading weaker on Friday with prices down over 1%.However, price action remains subdued for the moment with the sideways range between 1850 and 1818 levels holding up for the moment.The lack of further bearish momentum is likely to see this possible consolidation resulting in either a strong retracement back to the upside. Alternatively, failure of support near 1818 could accelerate the decline.The stochastics oscillator currently remains well above the oversold levels thus indicating further room to the downside.However, the support level near 1818 is likely to hold up for the moment. As a result, gold prices are likely to continue trading in a sideways range for a while.To the upside, only a strong breakout above the 1850 level is likely to accelerate any gains that might come its way. The next key target will be the 1911.50 level of resistance.
GBPUSD Trades Flat Above The 1.3050 Technical Support

GBPUSD Trades Flat Above The 1.3050 Technical Support

John Benjamin John Benjamin 19.01.2021 09:12
USD rises to a one-month high as Yellen TestifiesEURUSD Reversing Just Off 1.2050 Technical Support The euro currency posted a steady decline as price action reversed just a few pips of the 1.2050 level of support. The declines come on the back of a strengthening US dollar.Speculation that the new Treasury Secretary, Janet Yellen will not be pursuing a weaker dollar policy has pushed the greenback higher. This has led to the euro posting a steady decline over the week.Despite the rebound just above the 1.2050 level, the bias remains to the upside. Any gains are likely to stall near the 1.2177 level at best. A reversal near this level will confirm a further continuation lower.On the other hand, we could expect the EURUSD to firmly test the current support near 1.2050.The British pound sterling extended declines but managed to post a reversal above the 1.3050 level of technical support. The rebound comes as prices fell through the 1.3611 level of support late last week.The declines open the way for the cable to retest the support level near the 1.3506 region. However, at the current reversal, we could expect the cable to retest the 1.3611 level once again.Establishing resistance at this level will likely confirm further downside. But this could change if the GBPUSD manages to close back above the 1.3611 level.To the downside, the declines could stall near the 1.3506 level of support keeping prices to move in a sideways range.Oil Prices Attempt A Modest Rebound WTI crude oil prices posted a rebound following the declines from last week. Prices got a boost early on Monday following stronger GDP numbers out of China.However, the current retracement remains somewhat subdued. Unless we see a breakout above the previous highs of 53.74, we could expect a continuation lower.This will mark a correction in crude oil prices which has been in a steady trend for a while.The immediate downside target for oil prices is the 49.00 area. Establishing support there could potentially mark a correction into the longer-term uptrend that oil prices are in currently.Gold Rebounds Off 1817 Support Level The precious metal touched down below 1817 intraday to a one-month low. However, prices quickly reversed losses to rise above this technical support.For the moment, prices remain above the 1817 level and could see some upside. But only a close above the 1850 level can confirm this.In such an event, gold prices are likely to extend gains further. This will open the way for the precious metal to test the next key resistance level near 1911.50.To the downside, only a strong close below the 1817 level will confirm further downside in prices.
GBPUSD Back Above 1.3611, The Double Top Low

GBPUSD Back Above 1.3611, The Double Top Low

John Benjamin John Benjamin 20.01.2021 08:35
USD turns weaker after rising to a one-month highEURUSD Retraces To the 1.2144 Price Level The euro currency is posting a strong retracement following the decline close to the 1.2050 level of technical support.The current rebound has pushed price action to test a minor support level near 1.2144. With the stochastics oscillator currently showing a hidden bearish divergence, price action will either have to break out above 1.2177 resistance or it is likely that we could see a continuation to the downside.This could mean that the technical support near 1.2050 will once again come under pressure. If prices break below this level, then the EURUSD could be looking towards posting their correction down to 1.1900 level.To the upside, price action will need to post or strong gain about 1.2177 in order to keep the upside bias intact.The British pound sterling continues its strong reversal price action as prices our trading currently above the 1.3611 level.This was the low from the double top pattern that had formed previously. If we see a strong close above 1.3611, then it would potentially keep the GBPUSD within a sideways range.This would mean that the cable will be trading back within the 1.3701 and 1.3611 levels.For the moment, however, the stochastics oscillator still remains somewhat weak as far as the bullish bias is concerned.As a result, a reversal near 1.3611 could potentially reiterate the downside buyers. This would then open the way for the cable to test the 1.3506 level of support.WTI Crude Oil Rebounds. But Can It Post Further Gains? WTI crude oil prices are posting a strong recovery with price action attempting to retest the previously formed highs.However, the reversal looks to be a bit fragile at the moment. As a result, if prices fail to break out above the trend line once again and above the previous highs near 53.80, then we could expect to see some downside correction taking place.For the moment, the oil prices remain somewhat mixed in their bias.Price action on the daily chart shows a bullish reversal following the Doji pattern which comes after the strong declines from Monday.However, from here on, oil prices will need to close above the previous highs in order to continue to post further gains.Gold Stays Muted Despite A Weaker USDThe precious metal is trading subdued, unmoved by the weaker US dollar. As a result, prices remain rangebound within the 1850 and 1818 levels for the moment.The stochastics oscillator also remains rather flat suggesting the sideways movement is likely to continue on for a bit further.Only a strong breakout within this range could result in a potential direction being established in the near term.The bias also remains mixed at this moment. On the daily chart, following the strong rejection below 1817.79, prices have managed to close bullish.However, the resistance level near 1850 will prove to be critical at this point.The stochastics on the daily chart timeframe remains near the oversold level, therefore giving support to the upside buyers if there is a breakout above 1850.
Dollar muted as Joe Biden sworn in as president

Dollar muted as Joe Biden sworn in as president

John Benjamin John Benjamin 21.01.2021 08:10
EURUSD Reverses Near 1.2144, Will It Push Lower? The euro currency is trading with some modest losses on Wednesday. The declines come after price action made a rebound just a few pips above the 1.2050 technical support.This rebound pushed prices to test their technical resistance level near 1.2144. Following this small rally, price action reversed gains.At the moment, prices remain stuck within the 1.2144 resistance and 1.2050 support. With the stochastics oscillator moving out from the overbought levels, we expect to see a retest back to the 1.2050 level, a bit more firmly.If the euro currency loses the support near 1.2050, then we expect a gradual decline towards the 1.1900 level next.To the upside, a close above the 1.2177 – 1.2144 level, will open the way to further gains.GBPUSD Briefly Rises Above 1.3700 But Fails To Hold The British pound sterling continued its bullish rally with prices briefly rising above the 1.3700 handle once again.However, the intraday gains were quickly scaled back as prices pulled back later in the day. As a result, the GBPUSD is currently trading within the sideways range of 1.3700 and 1.3611.The stochastics oscillator is currently overbought but is likely to head lower. This would mean that if the cable loses the support near 1.3611, then we expect to see price action falling back to the previous lows.This would open up the way towards 1.3506 level of technical support.In the medium-term outlook, we expect the GBPUSD to maintain a sideways range between 1.3700 and 1.3500.WTI Crude Oil Gains Lose Steam Near 53.77 WTI crude oil prices continue to hold a bullish front with price once again testing the 13th January and 15th January highs near 53.77.However, the strong pace of gains is showing signs of weakening. Price action has failed to make any significant highs beyond this level.The failure to close above 53.77 could potentially open the way for a move back lower. This would mean that the previous swing low formed near 51.85 is likely to be the short term support for the moment.If price action breaks down below this level of support, then we could expect to see further continuation lower.For the moment, given the bullish momentum in oil markets, we might see another attempt being made to the upside.In the event that crude oil prices close above 53.77, then it would open the way to further gains.Gold Prices Rise To An Eight-Day High The precious metal has managed to rise to an 8-day high following a close above the 1850 handle on an intraday basis.The Stochastics oscillator currently looks somewhat bullish with the possibility that the overbought conditions may persist.If price closes above 1850 on a daily basis, then we expect to see further gains. The next key technical resistance for gold is the 1911.50 level.In the near term, gold prices will need to establish support once again near the 1850 handle. Given that there has been a strong consolidation taking place near this technical support, there is a good chance that price action might continue to push higher.To the downside, a close below the 1850 handle will open up to the 1817.80 level of technical support.
New administration spurs risk on sentiment

New administration spurs risk on sentiment

John Benjamin John Benjamin 22.01.2021 09:17
EURUSD Gains On A Weaker Dollar And ECB Meeting The euro currency made a rebound, led by a weaker greenback and the ECB meeting on Thursday.The central bank did not make any changes which saw the euro rising as a result. However, the gains were capped near the familiar resistance area between 1.2177 and 1.2144 levels.This has led to another bearish signal from the intraday Stochastics oscillator. As a result, if the euro fails to close above 1.2177, then a drop is likely.This opens the way for the common currency to test the lower support at 1.2050. However, the daily price action looks somewhat bullish at this point. Therefore, only a close above 1.2177 will confirm further gains.This potentially puts the 1.2050 level into the picture at the moment.GBPUSD On Track To Settle Above 1.3700 The British pound sterling continues to keep a bullish hold. After failing to break out above 1.3700 level, prices managed to do so on Thursday.With intraday gains pushing the GBPUSD somewhat higher, we expect the 1.3700 level to hold for the moment.This will potentially open the way for the currency pair to post further gains. The next key target will of course be the 1.3950 level which was briefly tested as support back in April 2018.However, the gains will continue only on a strong continuation to the upside.At the current levels near 1.3700, price action is testing the support from 2018 March. Therefore, with this level now likely to act as resistance, we could see a decline.WTI Crude Oil Settles Into A Sideways Range Crude oil prices trade mixed as the developments on the ground unfold. With the new President Biden being quick to rejoin the Paris climate accord, speculators expect further changes on fossil fuel.President Biden was quick to announce new curbs on the US oil industry. The current sideways range in the oil markets reflect this sentiment. Speculators remain on the sidelines for now in order to ascertain more data.As a result, WTI crude oil prices are likely to maintain a sideways range within 53.77 and 51.87 levels for the near term. Only a strong breakout from this range will set the next direction.The intraday Stochastics oscillator is also currently turning flat. To the downside, a close below 51.87 will open the way toward the 49.03 level of support.While to the upside, a close above 53.77 could see oil prices building up the bullish momentum.Gold Prices Trade Flat As Investors Weight Stimulus Prospects The precious metal is giving back some of the gains made on Wednesday, after rising to a nine-day high on an intraday basis, prices are pulling back.This comes as investors wait on further announcements from the new Biden administration. Speculation is high that the new Democrats government, which also now holds a thin majority in Senate could announce new stimulus measures.For the moment, price action in gold remains flat in anticipation of the news. The current pullback could see gold prices retesting the 1850 level.If strong support is established here, then we expect further gains. The 1911.50 level of resistance becomes the next upside target.If the 1850 handle is lost, then gold prices are likely to head lower. The 1817.80 level comes in as support.
GBPUSD Remains Steady Within The Bullish Channel

GBPUSD Remains Steady Within The Bullish Channel

John Benjamin John Benjamin 25.01.2021 09:16
Dollar likely to push higher after FOMC and GDPEURUSD Closes With A DojiThe euro currency continued its attempts to break out from the resistance area near 1.2177 and 1.2144.However, price action closed somewhat flat, resulting in a Doji close on Friday. The Doji pattern in the resistance area could see a possible reversal.However, the sentiment remains mixed for the moment. A strong bullish close could see the euro currency rising above 1.2177.This will open the way forward for the EURUSD to retest the 6th January highs of 1.2349. Alternately, a bearish close following the Doji could signal a possible move back toward the 1.2050 level of support.There is also an ascending triangle pattern emerging near the resistance area. A successful upside breakout puts the near term target toward the 6th January highs, if not closer.The British pound sterling closed on Friday with losses, although price action remains firmly within the ascending price channel.The support level near 1.3500, clearly remains the major line in the sand. Further upside is likely to continue upon establishing firm support near this level on a daily and weekly basis.To the upside, a possible continuation may see the GBPUSD attempting to test the 16th April 2018 highs near 1.4376.Watch the minor rising trendline, which if breached could see the correction back to the 1.3500 handle.But the Stochastics oscillator is likely to signal another short term momentum to the upside.If the GBPUSD fails to break past the 21st January highs of 1.3745, then we might see a possible pullback.WTI Crude Oil Closes Flat On A Weekly BasisThe recent bull run in the oil markets is slowing down with the commodity posting a flat close for two consecutive weeks now.On Friday, oil prices were testing the lower end of the sideways range between 53.77 and 51.87. This comes after the second minor rising trendline was breached.While there was a small pullback into the weekly close, the overall bias remains mixed. This sideways range could continue especially if the current rebound off the floor could see prices attempting to rise back.But in the event that oil prices break down below the 51.87 level, then we expect a correction toward the 49 – 50 region in the short term.The confluence of the major rising trendline alongside the horizontal support could put a lid on the declines.Gold Prices Steady In A Sideways RangePrice action in gold remains stuck within a sideways range with the 1818 level of support holding up for the moment. The overall trend remains flat after gold price touched a new all-time high on 7th August 2020.This sideways shift could either see the trend beginning to change or a possible pause before the bullish run picking up pace.The overall bias remains mixed within this sideways range of the 1950 and 1818 levels.For the moment, price action has formed a lower high and is currently pushing lower. Therefore, a retest of the 1818 level is quite likely.A break down below this support area could see a possible shift in the trend.To the upside, unless the 1950 level gives way, prices might remain stuck in the range.
GBPUSD Testing The Medium-Term Trend Line

GBPUSD Testing The Medium-Term Trend Line

John Benjamin John Benjamin 26.01.2021 09:52
Dollar Index likely to push higherEURUSD Stuck Near Technical ResistanceThe euro currency is looking to break out from the technical resistance range of 1.2177 and 1.2144.However, price action remains weaker as it struggles to break out from this range. Meanwhile, the ascending triangle pattern continues to remain in play for the moment.In the event that prices break out above 1.2177, then we would see a rise toward 1.2300 at the very least.The stochastics oscillator currently is moving down from the overbought levels and therefore signals that price action could potentially push lower.However, this is subject to price is breaking the minor trend line that we see for the moment.Or breakdown below this trendline will see the euro currency once again attempting to slide towards the technical support near 1.2050.Price action in the British pound sterling is on track to close with muted gains on Monday. This comes as the GBPUSD attempted to push higher intraday above the 1.3700 level.However, prices pulled back lower to briefly test the medium-term trendline. From a daily chart perspective, a break of this trendline could possibly see prices once again sliding towards the 1.3500 level of support.The stochastics oscillator on the four-hour chart is currently pushing lower suggesting that the momentum might be heading to the downside.As a result, we expect the cable to continue trading somewhat mixed over the coming few sessions.The test of 1.3611 will be crucial as a breakdown below this level will no doubt open the way for the GBPUSD to test the 1.3500 level.Oil Prices Remain MixedWTI crude oil prices continue to maintain a mixed bias with prices giving back the intraday gains made.As a result, oil prices are once again trading near the lower end of the sideways range at 51.87.Given that this consolidation comes after the recent rise in prices, we could expect to see prices snapping lower.The recent rebound of this lower end of the range so the stochastics oscillator rising from the oversold levels.However, at the time of writing, the stochastics oscillator is once again likely to signal or move to the townsite.If oil prices lose the 51.87 technical support, then we expect a decline towards the 49.00 handle eventually. This will also see a confluence with the longer term trend line.Gold Prices Confined To Friday’s RangeThe precious metal is trading subdued with much of price action staying within the range from last Friday.As a result, price action is seen consolidating near the 1850 level of support multiple times. This consolidation could potentially give way for the markets to break out in the near term.To the downside, the 1817.79 level of technical support remains within scope. Given the multiple rejections near this level recently, we expect the support level to hold.Meanwhile, to the upside or close above the recent highs near 1873 to 1874 level could see prices eventually rising toward the 1911.50 technical resistance.
Dollar gives back gains after Fed meeting

Dollar gives back gains after Fed meeting

John Benjamin John Benjamin 29.01.2021 07:29
Euro Trades Mixed As Trend-Line Being Tested From BelowThe euro currency is attempting to pare losses from Wednesday. However, price action remains biased to the downside.The short term intraday bounce led the common currency to briefly rise to the 1.2144 level of resistance.A confluence of both the trendline and the horizontal resistance level is keeping prices capped below this level.We expect the EURUSD to probably consolidate within 1.2144 and 1.2050 levels for the near term.Given the fact that the support level near 1.2050 has not been tested yet, we expect prices eventually sliding to test this support level.GBPUSD Rebounds Amid A Mixed BiasThe British pound sterling is posting gains after a rebound from the trendline.Prices remain confined within the ascending wedge pattern. A breakout above the previous highs could confirm further upside.For the moment, price action is likely to range within the ascending wedge pattern.The trend line is currently being tested and a close above this level could signal further gains.However, if price retreats near the trend line, then this will open the risk to the downside.A break down from the ascending wedge pattern will open the way for the GBPUSD to test the 1.3500 level next.Oil Prices Drift Between 53.77 And 51.87WTI crude oil prices continue to maintain a sideways range within the said levels. Prices attempted to make some modest gains, but at the time of writing, oil prices are giving back those gains.The current slide could see the lower end of the range being tested once again. With the previous uptrend now coming to a halt, the current consolidation could see a breakout.The overall bias remains mixed, but a breakout below the 51.87 level could see a possible correction down to the 49.00 level of support.To the upside, above the 53.77 level, we could expect price to test the 55.00 level next.Gold Prices Manage To Recover LossesThe precious metal is seen recovering from the losses from Wednesday. After losing the 1850 handle, gold prices are back above this level once again.However, the pace of the rebound remains weak and we could see price losing the 1850 handle once again.In the medium term, gold prices are firmly above the 1817.79 level of support. As long as this support holds, we expect the precious metal to possibly rise toward the 1874 handle.But in the near term, we could see price action consolidating around the 1850 level for a while.
Risk off sentiment caps off a volatile week

Risk off sentiment caps off a volatile week

John Benjamin John Benjamin 01.02.2021 07:32
EURUSD Back Near 1.2144 Resistance AreaThe euro currency has now posted back-to-back gains for two consecutive sessions. As a result, price action is trading back near the technical resistance area of 1.2144.However, price action remained somewhat mixed as the buyer still remains to the upside. A strong reversal of the resistance area near 1.2144 could potentially confirm the downside.For the moment, we expect the EURUSD to consolidate between the 1.2144 and 1.2050 levels. Further gains can only be expected if the common currency can close strongly above the 1.2177 level.The stochastics oscillator continues to remain rather subdued and points to a possible drop towards the 1.2050 technical support.GBPUSD Consolidates Within The Ascending Wedge PatternThe British pound Sterling continues to trade rather mixed albeit near the recent highs. The consolidation has formed the ascending wedge pattern which could potentially signal a correction lower upon a bearish breakout.On Friday, the currency pair managed to pull back from the recent loss only to give back the gains towards the end of the week.The stochastics oscillator remains trading flat. This suggests the sideways price action in the GBPUSD currency pair.As long as no new highs are forming, the GBPUSD currency pair is likely to eventually post a correction towards the 1.3500 level.Crude Oil Closes Almost Flat For The Third Consecutive WeekConsolidation in the crude oil markets continues to stretch into the third week. Price action continues to trade nearly flat for three weekly sessions so far.As a result, price action is firmly entrenched within the sideways range between 53.77 and 51.87.The flat trading comes amid concerns of the vaccine rollout which could potentially delay the global economic recovery. Price action has been repeatedly testing the 51.87 level of support which has held up so far.However, a breakdown below this level could potentially see a short-term correction on the horizon.We continue to maintain that the downside target remains near the 49.00 handle for the moment.Gold Gives Back Gains After Testing 1874 ResistanceThe precious metal attempted to post modest gains on Friday as price action tested the 1874 level of resistance.However, prices gave back the gains rather quickly intraday to settle back near the 1850 handle. Failure to break out above the 1874 level of resistance could signal a possible move lower.However, price action remains flat within 1874 and 1818 levels for the moment. Given the current positioning of the stochastics oscillator, we might expect to see prices pulling over and possibly testing the 1818 level of support.But, on a weekly basis, we see price action trading within the range from the previous week. As a result, a breakout is likely to occur in the medium term.
USD rises to a two-week high

USD rises to a two-week high

John Benjamin John Benjamin 02.02.2021 08:39
Euro Resumes Slide, After A Two-Day GainThe euro currency is trading weaker on Monday following two daily sessions of gains previously. Price action remains confined below the 1.2144 level of resistance.Given the current pace of declines, the EURUSD currency pair is likely to test the 1.2050 level of support more firmly.We expect the support level near 1.2050 to hold up for the moment. As a result, the EURUSD could maintain a sideways range within 1.2144 and 1.2050 levels.The stochastics oscillator is currently moving closer to the oversold levels. Therefore, we could expect to see prices rebounding off the 1.2050 handle.In the unlikely event that the EURUSD loses the 1.2050 support, we could expect to see a larger correction down to 1.1900.GBPUSD Testing The Lower Trend-LineThe British pound sterling is also on track to post declines following a period of consolidation since last week.Price action is currently testing the lower trendline of the ascending wedge pattern. A continuation to the downside could potentially open the way for the GBPUSD to test the 1.3500 level of support.However, for this to materialize, the GBPUSD will need to post a convincing breakdown lower.Given that price action closed rather flat on a weekly basis, a bearish close this week could potentially strengthen the downside bias.This could mean that the cable could be looking to post further declines in the medium-term outlook.Crude Oil Bounces Off Lower End Of The RangeWTI crude oil prices are posting modest gains rising over 1% on Monday. This comes as prices briefly slipped below the lower end of the range near 51.87.Despite the current pace of gains, oil prices remain stuck within the range between 53.77 and 51.87. Only a strong breakout from this level will potentially confirm further direction in the commodity.For the moment, the continuation to the upside could see the 53.77 level being tested.On a weekly basis, we see that oil prices are trading flat for three consecutive weeks so far.The stochastics oscillator is currently moving out from the oversold levels and gives support to the upside bounce.Gold Prices Struggle To Breakout Above 1874The precious metal continues to trade flat amid the US dollar strengthening. While prices have managed to stay afloat above the 1850 level of support, the upper resistance level near 1874 is proving hard to break.As a result, gold prices remain caught within the 1874 and 1850 levels for the moment. The stochastics oscillator also signals the rather choppy movement within the said levels.Price action on the higher chart timeframes also continues to remain mixed. As a result, we could expect to see gold prices staying below the 1874 level for becoming few sessions.The bias still remains to the downside, however, a swing low is being formed near the 1835 level.A close below this level will potentially open the way for gold prices to retest the lower support near 1817.79.
Dollar Rises to a Two-Month High

Dollar Rises to a Two-Month High

John Benjamin John Benjamin 03.02.2021 08:06
EURUSD Touches Down To 1.2050 Level Of Support The euro currency finally fell to the support level of 1.2050, testing the level more firmly. While price action is trading below this level, we could expect to see some consolidating taking place.The Stochastics oscillator is also firmly in the oversold level, it supports the possibility of price action consolidation near this level.However, if the bearish momentum continues, then the euro currency is likely to extend declines further.The next main support level is near 1.1900. However, if resistance forms near the 1.2050 level, the declines can be confirmed.GBPUSD Breaks Down From Ascending Wedge The British pound sterling is extending declines after losing the support from the trendline of the ascending wedge pattern.With price action now clearing the ascending wedge pattern, further downside is likely.As the Stochastics oscillator is now near the oversold level, we could expect to see a rebound in the near term. This could see a short term retracement back to the breakout level once again.To the downside, price action is likely to find support near the Jan 26 swing lows of 1.3610. A break down below this level will confirm further declines to the 1.3500 level of support.WTI Crude Oil Rises To A One-Year High Crude oil price finally broke out from the range it has been in for nearly three weeks. The strong upside breakout pushed the commodity toward a new one-year high.A pullback is likely to occur in the near term toward the upper range near 53.77. Price action will need to break out strongly above the 55.00 level in order to maintain the upside.Given the current momentum, the downside looks a bit limited for the moment.However, this could change if oil prices lose the 53.77 support level. It would once again put price action back within the sideways range.Gold Prices Slip Below 1850 Technical Support The precious metal broke past the 1850 level of support on Tuesday.The declines come as price action was consolidating between the 1850 and 1874 levels. If the current pace of decline continues, then we expect to see a move to the 1817.80 level of support once again.The Stochastics oscillator is moving closer to the oversold levels. Therefore, the support area near 1874 is likely to find support once again.This will keep prices supported above this level for the near term.Given the current momentum, the precious metal is unlikely to breakout above the 1874 level of resistance.
USD strengthens on the back of strong economic data

USD strengthens on the back of strong economic data

John Benjamin John Benjamin 05.02.2021 07:29
EURUSD Falls To A Two-Month Low The euro currency continues its descent, now for the fourth consecutive session. The declines accelerated following two days of subdued price action earlier this week.The current pace of decline opens the downside target to the 1.1900 level of support. But in the near term, the common currency could reverse losses.A retest of the 1.2050 level to establish resistance will be ideal.This will also potentially confirm the downside as the Stochastics oscillator is very oversold under current market conditions.GBPUSD Rebounds On BoE Meeting The British pound sterling reversed losses in one single session, intraday. Price action posted strong gains following the BoE coming out slightly hawkish than expected on negative rates.As a result, the GBPUSD was back near the ascending wedge breakout level of 1.3678.While this coincides with the Stochastics oscillator recovering from just off the oversold conditions, prices are struggling to breakout higher.Therefore, if the GBPUSD fails to move above 1.3678 then we could expect prices to continue to drift lower.But with the recent swing low forming near 1.3585, we could expect this level to hold in the near term.Oil Rally Takes A Pause WTI Crude oil prices are trading weaker following the previous strong bullish sessions.Price action is reversing gains after testing the 56.00 level. The declines could, however, see near term gains once again.For the moment, the bullish bias remains in place. If the declines continue, then oil prices could be testing the 53.77 level of support in the near term.Establishing support here could potentially confirm the long term bias to the upside.For the moment, above 56.00, oil prices could be testing the 57.35 level of resistance next.Gold Prices Fall To A Two-Month Low The precious metal is down over two percent on an intraday basis.The declines accelerated after the precious metal lost the footing near 1817.89 support.The sharp declines could see the precious metal touching down to 1764.22 where the next key support level resides. This will put gold prices down to a three-month low.The formation of a lower low will no doubt change the bias in gold prices to the downside.However, we expect the declines to hold near the 1764.22 level in the medium term.
Stimulus bets rise as labor market continues to remain weak

Stimulus bets rise as labor market continues to remain weak

John Benjamin John Benjamin 08.02.2021 07:45
EURUSD Snaps A Four Day Losing Streak The euro currency posted gains on Friday, marking an end to four consecutive daily declines. The rebound comes after price reversed near a three-month low of 1.1951.As a result, prices pared losses to close on Friday near 1.2050. This level initially served as support.If price action forms resistance here, then we expect to see the EURUSD trading within the price band of 1.2050 and 1.1951.A breakout from this range will further set the direction.To the downside, the next support level is at 1.1900. To the upside, a strong close above 1.2050 could open the way for price to test the 1.2144 level next.GBPUSD Price Action Invalidates Ascending Wedge Pattern The British pound sterling continues to hold a strong bullish momentum. The strong reversal after price fell to a two-week low has now invalidated the ascending wedge pattern.This keeps price action biased to the upside. After Friday’s close, the GBPUSD is trading back close to the three and half year high.The currency pair has also now closed with bullish gains for four consecutive weeks.Still, the momentum is slowing and unless the GBPUSD closes strongly above 1.3755, we expect price action to remain flat near the current highs.Oil Prices Settle Near A 13-Month High WTI Crude oil prices continued to advance with price action closing near a 13-month high. Prices briefly traded close to the next key resistance level of 57.35.We could expect a push higher for the commodity to test this level firmly. Further gains can be expected only on a strong breakout above this level.This means that a reversal near 57.35 will potentially see a possible retracement coming.The previously held resistance level near 53.77 remains the initial downside target for the moment.The price level near 40.55 however marks the 61.8 Fibonacci retracement level for the decline from 65.62 in January 2020 through the zero level on 20th April.Therefore, the correction, if applicable could see a stronger pullback.Gold Prices Pull Back From A Three-Month Low The precious metal managed to recover some of the losses on Friday. Price action closed with over one percent gains on the day, after falling to a three-month low previously.The retracement puts gold prices close to the 1817.80 level where resistance could form.Unless we see a strong close above 1817.80, gold prices could hold a sideways range between 1817.80 and the recent lows near 1784.81.Despite the current pullback, gold price closed on a bearish note for the week. Therefore, a continuation to the downside cannot be ruled out.
USD extends decline for three-days

USD extends decline for three-days

John Benjamin John Benjamin 10.02.2021 08:59
EURUSD Gains But Watch The Hidden Bearish Divergence The euro currency snapped strongly above the 1.2050 level, but price action formed a lower high.The hidden bearish divergence on the chart could, however, see prices pushing lower.To the downside, the euro currency is forecast to push down lower to the 1.2050 level of support.If price breaks down below this level, then we expect further downside.The previous low near 1.1953 will however need to crash lower to continue the downtrend.But the support level near 1.2050 level will act as the line in the sand.GBPUSD Rises To A New Three-And-Half Year High The British pound sterling continues to push higher with price action rising to a new three and a half year high. The gains come as the GBPUSD moves closer to the 1.3777 level.Given that this level has served as support in the past, we could expect GBPUSD to form resistance at this level.If price reverses near this level, then we might expect price action to slip back to the 1.3500 level of support. But in the near term, GBPUSD will need to break down below the 1.3758 level of support to confirm the downside.In the event that the currency pair rises above 1.3777 level, then we expect a further upside that could see the next level near 1.4368.WTI Crude Oil Breaks From A 6-Day Winning Streak WTI crude oil prices are pushing lower following a six-day winning streak. Price action rose to a 13-month high prior to the pullback.But for the moment, the declines are likely supported near the 57.35 level of support. If price action loses this support, then we expect to see further declines.The next main support level near 53.77 will be the level to watch. For the moment, watch how the daily price action will unfold near the current highs.We would need to see a bearish follow through to the downside to confirm the correction.In the event that the support level near 57.35 holds, we could expect to see further gains.Price action will need to break out above the current highs of 58.59 in order to confirm further continuation to the upside.Gold Prices Rise For Three-Consecutive Days The precious metal is posting strong gains, rising for three consecutive days. Despite the gains, prices are below the 1850 level of resistance.In the near term, we might expect prices to move sideways within the 1850 and 1817.80 level. If price breaks out above 1850 level, we could expect to see further gains.The next key level will be near the 1874.00 resistance level. To the downside, the support level near 1817.80 will likely keep prices supported from any further declines.Meanwhile, we continue to see the hidden bearish divergence forming on the 4-hour chart.Therefore, it is quite likely that the 1817.80 level could be tested in the near term.
Soft inflation data keeps USD pressured

Soft inflation data keeps USD pressured

John Benjamin John Benjamin 11.02.2021 08:41
EURUSD Rises To A Two-Week High The euro currency continues to push higher, rising for the third consecutive day, to a two-week high.The gains, however, are slowing as price moves closer to the 1.2144 – 1.2177 level of resistance. We also continue to see the hidden bearish divergence on the chart, which could suggest a pullback.To the downside, price is likely to stall near the 1.2050 level of support for the moment. However, a close below this level could see the Feb 5 lows of 1.1952 come into the picture.If the current bullish moment continues, then the euro currency will need to break out above 1.2177 to confirm further upside.GBPUSD Pushes Higher But Gives Back Gains The British pound sterling continues to rise higher, marking a new high of 1.3866 intraday. But price action is pulling back after testing this level.The Stochastics oscillator is firmly in the overbought levels supporting the upside bias. For the moment, the downside remains limited until we see a lower high forming.Given the current pace of gains, the GBPUSD is seen testing the support area of 1.3790.A strong close on a weekly basis above this level is needed to confirm further upside.For the moment, the untested support level near 1.3759 will be the likely downside target in case of a correction.Oil Price Grinds Higher To A New 13-Month High WTI crude oil prices continue to maintain a strong bullish moment.Price action rose to fresh highs of 58.73. This makes price action likely to test the unfilled gap from January 20 last year at 59.47However, with price now trading below the trend line, this could act as a potential resistance for price action.To the downside, the support level at 57.35 is already tested albeit only slightly.Therefore, any declines could see this level coming under a firm re-test. Only a strong close below 57.35 will confirm a move down to the 53.77 level of support.Gold Prices Rejected Near 1850 The precious metal is struggling to breakout above 1850 as price action was firmly rejected near this level intraday.Overall, gold prices remain trading subdued compared to the gains made in the previous sessions.We expect the precious metal to maintain a sideways range between the 1850 resistance and 1817.80 level of support in the near term.The Stochastics oscillator is also starting to move a bit down from the overbought levels currently. This will likely mark an end to a three-day winning streak in gold.
Dollar steadies after a four-day decline

Dollar steadies after a four-day decline

John Benjamin John Benjamin 12.02.2021 08:39
EURUSD Reverses Near 1.2144 Resistance Level The euro currency is giving back the gains made from Wednesday as price action failed to rise above the technical resistance level near 1.2144.As a result, price action is quite bearish, amid the hidden bearish divergence as well. However, given the fact that price action has broken out from the falling price channel, this decline could merely be a retracement to the breakout level.We could see EURUSD retest the breakout level near 1.2080 to the downside. Below this level, the lower support area near 1.2050 is also likely to hold the declines.In the near term, we could expect the EURUSD to move in a sideways range between 1.2144 and 1.2080 levels.GBPUSD On Track To Retest 1.3590 The GBPUSD currency pair is giving back the gains made from the previous day with prices turning lower.On the intraday charts, we see prices trading currently below the 1.3821 swing low. A confirmed daily close below this level could potentially see price action testing the previous untested support level near 1.3790.As long as this support level holds, we could expect to see further upside. But for price action to continue higher, we would need to see the GBPUSD rising past the current highs above 1.3850.However, if the GBPUSD loses the 1.3759 level of support, then we could expect further declines in the near term.This would also potentially open the way for the currency pair to slide towards the 1.3500 level of support.WTI Crude Oil Rally Takes A Pause The recent pace of strong gains in the WTI crude oil market is seen to be slowing with prices likely to close flat for a second consecutive day. This could potentially see the onset of a short term correction in the markets.The initial support level near 57.35 is likely to be tested in the short term. As long as this support level holds, we could expect crude oil prices to maintain the upside bias.However, in the event that oil prices lose the 57.35 support, then we might expect to see a steeper correction. Below this level, the next main support comes in near 53.77.Given the recent bullish momentum in the oil markets, there is also strong evidence of a bearish divergence building up.Therefore, this could see a short-term correction which can only be confirmed upon a daily close below the 57.35 support level.Gold Prices Slip To A Three-Day Low The precious metal is down nearly 1% intraday as the short term bearish momentum is strong. Price action is likely to retest the support area near 1817.80.The stochastics oscillator on the intraday charts are also signaling further room to the downside. However, the declines might stabilize after testing the 1817.80 level.In the event that gold prices breakdown below this level, then we might expect to see further declines.The initial price level to watch will be the 1785.25 level which marks the lows from the 4th of February.A close below the swing low could potentially open the way for gold prices to test 1764.22 next.
Gold & the USDX: Correlations

GBPUSD Rebounds, Brushing Aside Weak GDP Numbers

John Benjamin John Benjamin 15.02.2021 07:23
Slow start to the week with China and US markets closedEURUSD Recovers From A Three-Day Low The euro currency touched a three-day low on Friday at 1.2080 before recovering. Price action is subdued for the past three sessions with a lower high currently forming.This comes after price slipped to a three-month low at 1.1951 on February 5th. The downside bias is starting to build up.The common currency will need to rise above the recent swing high of 1.2187 in order for the upside bias to hold.Failure to do so could potentially open the way for further declines, especially if the swing low of 1.1951 gives way.For the moment, the support area near 1.2050 will be critical to the downside. The Stochastics oscillator is moving up and could signal another test to the resistance area near 1.2144 – 1.2177.The British pound sterling made a sharp recovery with price action on Friday posting a strong rebound.The gains put the GBPUSD back near the previous highs at 1.3866. But with the Stochastics oscillator signaling a lower high, we could see a pullback.The support level near 1.3759 remains in scope to the downside. As long as the cable holds gains above this level, there is room for further gains.But a close below this level could potentially see a larger correction taking place.For the moment, the uptrend remains intact with price making consistently higher lows.Oil Advances To A New Eleven-Month High WTI Crude oil prices resumed the bullish momentum following three days of subdued trading. Prices settled at 59.55 on Friday, marking a new 11-month high.The rebound comes after oil prices briefly fell to the support area near 57.35. This potentially cements the 57.35 level as a strong support area in case of any downside.Despite the gains, oil prices are now nearing a multi-year resistance area between the 65.5 and 61.5 levels.Price action has on previous occasions failed to break past this level.Therefore, unless there is a strong momentum led breakout, we could see price action consolidating in this resistance area.Gold Prices Find Support Near 1817.89 The declines in the precious metal stalled after prices once again tested the 1817.89 level of support. A retest of this level, alongside the Stochastics oscillator attempting to move out from the oversold levels, could keep prices to the upside for the moment.This will mean that gold prices will continue to maintain a sideways range between 1850 and 1817.89 levels in the near term.On the daily charts, gold prices closed flat following the losses from the previous day.Therefore, if price action turns bearish today, we could expect to see the previous lows at 1784.81 from 4th February coming under test once again.To the upside, price action needs to post a strong close above the 10th of February highs of 1855.30 for any signs of further gains.
USD Trades Weaker Amid Bank Holiday

USD Trades Weaker Amid Bank Holiday

John Benjamin John Benjamin 16.02.2021 08:31
EURUSD Subdued Amid Thin TradingThe euro was trading subdued, with price action once again attempting to retest the resistance level near 1.2144.Price action in the EURUSD is somewhat flat with the US markets closed on account of the president’s day holiday today.The short term trend appears to be flat for the moment unless the common currency is able to break out above the resistance area between 1.2144 and 1.2177.Meanwhile, the stochastics oscillator is posting a lower high. This could suggest a short-term correction to the downside.The support level near 1.2050 is likely to remain the downside target for the moment.GBPUSD Surges Past 1.3900The British pound Sterling continues to surge ahead with price action rising above 1.3900.So far, GBPUSD has been posting gains for nearly five consecutive weeks.A continuation to the upside could see price action rising towards the 1.4400 level. This would mark the highest level since mid-2016.But the current pace of gains has seen no meaningful pullback just as yet. Therefore, the lack of any support to the downside is likely to open the downside risk.The recent swing high near 1.3867 is likely to act as support. But if the GBPUSD loses this handle, we expect a correction down to 1.3759 next.Oil Prices Rally On Cold WeatherOil prices opened on a bullish note in the Asian trading session rising to a new 13 month high.The gains came as the cold winter has fueled demand for the fossil fuel.Price rallied to a new high of 60.75 before giving back some of the intraday gains. However, towards the late European trading session, oil prices were seen giving back some of these gains.If oil prices continue to pull back, then we might get to see prices covering the gap from Monday’s open. To the upside, the next main resistance level is near 61.35.The current rally in the oil prices also comes as the US dollar has been trading weaker over the past few weeks.Gold Price Confined To Friday’s RangeThe precious metal is trading subdued with price action firmly stuck within Friday’s range.With both the Asian and US markets closed, trading in the precious metal is slow. Price action is back near the support level of 1817 region.For the moment, the support level seems to be holding up which could provide a short-term boost to the upside. The resistance level near 1850.00 will likely once again act as resistance keeping a lid on any further gains.However, watch the stochastics oscillator which is likely to signal a shift in the momentum.In the event that gold prices lose the 1817 support, we could expect price action toward the 4th February lows at 1784.79.
Gold & the USDX: Correlations

USD trades mixed on comments from Fed officials

John Benjamin John Benjamin 17.02.2021 07:49
Euro Gives Back Intraday GainsThe euro currency rose to a four-week high after GDP numbers came out better than forecast.But price action soon gave back the gains as the resistance level proved too hard to breach.Price action briefly rose past 1.2144 before retreating from the resistance level between 1.2177 and 1.2144. For the moment, the EURUSD remains well above the 12th February lows.However, a close below this level could see further short term declines. The main support level at 1.2050 remains the downside target for the moment.GBPUSD Slips But Upside Remains IntactThe British pound sterling continues to post steady gains. Price action was seen trading a bit weaker after testing highs of 1.3951 on Tuesday.But a quick recovery from the intraday lows is keeping the upside bias intact.Further gains could likely see the cable testing the 1.4000 round number level in the near term.To the downside, the current intraday lows near 1.3869 and the highs from 10th February at 1.3866 form the initial support.Only a strong close below this level will open the downside toward the 12th Feb lows at 1.3775.Crude Oil Retreats From 60.92WTI crude oil prices are giving back the gains after prices touched a new 13-month high earlier this week.The declines come after prices fell to fill the gap from last Friday at 59.55. With most of the intraday declines already pulling back, the upside could resume.The fundamentals remain bullish for oil markets especially with the cold winter in the US. This could see oil prices likely to test the 61.00 level next to the upside.Any corrections could likely stall near the 57.35 level for the moment. Establishing support here could also further strengthen the potential for more gains.Gold Slips Below 1817 Technical SupportThe precious metal lost the 1817.79 technical support on Tuesday.However, after prices fell to intraday lows of 1789.37, there was a quick recovery.The current pullback could see gold prices retesting the 1817.79 level once again. The bias remains mixed as we could see some consolidation taking place near this level.Only a strong close below 4th Feb lows of 1784 will see further downside.The next key target for gold is near the 1764.22 level of support. To the upside, gains could be limited to the 1850 handle once again.
GBPUSD Signalling A Bearish Correction

GBPUSD Signalling A Bearish Correction

John Benjamin John Benjamin 18.02.2021 07:28
Dollar gains afer retail sales surprises to the upsideEuro Weakens To A Seven-Day LowThe euro currency is accelerating the pace of declines comparing to the previous few days. On an intraday basis, the euro slipped to a seven session low before recovering slightly.The declines come as the EURUSD has now breached the rising long term trendline once again.Still, given the recent rebound after the trendline breach on 5th February, we could see a recovery once again.Therefore, to the downside, only a confirmed close below 5th February lows of 1.1951 will see further declines coming.Meanwhile, to the upside, a reversal could see the trendline coming in as resistance or the euro could possibly breakout above the trendline once again.The long term correction could see the 200-day moving average being tested which currently sites around the 1.1800 region.The British pound sterling is extending declines following a flat close on Tuesday. Still, price needs to close below Tuesday’s low of 1.3901 to confirm further downside.The next immediate downside target is seen near 1.3733 where price established strong resistance previously. This price level forms the ideal target to the downside with support likely to come in.But in the event that the GBPUSD loses this handle, we might get to see further declines. This will push the cable down to the 1.3500 level which is pending a retest anyways.To the upside, price action will need to post a reversal and possibly rise above the Tuesday highs of 1.3950 in order to maintain the uptrend.WTI Crude Oil Inches Higher But Likely To Close FlatWTI crude oil is showing signs of losing its bullish momentum. Price action is seen struggling to get a foothold above 60.00.This has led to price action being rejected over the past three trading sessions. For the moment, the overall bias remains firmly to the upside.But this could change if oil prices close below Tuesday’s low of 59.31. This will potentially confirm the downside for the short term. The long term trendline will act as support in case of such a move.To the upside, oil prices are nearing the 61.35 level which marks the highs from 8th January. Given the current momentum it is unlikely to see oil prices rising further unless there is a strong breakout above 61.35.Gold Prices Fall To A Two-Month LowThe precious metal resumes its declines with price action currently trading near the 1777.50 level.The decline marks a new two-month low in the commodity. A break down below this level could further accelerate declines.Still, considering that this support level has held up previously around early December last year, the precious metal could post a rebound.The daily Stochastics oscillator is also nearing the oversold levels. This could coincide with the support level holding up.However, if the precious metal loses this support, we could see prices potentially falling to the next key support level near 1650.
USD falls for the third consecutive day

USD falls for the third consecutive day

John Benjamin John Benjamin 23.02.2021 07:15
EURUSD On Track For A Three-Day GainThe euro currency is on track for a three-day back to back gain. Price action is recovering sharply following the declines during the middle of last week.For the moment, price action will be challenging last week’s highs of 1.2168. A convincing breakout above the resistance area of 1.2177 will put the bullish bias back on the table.Currently, the 4-hour chart is also shaping up to show an inverse head and shoulders pattern. Therefore, a successful breakout above 1.2177 will push the euro currency toward 1.231 level at the very least.This will mark a lower high comparing to the highs from January this year.GBPUSD Maintains Its Impressive RallyThe British pound sterling maintains a strong hold on the bullish momentum with six consecutive weekly gains so far.Price action is nearing the April 2008 highs of 1.4376. The strong uptrend could be further cemented if the cable breaks out sharply from the rising price channel.The immediate support to the downside is near the 1.3951 level at the moment. However, with the current pace of gains, we expect prices to continue rising above the 1.4000 level.On the daily chart as well, price action remains biased to the upside following the strong bullish reversal pattern on Thursday last week.Crude Oil Attempts To Pare LossesWTI crude oil prices are looking bullish with price action posting a strong recovery after the declines from Thursday and Friday last week.For the moment, price is yet to breakout above last Thursday’s highs of 62.22. But this is essential for the commodity to maintain its bullish position.Following the reversal in the direction on Monday, we expect the minor support near 58.85 to hold prices from declining further.To the upside, oil prices will be battling the confluence of the horizontal resistance level and the trendline around the 60.87 region.If price fails to close out above this level, we could see a correction down to the 57.35 level eventually.Gold Prices Rise To A Four-Day HighThe precious metal is posting strong gains on Monday, capitalizing on a weaker greenback. As a result, price action is up over 1.5% intraday and is trading near a four-day high.Despite the current gains, XAUUSD will need to breakout above the 1817.79 level of resistance. A breakout above this level will also push price action out from the falling price channel.This could potentially signal the end of the correction in gold prices as the upside resumes.However, ahead of further gains, a high low within the 1817.79 – 1764.22 levels could give it more upside bias. This will potentially confirm the end of the current declines.Above 1817.79, gold prices will challenge the 1850 levels next.
GBPUSD Steadies On Lockdown Lifting Optimism

GBPUSD Steadies On Lockdown Lifting Optimism

John Benjamin John Benjamin 24.02.2021 07:26
USD turns volatile as Powell testifies to CongressEURUSD Perched In Resistance Area The euro currency is strongly consolidating within the resistance levels of 1.2177 and 1.2144.Price action managed to rise to the upper level of the range before giving back the gains. The volatility in the tight range comes as the Federal Reserve Chairman Jerome Powell testifies to Congress.A breakout above 1.2177 could open the way for the common currency towards wider gains. This will potentially see price action rising to test the highs from January this year.Alternately, if prices fail near the resistance level then we expect a move back lower.To the downside, support at 1.2050 should hold the declines for the moment.The British pound sterling, which has already seen a strong bull run got another boost on Tuesday.The UK Government prepared a roadmap towards re-opening its economy. This puts further upside pressure on the currency pair which is already enjoying a strong rally.Price action is trading outside the rising price channel currently. With the Stochastics oscillator firmly in the overbought levels, the upside momentum could fail.Any downside corrections could stall near the 1.3951 level of support for the moment.Given that the currency pair has been pushing higher on a steady note, we could expect a brief pullback in the near term.WTI Crude Oil Pulls Back From A New 13-Month High Oil prices surged higher intraday on Tuesday. Prices tested a new 13-month high of 62.96 in the early Asian trading session.However, since then, oil prices gradually drifted back lower. The test of support near 60.87 confirms that prices are well supported at this level.However, for the short term, oil prices will need to breakout higher and continue further to maintain the bullish trend.The Stochastics oscillator on the four-hour chart is also likely to signal another push to the upside.For the moment, the line in the sand is the 60.87 technical support. If oil prices lose this support, then we expect a deeper correction down to 57.35 or toward the 19 Feb lows of 58.56.Gold Gains Slow As Price Approaches 1817.79 The precious metal pulled back just a few points away from the 1817.79 level of technical resistance.The Stochastics oscillator which is currently signaling a hidden bearish divergence could see a continuation in price to the downside.This is unless, of course, the precious metal manages to breakout above the 1817.79 price level. Such a move will potentially open the way toward the 1850 handle.Meanwhile, if prices drift lower then we could expect a move closer to the 1764 level of support. However, it is unlikely that this level of support will be tested once again.
GBPUSD Gets Rejected After Testing A Three-And-A-Half-Year High

GBPUSD Gets Rejected After Testing A Three-And-A-Half-Year High

John Benjamin John Benjamin 25.02.2021 08:26
USD fights back from a five-week lowEuro Trades Subdued But Supported By The Trend-Line The euro currency is trading rather mixed, a day after prices almost closed flat on Tuesday.Overall, the long-term trendline on the daily chart is supportive of prices. Therefore, we could see price action attempt to push higher.The 50-day moving average is also close and could come in as dynamic support. For the near term though, the EURUSD currency pair will need to close convincingly above the resistance area of 1.2177 and 1.2144.This resistance area is proving hard to break out in the near term. Therefore, there is a very good chance that the EURUSD might remain in a sideways range for now.To the downside, the 1.2050 level will hold the currency pair from posting further declines.The British pound sterling rose to a fresh three-year high at 1.4140. But prices were rejected intraday with the currency pair likely to close bearish or flat.Given that this pattern comes near the top end of the rally, it could potentially signal the start of a correction in the GBPUSD.The cable has not made any decent pullbacks so far. Therefore, a close below Tuesday’s low of 1.4055 could spell trouble.For the moment, prices might test the support area near 1.3950. This would mark a short-term correction in price action.The Stochastics has also moved out from the overbought levels but could signal a reversal once again.Crude Oil Rises Over 3%, Inching Closer To A Two-Year High Oil prices managed to shrug off the uncertainty of the past few days with price action once again surging.On an intraday basis, spot crude oil prices rose over 3% in what is likely to be a strong recovery. The gains come after oil prices closed bearish last week.However, at the time of writing, crude oil has managed to pare last week losses to rise higher.On the intraday charts, oil prices are yet to close fully above the previous highs of 62.97. But given the bullish momentum, we could expect to see further gains.The only downside scenario here is to see oil prices pulling back. This would mark a failure near the short-term trendline and could open the way to the downside.The support near 60.87 remains critical under such circumstances.Gold Prices Likely To Close Bearish For A Second Day The precious metal is failing to capitalize on the support level it established near the 1764 handle. Prices are falling for the second day, albeit the pace of declines is limited in comparison.To the upside, the reversal comes just a few points below the 1817.80 level. Given that this level was already established as resistance, we expect prices to hold between the two levels for the moment.On the weekly chart, we have the double bottom pattern that has formed around the 1764 handle.Therefore, a breakout above 1817.80 is needed to keep the bullish bias alive.A close above 1817.80 will open the way for gold prices to challenge the 1850 handle next.
GBPUSD Holds Steady Above 1.41

GBPUSD Holds Steady Above 1.41

John Benjamin John Benjamin 26.02.2021 09:21
USD gives back gains as risk currencies riseEuro Rises To A Three-Month High The euro currency finally broke past the resistance area of 1.2177 – 1.2144. The breakout pushed the common currency to a three-month high on an intraday basis.The gains come as the US dollar failed to maintain its reversal on Wednesday.If the current momentum continues then we might get to see the Euro once again attempting to test the 6 January highs of 1.2349.However, ahead of these gains, a pullback to establish support near 1.2177 would be ideal.For the moment, the EURUSD is still not out of the woods unless we see a higher low forming above the resistance area.The British pound sterling is giving back the gains from Wednesday. The declines come as the cable rose to a new three and half year high earlier this week.The current declines come as investors head into the weekend with the drop likely coming as a result of profit-taking.The GBP currency has enjoyed a strong rally and got an additional boost as the UK is already preparing plans for re-opening its economy.For the moment the pullback is likely to be met with skepticism. A continuation below Wednesday’s low of 1.4080 could, however, see the currency pair making a short-term correction.The downside could be supported near the round number 1.4000 level.Crude Oil Holds Steady At A 13-Month High Oil prices are steady after rising to a new 13-month high. The gains come as the latest report shows a drop in US Crude oil output.The weaker dollar is also helping the commodity to maintain its hold. For the moment, prices are supported near the trendline.Still, even a close below the trendline could keep the upside bias intact.The support area near 60.87 will hold the prices from posting further declines.But a close below 60.87 could potentially open the way for oil prices to fall further. This could see the 57.35 level coming under scrutiny next.Gold Prices Slip As Treasury Yields Rise The precious metal continues to trade weak with price action extending declines for a third consecutive day.The declines come as Treasury yields are rising higher. Investors are betting that the global economy will re-open quicker than anticipated with appetite for further stimulus falling.Gold prices have been trading within the 1817 and 1764 levels since the middle of February.We expect this sideways range to continue.To the downside, gold prices will likely retest the previously formed support at 1764.22.
Intraday Market Analysis: US Dollar In Bullish Continuation

Intraday Market Analysis: US Dollar In Bullish Continuation

John Benjamin John Benjamin 09.03.2021 11:17
EURUSD tumbles in falling channelThe US dollar continues to push forward as prospects of a strong US recovery take root.After conceding the intermediate support of 1.1950, the euro came under renewed pressure and is now sliding towards the daily support level of 1.1750.A bullish RSI divergence and the price testing the lower band of the bearish channel suggest that a rebound is overdue. A better-than-expected GDP data from the eurozone might just give the single currency the relief it needs. Though the upper band (1.1970) will be a tough nut to crack.AUDUSD remains under bearish trendlineThe Aussie might not be out of the woods yet as market fever over the greenback is still in full swing. The pair is heading towards the daily support level of 0.7580, a critical level where a failure to bounce could signal an upcoming reversal.A fairly neutral RSI says there is still room for a retracement in the next few hours.The price action is then likely to go sideways between the support and the bearish trendline (0.7720) before a breakout would lead to a new direction.SPX 500 rallies back from daily supportThe S&P 500 climbed back after the US Senate passed the $1.9 trillion COVID-19 relief package. The demand zone around 3700 from the daily timeframe has seen strong bids.On the hourly chart, a bullish MA cross and a rally above 3845 have prompted the short side to cover. 3900 is the immediate resistance and its breach could resume the upward movement.An overbought RSI might signal a potential pullback but as long as the index stays above 3730, the bias remains bullish.
Gold & the USDX: Correlations

Intraday Market Analysis – Awaiting A Breakout

John Benjamin John Benjamin 23.03.2021 07:47
EURUSD consolidates near the support area The US dollar stayed subdued as Treasury yields retreated on Monday, relieving pressure on its European counterpart. The pair has fallen back from the double top at 1.1990 after it went into an overbought situation. The euro is looking for support while hovering above the major demand area around 1.1830. The current consolidation is an opportunity to build up momentum. The resistance at 1.1990 is a tough nut to crack but a bullish breakout could send the price towards 1.2050. GER 30 retreats after being overbought Equity markets are treading water at the start of the week as investors remain cautious about the inflation outlook. The DAX 30 has pulled back from the all-time high at 14810 after the RSI continuously ventured into the overbought area. Instead of chasing the momentum buyers may likely wait for a discount before jumping on the trend. The previous low at 14400 coincides with the rising trendline and could be a key zone of congestion where trend-followers would bid up the index. USOIL recovers from daily support The oil price has recouped some losses from concerns about vaccine rollouts and new lockdowns in parts of Europe. The RSI has recovered into the neutral zone as the price found support in the demand area around 58.50 on the daily chart. WTI is now at a crossroad as a deeper retracement could trigger a reversal. Otherwise, what is happening could be a mere three-wave correction. As for now, the 38.2% Fibonacci level (62.00) is the next resistance. The uptrend may only resume if buyers can push through 64.80 once again.
Intraday Market Analysis – Moving Resistance

Intraday Market Analysis – Moving Resistance

John Benjamin John Benjamin 31.03.2021 07:54
EURUSD capped by bearish moving averages The US dollar continues to advance across the board supported by improving economic outlook. After a short pause along the 20 and 30-hour moving averages, the sell-off renewed below 1.1760. A further drop below the psychological level of 1.1700 could drive the price towards 1.1600, a critical support level for the ten-month-long rally on the daily chart. As the RSI falls into the oversold area, a limited rebound could be met with selling pressure between the moving averages and 1.1775. NZDUSD weighed by bearish MA cross The New Zealand dollar is still struggling near its five-week lows as the appetite for growth-sensitive currencies fades. The kiwi has had a timid rally after the RSI went sharply into an oversold situation. It was probably due to profit-taking rather than fresh dip-buying. Buyers’ failure to hold onto 0.7000 suggests a lack of commitment after the daily chart showed a bearish MA cross. 0.6940 is the immediate support and a bearish breakout could trigger a new wave of sell-off towards 0.6900. XAGUSD sees limited bounce Silver slipped again amid rising long-term US yields as holding the precious metal would incur a higher opportunity cost. The price has retreated to January’s low at 24.00. Profit-taking from short-term traders may help lift bids while an oversold RSI recovers into neutrality. However, sentiment would remain bearish as long as the price stays below 24.80. Trend followers are likely to sell into strength in case of a rebound near the moving averages. A drop below 23.60 could trigger an extended sell-off into the 22s.
Intraday Market Analysis – Extended Rally

Intraday Market Analysis – Extended Rally

John Benjamin John Benjamin 14.04.2021 08:34
EURUSD tests major resistanceA 2.6% yoy rise in US CPI has so far failed to impress traders as the Fed may remain patient longer than the market.After a short consolidation around 1.1900, the RSI has receded from the overbought area, laying the groundwork for a new round of rallies. The next target would be the key resistance level of 1.1990 from the daily chart.A bullish breakout may signal that the euro could resume its year-long rally.In case of a pullback, 1.1870 is a critical support to keep the optimism intact.EURGBP builds bullish momentumThe pound struggles across the board after Britain’s economy showed a slower than expected growth in February.The euro has previously come under selling pressure near the daily supply area (0.8730). The RSI has since retreated into the neutrality zone.Despite profit-taking, the pair has stayed afloat above 0.8620 which would suggest that buyers are still in control of the price action.A surge above the said resistance could trigger a runaway rally as a combination of short-covering and fresh buying.UKOIL trades in narrowing rangeBrent crude ticked up after data showed oil imports into China surged 21% in March. The price action remains range-bound however for lack of a major catalyst.The narrowing consolidation is a sign of the market’s indecision and a breakout is bound to happen soon.A bearish MA cross on the daily chart may weigh on the sentiment but as long as 61.20 holds firm as support, there is a chance of a rebound.On the upside, a rise above 65.15 could extend the rally towards 68.
Intraday Market Analysis – Recovery Momentum

Intraday Market Analysis – Recovery Momentum

John Benjamin John Benjamin 20.04.2021 08:33
EURUSD breaks above key resistanceThe euro recoups last month’s losses as traders reposition themselves for this week’s ECB meeting.After a few days of consolidation under the key level of 1.1990 from the daily chart, the strong momentum above this resistance is a confirmation that buyers are in control of the price action.1.2110 would be the next target as the pair makes its way back.An overbought RSI may lead to a brief pullback. If so, the demand area between 1.1880 and 1.1940 may see strong buying interest.USDJPY faces strong supplyThe market’s expectation of further falls in US Treasury yields keeps sending the greenback lower.The pair’s successive breakouts below the daily moving averages and the critical support at 108.40 have triggered a new round of sell-off.There is a chance of a rebound as traders take profit after the RSI went deeply into the oversold territory. Bears are likely to sell into strength in the supply zone around 108.90.On the downside, 107.80 would be the next target as a continuation of the bearish momentum.SP 500 tests rising trendlineMajor stock indices stay high on hopes that the recovery is firmly on track. The S&P 500 has been grinding up along a rising trendline established earlier this month.However, a double top in the RSI’s overbought area may temper buyers’ willingness to chase bids.The trendline (4150) is the immediate support as the index makes a retreat. 4120 is a key level to keep the uptrend intact in the short term.On the upside, the psychological level of 4200 could be the target as buyers push for a new record high.
Intraday Market Analysis – In Search Of Support

Intraday Market Analysis – In Search Of Support

John Benjamin John Benjamin 27.04.2021 08:11
EURUSD pulls back to supportThe euro popped higher after the Eurozone’s bond yields rose on improved sentiment. The pair maintained its recovery trajectory after it turned 1.1990 from resistance into support.The euro has met strong selling pressure at March’s high at 1.2110 while the RSI shot into the overbought area.The current retracement would test the demand zone between the psychological level of 1.2000 and 1.2045.A rebound followed by a rally above 1.2110 would suggest a bullish continuation towards 1.2180.NZDUSD rises above consolidation rangeRisk sentiment makes its return at the start of the week driving higher the commodity-linked New Zealand dollar.The pair has found strong support by the demand area above 0.7120. The current rebound is heading towards the key resistance (0.7270) from the daily chart.A bullish breakout could end the two-month-long consolidation and put the kiwi back on track.A rise above 0.7210 is the final confirmation for the bullish MA cross as the upward momentum accelerates. 0.7165 is the closest support in case of a retracement.XAUUSD tests major supportGold keeps the high ground as the US dollar index remains subdued near an eight-week low. Price action is currently sideways as buyers are trying to accumulate momentum after the latest series of higher highs.The RSI has cooled down from the overbought zone. The area around 1764 and the rising trendline (1770) is important support on an hourly basis.A rebound could propel the precious metal back to 1815.On the downside, however, a drop to 1744 may extend the consolidation by shaking out weak hands.
Intraday Market Analysis – Psychological Level

Intraday Market Analysis – Psychological Level

John Benjamin John Benjamin 03.05.2021 08:52
EURUSD retraces to major supportThe euro pulled back after the block’s CPI dropped to 0.8% in April. Though the pair maintains its bullish trajectory from the daily chart’s perspective, a healthy pullback seems necessary for buyers to catch up after it rose back above the last leg of sell-off (1.1990).With an RSI deep in the oversold area, the psychological level of 1.2000 near the 20-day moving average would be a critical level to test buyers’ confidence.The rally would only resume if the euro climbs back to the previous high at 1.2150,GBPJPY exhibits bearish MA crossThe Japanese yen gained traction after the unemployment rate fell to 2.6% in March. The pound falls back in search of the next support as the yen recoups losses across the board.The RSI’s double top in the overbought area was an indication of exhaustion past the key resistance at 152.00. A breakout below 151.00 would confirm the bearish MA cross.The next level to find potential buying interest would be around 150.10. On the upside, the long side will need to lift 152.10 to resume the U-turn.SPX 500 tests resistance-turned-supportThe S&P 500 consolidates recent gains as rebounding corporate profits raise investors’ risk appetite. Buyers are striving to hold above 4180 after they cleared the former supply zone.A rally above 4219 would open the path to a new high above 4300. However, a slide below could dent the short-term fever and trigger profit-taking.4140, the lower band of the previous consolidation range would be a major support to monitor.Its breach could lead to a deeper correction towards the rising trendline (4050) on the daily chart.
Intraday Market Analysis – NASDAQ Tests Bulls’ Commitment

Intraday Market Analysis – NASDAQ Tests Bulls’ Commitment

John Benjamin John Benjamin 12.05.2021 08:39
NAS 100 heads towards important support The tech index retreats as investors continue to rotate out of growth-sensitive stocks. A dead cat bounce to 13800 has met stiff selling pressure, turning the former support into a resistance. The nosedive below the temporary support level at 13400 is an indication that the short side has gained the upper hand. 12880 is a critical support from the daily chart as a bearish breakout could initiate a reversal in the medium term. On the upside, the index may see a limited rebound while the RSI recovers into the neutrality area. EURUSD tests major resistance The US dollar consolidates as traders await inflation data later today. The price is currently hovering under the daily supply zone around 1.2200. A breakout would confirm the bullish MA and put the euro back on track towards 1.24. However, the pair could be vulnerable to the downside as an overbought RSI indicates overextension. 1.2055 is the immediate support should there be a lack of momentum buyers. Further down, 1.1990 near the 30-day moving average is a critical level to keep short-term sentiment upbeat. GBPAUD breaks above double top The Australian dollar softens as commodity prices pull back. The pair has been grinding up steadily from its support base at 1.7780. The latest breakout above 1.8060 has shifted the action to the upside after two previous failed attempts. 1.8200, a major resistance level on the daily chart would be the next on the list. Its breach could reverse the pound’s misfortune and turn the thirteen-month-long downtrend around. In the meantime, a retracement on the back of an overbought RSI may meet buying interest around 1.8000.
Intraday Market Analysis – NASDAQ Tests Bulls’ Commitment - 12.05.2021

Intraday Market Analysis – NASDAQ Tests Bulls’ Commitment - 12.05.2021

John Benjamin John Benjamin 12.05.2021 08:41
NAS 100 heads towards important supportThe tech index retreats as investors continue to rotate out of growth-sensitive stocks. A dead cat bounce to 13800 has met stiff selling pressure, turning the former support into a resistance.The nosedive below the temporary support level at 13400 is an indication that the short side has gained the upper hand.12880 is a critical support from the daily chart as a bearish breakout could initiate a reversal in the medium term.On the upside, the index may see a limited rebound while the RSI recovers into the neutrality area.EURUSD tests major resistanceThe US dollar consolidates as traders await inflation data later today.The price is currently hovering under the daily supply zone around 1.2200. A breakout would confirm the bullish MA and put the euro back on track towards 1.24.However, the pair could be vulnerable to the downside as an overbought RSI indicates overextension. 1.2055 is the immediate support should there be a lack of momentum buyers.Further down, 1.1990 near the 30-day moving average is a critical level to keep short-term sentiment upbeat.GBPAUD breaks above double topThe Australian dollar softens as commodity prices pull back. The pair has been grinding up steadily from its support base at 1.7780.The latest breakout above 1.8060 has shifted the action to the upside after two previous failed attempts.1.8200, a major resistance level on the daily chart would be the next on the list. Its breach could reverse the pound’s misfortune and turn the thirteen-month-long downtrend around.In the meantime, a retracement on the back of an overbought RSI may meet buying interest around 1.8000.
Watch Out As Gold Appears To Be Staging New Momentum Base In Preparation For A Big Upside Move

Watch Out As Gold Appears To Be Staging New Momentum Base In Preparation For A Big Upside Move

Chris Vermeulen Chris Vermeulen 17.05.2021 15:03
Although Gold has continued to drift downward after reaching a peak near $2089.20 in early August 2020, our Custom Gold Inverse Trending Index suggests this weakness has actually built a very strong momentum base – preparing for a big move higher.The relationship of Gold to the US Dollar is a fairly widely known correlation.  When the US Dollar is weaker, Gold tends to rally.  When the US Dollar is stronger, Gold tends to be weaker.  Yet the combination of EURUSD and JPYUSD (plotted in INVERSE) in combination to the trend of the US Dollar related to Gold is difficult to ignore.  Let's explore this unique correlation a bit deeper.Exploring Currency/Gold Correlations – Are We Starting A New 7 Year Gold Rally?The Weekly Gold vs Currencies Chart, below, may seem a bit complicated, so let me try to explain what I'm trying to illustrate. First, the CYAN colored line is the US Dollar Index.  What I want to share with you is the US Dollar enters periods of strength or weakness for extended periods of time.  You can see the US Dollar Index weakening near the left edge of this chart near 2006-07, then strengthening again after a moderate bottom near 2013~14, then starting to weaken again after the recent peak in March 2020.  These roughly 7-year cycles act as major US Dollar Index bias trends.  We are current within a weakening US Dollar Index bias based on our research.Second, the 85 to 86 level on the US Dollar appears to be a moderately critical support level.  When the US Dollar falls below this level, entering a period of broad overall weakness, Gold tends to react to US Dollar strength more aggressively than when the US Dollar stays above the 85~86 level.  A good example of this can be seen by the 2019 to 2020 rally in Gold while the US Dollar Index traded moderately higher while above the 86 level.Next, when the EURUSD and JPYUSD move into a position of strength compared to the US Dollar, Gold tends to trend generally higher as the US Dollar weakness is persistent in driving traders/investors into safe-havens.  The 0.65 level, the BLUE line, on this chart highlights the combined threshold for the US Dollar Index and the EURUSD/JPYUSD trend bias.Lastly, we want to highlight how Gold reacted to US Dollar bottoming rotations in different bias trends.  We've highlighted a number of US Dollar bottoms with MAGENTA arcing arrows.  Notice how stronger upside moves in the US Dollar Index while trading below the 85~86 level prompted fairly deep downside price trends in Gold.  You can see this happen over and over again in 2008, 2010, and 2011.  Now, compare the US Dollar rallies/bottoms in 2014, 2016, and 2018 to how Gold reacted while the US Dollar Index had transitioned into a bullish bias (moving above the 85~86 level, or trending towards this bias). The deep low in the US Dollar Index in 2011 prompted a very big change of trend for Gold – prompting a -20% decline followed by a deeper -38% decline before starting to bottom in 2015.  The US Dollar bottom in 2015 prompted another-20% decline in Gold prices, yet the transition of the US Dollar moving to levels above 85~86 while the EURUSD/JPYUSD fell below 0.65 prompted a shift in how Gold started reacting to US Dollar weakness.  The US Dollar bottom in 2016 actually prompted some moderate strength in upside trending in Gold and continued a new bullish bias for Gold over the past 6+ years.Sign up for my free trading newsletter so you don’t miss the next opportunity!Now, with Gold rallying off the current US Dollar weakness while trading quite strongly above $1800, we are starting to see a transitional shift in the US Dollar Index and the EURUSD/JPYUSD correlation.  Just like in 2006-07, if the US Dollar continues to weaken and trail below the 85~86 level, the current bullish trending in Gold will likely continue to strengthen.  At that time, reactions to US Dollar bottoms may prompt some Gold volatility and rotation, yet the bias of the trending appears to be starting a new 7-year bullish Gold trending phase (just like what happened between 2007 and 2014).  All we need to see happen is for the US Dollar to continue to weaken to levels below 85~86 (or continue to drift lower) while the EURUSD/JPYUSD correlation continues to strengthen.Comparing Inverse EURUSD/JPYUSD to Gold TrendsOur research team decided to try to use the EURUSD/JPYUSD correlation and attempt to align it to the price of Gold.  In order to do this, because of the inverse price relationship between the two, we had to invert the EURUSD/JPYUSD price structure.The Japanese Candlesticks on the chart, below, are reflective of our EURUSD/JPYUSD correlation to Gold.  The GOLD line on the chart, below, is the real Gold Futures price level.We are starting to see an upward price correlation between these two symbols as well as a potential technical correlation setting up over the next few weeks.  If the US Dollar continues to weaken, pushing the EURUSD/JPYUSD higher, we'll likely see an RSI bullish breakout confirm the price trigger that has just broken the downward price channel on this chart (the MAGENTA line).It appears the recent weakness in Gold translates into the building of a new momentum base for precious metals near $1700.  Are you ready for what may come next?Although it may be difficult for you to see and understand these broad market bias phases and cycle trends, there are two key elements I hope you to conclude from our research:It appears a, roughly, 7-year currency/gold cycle phase takes place where the US Dollar becomes decidedly weaker while the EURUSD/JPYUSD becomes decidedly stronger – then these two switch directions/strengths.  When the US Dollar is weaker throughout this 7 year cycle phase, Gold tends to become a bit more reactive to US Dollar strength, yet Gold continues to trend higher showing a very defined bullish trend bias.The transitional process of this cycle phase appears to be shifting into US Dollar weakness right now.  The recent downward price trend in Gold appears to be a new Momentum Base in price near, or above $1700.  If our research is correct and the proposed current transition takes place in the near future (the new cycle phase), we may see Gold enter a very defined bullish trend bias lasting more than 4~5+ years.If you believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily pre-market reports, proprietary research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers. Sign up today!In Part II of this article, I will explore longer term charts and how this currency correlation may be confirming a big upward price trend in Gold and what it means for traders/investors.  I will also explore how this new potential rally phase in gold translated into proper positioning of assets and preparations for broad market volatility.Have a great weekend!
Metals Preparation For A Big Upside Move (Part II)

Metals Preparation For A Big Upside Move (Part II)

Chris Vermeulen Chris Vermeulen 18.05.2021 05:23
In the first portion of this research article, I highlighted the correlation between Gold and the US Dollar as well as the correlation between the US Dollar and the EURUSD and JPYUSD.  The purpose of this example was to highlight the different phases of US Dollar appreciation vs depreciation compared to the EURUSD/JPYUSD.  The EURUSD and JPYUSD are often compared to the US Dollar as major global currencies.  Therefore, when the US Dollar moves into a depreciation phase, we expect to see the EURUSD and JPYUSD move into an appreciation phase.How this correlated to the price of Gold and the phases of advancing vs declining precious metals is simple to understand.  Gold will stall, or more broadly downward, while the US Dollar is within an advancing/appreciation phase.  Gold will move higher or begin an upward trend bias when the US Dollar begins to generally weaken or moves into a declining/depreciation phase.Understanding Cycle Phases & Correlative Gold Price Trend BiasIn the first portion of this research article, I highlighted this relationship by detailing the 2007-08 US Dollar depreciation phase that lasted until a major bottom setup in 2014 (almost exactly 7 years).  That next US Dollar appreciation phase lasted until a recent major peak in March 2020 (almost exactly 7 years).  If the US Dollar continues to decline in value after the COVID-19 virus event and the change in cycle phases, we can expect another 5 to 7+ years of advancing precious metals prices as a result.The recent bottoming in Gold, just above the $1700 price level, set up a very unique scenario related to potential future advances in price.  The current Gold rally from the 2015 lows, near $1045.40, to recent highs near $2089.20 represents almost a 100% price advance.  In my opinion, this rally in Gold is similar to the rally that took place between 2000 and 2005 – starting near the end of a US stock market appreciation phase and lasting about 3.5 years into a US stock market depreciation phase.  Our researchers believe the US stock market has completed a recent price appreciation phase in 2018~2019 and that we are only about 1~2 years into a new US stock market depreciation phase – which may last until 2027~2029.The Monthly Gold Futures chart, below, highlights these Appreciation/Depreciation phases and the advancing/declining price of Gold over the past 25+ years.  We want you to pay very close attention to how Gold started to rally in 2000 as the markets peaked because of the DOT COM rally.  This rally started in the midst of a US stock market appreciation phase – just like what happened in 2015.  Gold prices rallied from the 2000 lows to reach the initial +100% advance by early 2006 (in the midst of a housing market rally and in the midst of a Depreciation US stock market phase).  After that, Gold rallied another +265% reaching a peak price level $1923.70 in September 2011.Currently, Gold has rallied approximately 100% from the 2015 lows – similar to the 2000~2006 rally.  The current downside price move in Gold suggests the recent highs, near $2089.20 in August 2020, complete a Cup-n-Handle pattern.  Additionally, because we have just entered a US stock market Depreciation phase, we believe the price of Gold will continue to advance to levels highlighted in the chart above.  The first target level is $2600, then $3200, then $3790.Sign up for my free trading newsletter so you don’t miss the next opportunity!Our Currency Correlation Inverse Trend Index also aligns with the Appreciation/Depreciation cycle phases.  If the US Dollar continues to decline in value over the next 2 to 5+ years, attempting to consolidate below $84 as it has done in the past, then we believe the EURUSD/JPYUSD currency values may advance above the threshold (near 0.65) to prompt a stronger rally in precious metals over the next 4+ years.US Dollar & Currency Correlations Suggest Big Advance In Metals Is PendingThe primary driver of this move is the declining US Dollar – not the move higher in the EURUSD or JPYUSD.  These other currencies are simply barometers of the global perception of the strength of the US Dollar.  A weakening US Dollar will usually be prompt a moderate advance in Gold prices.  We believe the correlation between the US Dollar value (above or below the 85~86 level), as well as the correlation of the strength of the EURUSD and JPYUSD in comparison to the US Dollar, may prompt a change in how Gold reacts to moderate trend bias as well as how Gold reacts to changes in the US Dollar trends.  The bias trend of Gold within this extended market cycle phase tends to mitigate Gold price volatility as the US Dollar temporarily bottoms/bases and starts to rise.  This suggests a broader rally in Gold throughout this new market cycle phase may extend much higher than many people expect.The following Monthly Custom Metals Inverse Trend chart, below, highlights the bottoming/basing formation in the currency correlation compared to Gold.  You can see the moderately deep bottom that set up in Gold between the peak in 2011 and the bottom in 2015, as well as the recent rally in gold to the new highs.  The recent moderate selloff in Gold correlated to a very minor decline in the Inverse Currency Index – suggesting that a bigger rally is setting up as currencies rotate into the new cycle phase.Our Custom Metals Index Weekly chart, below, highlights the recent upward price rotation in the precious metals/miners sectors.  Pay very close attention to the RED price channels on this chart and the LIGHT BLUE arching GANN Fan resistance levels near the recent tops in price.  We believe any upside price advance above these current GANN arcs will prompt a rally that may push metals prices back into the RED price channels – advancing possibly +10% to +30% higher before the end of 2021.  This advance may prompt Gold to rally to levels near our $2600 price target before the end of 2021.  Silver may advance to levels above $39~$44, more than 30% to 40% from current price levels if Gold continues to advance as we expect.US Dollar Flirting With Massive Price Decline Once $89.00 Is BreachedOne key factor that is likely to drive this new advance in Gold and Silver – the US Dollar trends.  I am watching two critical support levels in the US Dollar right now; $89.70 and $89.20.  If the US Dollar falls below either of these support levels, Gold will likely advance higher as the currency depreciation cycle phase appears to be continuing to engage as we expect.  Remember, the key level for the US Dollar is that 85~86 level. The closer we get to those levels, the more conviction traders and investors will have regarding the advancing precious metals prices.  The 89 price level for the US Dollar is likely the breaking point for this cycle phase to really break loose so watch that level very closely.As the US stock market attempts to shrug off inflationary concerns and worries that the US Fed may be forced to raise rates to curb inflationary trends, Traders and Investors should start to pay attention to precious metals and the currency correlations related to these broader market cycle phases.  My research team and I have published a number of articles related to these Appreciation/Depreciation cycle phases and attempted to warn of potential market volatility events over the past 8+ months, including: How To Spot The End of an Excess Phase (November 27, 2020); Are We Days Away From Potential GANN/Fibonacci Price Peak? (March 17, 2021); Adapting Dynamic Learning Shows Possible Upside Price Rally In Gold & Silver (November 22, 2020).What is important to understand about this potential cycle phase shift and new precious metals trend bias is that it may take many weeks or months to complete before the bigger rally really starts to build momentum.  Yet, the evidence is starting to build that a decreasing US Dollar trend may prompt this new cycle phase shift in the currency correlation and that may prompt a big shift in how precious metals and miners start to rally higher.  Right now, we are seeing Gold and Silver start to shift into a new bullish trend bias – therefore, we may be starting to see a shifting in expectations; which is very similar to what we saw in 2000~2005 – just before Gold exploded higher.Make sure you stay on top of the prices of precious metals if you want to be able to take advantage of the expected rally. Every morning I share my market analysis and review the price action of precious metals with my premium subscribers of BAN Trader Pro. Join now to get my pre-market video analysis deilvered to your inbox every morning, and get ready for a great ride in Gold and Silver over the coming months and years!Enjoy the rest of your weekend!!
Intraday Market Analysis – Euro Searches For Support

Intraday Market Analysis – Euro Searches For Support

John Benjamin John Benjamin 20.05.2021 07:43
EURUSD retreats from resistanceThe euro slowed its advance after April’s CPI dropped to 0.7% YoY.The pair has met selling pressure at February’s peak at 1.2240. An overbought RSI is likely to prompt short-term players to take profit, pushing the price into a deeper correction.The divergence is a sign of loss of momentum in the bid war. The previous supply zone near 1.2150 has turned into a support where buyers may wait for a bargain.On the upside, a bullish breakout could trigger an extended rally above 1.2300.USDCAD rebounds to resistanceThe US dollar climbed back after the Fed minutes left the door open for discussing tapering. The pair had previously dipped below September 2017’s low at 1.2060, increasing the downward pressure.The rebound may turn out to be elusive just to let the RSI recover into the neutral area. The price action faces multiple layers of resistance.After clearing the closest one at 1.2135 early bulls will need to lift 1.2200 to force sellers to start to fold.On the downside, a return to 1.2010 may send the exchange rate towards 1.1920.UK 100 consolidates above major supportFTSE 100 remains under pressure after the UK’s inflation doubled to 1.5% last month. The surge from the demand area near 6840 indicates buyers’ commitment to keep the boat afloat.Recent whipsaws are a strong sign of the market’s indecision in the short term. Sideways action may offer opportunities for range trading.The psychological level of 6900 is a demand area. An oversold RSI could help lift the index temporarily.7066 is the immediate resistance and its breach could send the price back to 7166.
Intraday Market Analysis – EUR Sees Deeper Correction

Intraday Market Analysis – EUR Sees Deeper Correction

John Benjamin John Benjamin 04.06.2021 09:48
EURUSD confirms bearish divergenceThe US dollar further recovers after the ADP showed nearly a million jobs added last month.A bearish RSI divergence in the supply area (1.2255) was a forward warning that the previous rally was losing steam.The fall below 1.2185 suggests that the bulls may start to unwind their positions. A brief rebound around 1.2200 saw strong selling interest. Sentiment has turned bearish and the drop below 1.2130 could trigger a broader sell-off towards 1.2070, the first support found on the daily chart.AUDJPY sold from major resistanceThe Australian dollar slipped after muted retail sales in April. The pair has met stiff selling pressure near 85.15. Four failed attempts to clear this resistance level suggest exhaustion from the buy-side.The break below 84.75 could be the straw that broke the camel’s back as buyers start to bail out. The sell-off could gain momentum once it goes below 84.55. Then 84.25 is the next support.An oversold RSI may lead to a temporary pullback, which could turn out to be a dead cat bounce.NAS 100 falls from daily resistanceEquity markets dip on upbeat jobs numbers as the inflation scare resurfaces.The Nasdaq 100 has been struggling near 13800, a major resistance level on the daily chart. The first dip below 13620 has prompted cautious buyers to get out near 13710 while they still could.13400 is the base of the latest rally and a key support in the short term. Its breach could send the index to 13160. An oversold RSI may temporarily alleviate the selling pressure as new sellers await a rebound before joining in.
Intraday Market Analysis – EUR Awaits Momentum Catalyst

Intraday Market Analysis – EUR Awaits Momentum Catalyst

John Benjamin John Benjamin 10.06.2021 07:40
EURUSD grinds major resistanceThe euro consolidates its recent gains ahead of today’s ECB meeting. The pair has recovered from the 30-day moving average (1.2105).Hourly MAs have shown a bullish cross through the path upward could be choppy. A break above 1.2205, the origin of the latest sell-off would strengthen the bullish bias. Lifting 1.2250 would be a step closer to the peak at 1.2350.In the meantime, an overbought RSI has prevented traders from chasing momentum. 1.2150 is the immediate support.USDCAD trades in a limited rangeThe Canadian dollar dropped after a dovish BoC gave no hint of taper. The US dollar has been treading water near a six-year bottom. The horizontal consolidation between 1.2010 and 1.2140 is a sign of the market’s indecision.The bears may have covered some of their bets as the RSI showed a deeply oversold situation on the daily chart. Though sentiment remains bearish unless the greenback clears offers at the critical resistance at 1.2175.1.2060 has become the immediate support as the range narrows.WTI rally gains tractionOil prices rose after the US secretary of state said sanctions on Tehran may not be lifted. WTI crude gained momentum after it closed above the March peak and psychological level at 68.00. Following a brief sideways action, 68.50 has established itself as key support.A short-term pullback has allowed the RSI to become neutral again. 70.60 is the closest resistance.The 20-hour moving average would cross above the 30-hour one when the rally picks up steam again. Then 72.40 would be the next target.
Intraday Market Analysis – EUR Seeks Rebound Opportunity

Intraday Market Analysis – EUR Seeks Rebound Opportunity

FXMAG Team FXMAG Team 28.06.2021 08:36
EURUSD hovers under psychological resistanceThe euro bounced back after the core PCE of the US stayed subdued in May.After rallying above 1.1910, price action has turned this former resistance into a support base. The current consolidation could be an accumulation phase for the buy-side.Early bulls are aiming at the psychological level of 1.2000. A bullish breakout would force sellers to unwind their positions and trigger a recovery above 1.2100.In the meantime, buyers could be getting involved while the RSI is in the neutral area.GBPJPY tumbles from supply zoneThe sterling continues to suffer from BOE’s warning against “premature tightening”.The pair has met stiff selling pressure in the supply zone around 155.20, a major resistance from the daily chart. The sell-off has accelerated after the support at 154.20 failed to hold.The subsequent drop below 154.00 was a confirmation of the bearish MA cross. 154.50 has become a resistance. 153.10 is the next support as the RSI bounces off an oversold situation. Below that, the price may retrace all the way back to 152.00.US 30 breaks above multiple resistancesThe Dow Jones recouped recent losses as investors’ buy-in for Biden’s infrastructure deal.The bulls have successfully pushed past 34100 then 34350. This indicates that the lack of selling interest has helped buyers regain the upper hand.Momentum traders seem unfazed by an overbought RSI so far. The index is heading towards 34750, a supply zone from the previous sell-off. A bullish breakout would open the door to the peak at 34850.On the downside, the psychological level of 34000 has turned into a key support.
Intraday Market Analysis – USD Seeks Support Post-NFP

Intraday Market Analysis – USD Seeks Support Post-NFP

FXMAG Team FXMAG Team 06.07.2021 08:48
EURUSD struggles to bounceThe US dollar drops after an uptick in last month’s unemployment rate. Sentiment towards the euro grew a tad more bearish after it fell below 1.1850, the support of the recent consolidation range.However, an RSI divergence suggests a loss in the downward momentum, and its double-dip into the oversold territory may make sellers reluctant to double down. Buyers will need to lift offers around 1.1880 before they could push for a reversal.Below 1.1800, the pair would be heading towards the daily support at 1.1710 by default.XAGUSD rallies above resistanceBullions bounce back as weaker-than-expected jobs data take a toll on the US dollar.On the daily chart, silver has found support at the 61.8% (25.70) Fibonacci retracement level from the late March rally. 26.50 has so far capped the bulls’ attempts.The latest breakout is a confirmation of the previously mentioned bullish RSI divergence. The bears may rush to cover their bets before it becomes too expensive to do so.27.20 would be the next target when the rebound gains traction.GER 30 looks to break out of triangleThe DAX 30 consolidates near its recent peak as the euro zone’s economy picks up steam.The index is in an ascending triangle as buyers are willing to pay up. This often occurs as a continuation pattern as the price will typically breakout in the same direction as the underlying trend.A close above 15750 may prompt the last sellers to cover. The RSI stays neutral, laying the groundwork for a breakout. A runaway rally could lift offers towards the milestone at 16000.A drop below 15500, however, may trigger a correction to 15280.
Intraday Market Analysis – USD Seeks Support Post-NFP - 06.07.2021

Intraday Market Analysis – USD Seeks Support Post-NFP - 06.07.2021

FXMAG Team FXMAG Team 06.07.2021 08:48
EURUSD struggles to bounceThe US dollar drops after an uptick in last month’s unemployment rate. Sentiment towards the euro grew a tad more bearish after it fell below 1.1850, the support of the recent consolidation range.However, an RSI divergence suggests a loss in the downward momentum, and its double-dip into the oversold territory may make sellers reluctant to double down. Buyers will need to lift offers around 1.1880 before they could push for a reversal.Below 1.1800, the pair would be heading towards the daily support at 1.1710 by default.XAGUSD rallies above resistanceBullions bounce back as weaker-than-expected jobs data take a toll on the US dollar.On the daily chart, silver has found support at the 61.8% (25.70) Fibonacci retracement level from the late March rally. 26.50 has so far capped the bulls’ attempts.The latest breakout is a confirmation of the previously mentioned bullish RSI divergence. The bears may rush to cover their bets before it becomes too expensive to do so.27.20 would be the next target when the rebound gains traction.GER 30 looks to break out of triangleThe DAX 30 consolidates near its recent peak as the euro zone’s economy picks up steam.The index is in an ascending triangle as buyers are willing to pay up. This often occurs as a continuation pattern as the price will typically breakout in the same direction as the underlying trend.A close above 15750 may prompt the last sellers to cover. The RSI stays neutral, laying the groundwork for a breakout. A runaway rally could lift offers towards the milestone at 16000.A drop below 15500, however, may trigger a correction to 15280.
Intraday Market Analysis – Euro Gains Momentum

Intraday Market Analysis – Euro Gains Momentum

FXMAG Team FXMAG Team 02.08.2021 09:10
EURUSD breaks resistanceThe euro inched higher after the eurozone’s Q2 GDP growth topped estimates.The pair has crossed above the 30-day moving average on the daily chart, a sign of unwavering interest from the demand zone at 1.1750. Strong momentum above 1.1880 could be a short squeeze.With sellers out of the picture, for now, buyers will need to consolidate their gains before they could stage a reversal beyond 1.1910. An overbought RSI has led to a limited pullback as intraday bulls take profit. 1.1840 would be the immediate support.USDCAD tumbles through supportThe Canadian dollar rallies as Canada’s GDP showed a smaller contraction in May. The US dollar’s break below 1.2430, a key support from the daily time frame, indicates that sentiment still favors its northern neighbor.The RSI has risen back to the neutrality area, which may give the bears enough room to sell the next rebound. The support-turned-resistance at 1.2550 could be the key hurdle.On the downside, renewed momentum below 1.2420 may push the greenback to the base of July’s rally at 1.2300.XAGUSD attempts bullish reversalSilver extends the rally as the US dollar weakens across the board.An RSI divergence has previously revealed a slowdown in the bearish momentum. The price bounced sharply after the sellers’ last tentative push. The surge above 25.40 suggests broad profit-taking.Once the dust settles and the RSI drops back from its overbought situation, buyers could be looking to initiate a reversal from the psychological level of 25.00 which sits in a former supply zone. 26.20 would be the target if they can gather enough impetus.
Intraday Market Analysis – US Stocks Continue To Soar

Intraday Market Analysis – US Stocks Continue To Soar

FXMAG Team FXMAG Team 11.08.2021 09:18
US 30 shoots to new highThe Dow Jones 30 rose to a record high after the US Senate passed the $1 trillion infrastructure bill. The initial surge above 35100 was a sign of strong buying interest.The index has then found support at 35030 near the top of the previous consolidation range.A series of higher highs indicates that the bullish bias is still intact.The RSI has popped up into the overbought area once again, and a temporary pullback may allow the bulls to raise their stakes. 35500 would be the next stop as the rally picks up steam.EURUSD lacks supportDownbeat economic sentiment in the eurozone further depresses the euro against a roaring US dollar.The break below 1.1760 from the daily chart has put buyers on the defensive. Strong inertia in favor of the greenback fuels the bearish ride as momentum traders pile in.The former support has turned into resistance (1.1770). The euro is testing the next support at 1.1710, where a bearish breakout may extend the sell-off to last November’s low at 1.1600.Then a reversal could be in the making in the medium term.XAGUSD sinks to major supportBullions struggle as US bond yields rise amid hawkish Fed comments about a taper in the fourth quarter.Silver’s latest rally may turn out to be a dead cat bounce as sentiment remains extremely cautious. Price action is grinding down along the moving averages.24.35 is now the new resistance. Sellers would be eager to dump at a better price before the RSI goes oversold again.The psychological level of 22.00 from last November would be a critical test of the rally from March 2020.
Intraday Market Analysis – USD Keeps Bullish Bias

Intraday Market Analysis – USD Keeps Bullish Bias

FXMAG Team FXMAG Team 19.08.2021 09:59
EURUSD breaks critical supportThe US dollar rose after the Fed minutes suggested tapering later this year.The euro’s previous rebound had met stiff selling pressure at 1.1800. The slide below 1.1710 (a critical support from last March) is an indication that sellers still have control of the direction.A temporary bounce while the RSI recovers to the neutrality area can be an opportunity to sell into strength.The former support at 1.1740 has turned into a supply zone. Below 1.1700 renewed momentum may drive the pair to October’s low at 1.1600.GBPUSD sees limited reboundThe sterling remains under pressure after the UK’s lower-than-expected core CPI in July. The break below the intermediate support at 1.3800 has accelerated the downward impetus.An oversold RSI has helped lift the price but this could be a dead cat bounce with sellers eager to double down at a better fill.1.3780 is a fresh resistance and likely to check the pound’s advance. 1.3700 is the closest support which coincides with the 61.8% Fibonacci retracement of the July rally.Further down, 1.3600 is a demand zone on the daily chart.USDCAD resumes rallyUpbeat BOC CPI failed to outweigh the US Fed’s hawkish July minutes. The US dollar’s rally has gained traction after it cleared the supply area at 1.2600.A combination of short-covering and fresh buying suggests that the uptrend may have resumed after a month-long consolidation. An overbought RSI may cause a limited pullback.The resistance-turned-support at 1.2580 would see buying interest in that case. On the upside, a break above 1.2700 could open the door to the peak at 1.2800.
Intraday Market Analysis – USD Sees Limited Rebound

Intraday Market Analysis – USD Sees Limited Rebound

FXMAG Team FXMAG Team 01.09.2021 10:44
EURUSD continues to recoverThe US dollar continues to soften from weaker-than-expected consumer sentiment in August.The euro bulls gained confidence after the single currency rallied above 1.1800, an important supply zone from the mid-August sell-off. Now, this has turned into an area of congestion along a rising trendline. Furthermore, it is a clear indication of a bullish bias in the short term.However, an overbought RSI may lead to a limited pullback. A bounce off 1.1795 would propel the pair to the daily resistance at 1.1900.USDCAD struggles for supportThe Canadian dollar stalled after the Q2 GDP fell short of expectations. The US counterpart is testing the 30-day moving average and last week’s rebound failed to make an impression.The fall below 1.2580 suggests a lack of buying interest. 1.2500 on the daily chart is a critical floor. A deeper retracement would put buyers on the defense with 1.2300 as a potential target.On the upside, buyers will need to rack up offers at 1.2700 before they could hope for a second chance. Then 1.2900 would be within reach.AUDUSD rises to major resistanceThe Australian dollar edges higher on upbeat Q2 GDP. The pair continues to recover along a rising trendline after it bounced back from the daily demand area near 0.7100.The bullish pace accelerated after the first resistance at 0.7170 was lifted. Buyers are pushing towards the major hurdle at 0.7400 from the daily time frame.A bullish breakout may trigger a runaway rally as medium-term sellers cover their positions. That in turn could end a three-month correction. 0.7290 is fresh support to let the RSI return to neutrality.
Intraday Market Analysis – The Euro Attempts To Bounce

Intraday Market Analysis – The Euro Attempts To Bounce

John Benjamin John Benjamin 10.09.2021 10:33
EURUSD tests supportThe euro steadied after the ECB signaled it would reduce its bond-buying under PEPP.The pair is looking for support after it met strong selling pressure at the daily resistance near 1.1900. An oversold RSI has attracted buying interest as the price tests the support at 1.1800.A rebound above the double top (1.1900) would put the single currency back on track and extend the rally to 1.1970.A close below said support would deepen the correction to 1.1740 at the origin of the late August breakout.US 30 struggles to reboundThe Dow Jones 30 recoups losses over new low jobless claims. Price action’s struggle near the top at 35630 suggests a lack of commitment for a new high.The subsequent drop below the consolidation range (35200) has prompted short-term buyers to take the exit. However, an oversold RSI has drawn a buy-the-dips crowd.After a bounce above 35150, the index will need to clear 35400 before the rally could resume. 34600 is critical support on the daily chart to keep the bullish bias valid.USOIL consolidates gainsWTI crude tumbled after the EIA reported only a slight decrease in stockpiles.Sentiment has shifted to the bullish side after a recovery above the daily resistance at 69.50. The sideways action has allowed buyers to hold onto recent gains.The RSI’s double-dip in the oversold area has soaked up bids with 67.20 as fresh support.If the bulls succeed in lifting the hurdle at 70.50, 74.10 could be the next target when momentum makes its return. 65.40 would be the second line of defense in case of a pullback.
Intraday Market Analysis – The Euro Attempts To Bounce - 10.09.2021

Intraday Market Analysis – The Euro Attempts To Bounce - 10.09.2021

FXMAG Team FXMAG Team 10.09.2021 11:02
EURUSD tests supportThe euro steadied after the ECB signaled it would reduce its bond-buying under PEPP.The pair is looking for support after it met strong selling pressure at the daily resistance near 1.1900. An oversold RSI has attracted buying interest as the price tests the support at 1.1800.A rebound above the double top (1.1900) would put the single currency back on track and extend the rally to 1.1970.A close below said support would deepen the correction to 1.1740 at the origin of the late August breakout.US 30 struggles to reboundThe Dow Jones 30 recoups losses over new low jobless claims. Price action’s struggle near the top at 35630 suggests a lack of commitment for a new high.The subsequent drop below the consolidation range (35200) has prompted short-term buyers to take the exit. However, an oversold RSI has drawn a buy-the-dips crowd.After a bounce above 35150, the index will need to clear 35400 before the rally could resume. 34600 is critical support on the daily chart to keep the bullish bias valid.USOIL consolidates gainsWTI crude tumbled after the EIA reported only a slight decrease in stockpiles.Sentiment has shifted to the bullish side after a recovery above the daily resistance at 69.50. The sideways action has allowed buyers to hold onto recent gains.The RSI’s double-dip in the oversold area has soaked up bids with 67.20 as fresh support.If the bulls succeed in lifting the hurdle at 70.50, 74.10 could be the next target when momentum makes its return. 65.40 would be the second line of defense in case of a pullback.
Intraday Market Analysis – USD Lacks Rebound Strength

Intraday Market Analysis – USD Lacks Rebound Strength

John Benjamin John Benjamin 14.09.2021 08:21
EURUSD seeks supportThe US dollar advanced after the Philadelphia Fed President commented in favor of tapering this year.The single currency has not looked back after it turned away from the daily resistance at 1.1920. The bulls’ effort to bid at 1.1800 has been futile.An oversold RSI has attracted some buying interest, but they will need to clear the fresh hurdle at 1.1840. Then 1.1900 would be the next stop.Failing that, the rebound could be an opportunity to sell into strength. 1.1740 is a key support in case of an extended pullback.USDNOK tests supply areaThe Norwegian krone held onto its gains thanks to a recovery in oil prices.The drop below the daily support at 8.7200 suggests that sentiment has turned sour in the short term. The US dollar’s failure to rally back above the supply zone at 8.7300 adds more pressure to the long side.An oversold RSI has led to a limited rebound. If buyers can clear said resistance, they may gain confidence to claim back 8.8400.Otherwise, a new round of sell-off would push the price to another support (8.5200) on the daily chart.UK 100 bounces off daily supportThe FTSE 100 recoups losses supported by strong performance in cyclical stocks. The index has bounced off the critical support (6970) from the daily chart.An oversold RSI near the psychological level of 7000 has attracted bargain hunters. A bullish MA cross confirms the upward bias. 7100 from the latest sell-off is key resistance and its breach could raise bids to the triple top at 7210.In the meantime, the RSI’s overbought situation may temporarily limit the buying power and the bulls would have to wait to buy the dip.
Intraday Market Analysis – USD Struggles To Find Bids

Intraday Market Analysis – USD Struggles To Find Bids

Jing Ren Jing Ren 29.07.2021 09:52
EURUSD attempts reversal The US dollar tumbled after Fed Chairman Jerome Powell said it is nowhere near a rate hike. The RSI divergence was a giveaway that the sellers may have taken their feet off the pedals. The break above 1.1820 suggests that buyers were trying to get back into the game. As the pair grinds its way up, a close above 1.1850 may foreshadow a U-turn in the coming days, prompting sellers to cover. 1.1880 could be the last hurdle and its clearance may trigger a runaway rally. 1.1770 is a fresh support in case of a pullback. CADJPY tests psychological level The Canadian dollar inched higher after a better-than-expected CPI in June. The bulls are looking to extend the rebound from 85.50, a major support on the daily chart, in order to resume the fifteen-month long uptrend. The break above the support-turned-resistance of 87.60 has put the bears under pressure. The psychological level of 88.00 has so far capped the loonie’s advance. However, an oversold RSI may help gather more buying interest. 86.60 is the immediate support if the consolidation drags on. NAS 100 recoups losses The Nasdaq 100 recovers from profit-takings as investors continue to digest Q2 earnings. The technical pullback has found bids on the 20-day moving average (14800). Buyers were quick to see the oversold RSI as a bargain indicator. The bullish mood remains intact as long as the price is above the previous demand zone near 14550 from the daily chart. Consolidation may run its course for a few more hours as short-term bulls rebuild their stakes. Those armed with patience may wait for a clean break above the peak at 15140.
Intraday Market Analysis – USD Lifts Key Resistance

Intraday Market Analysis – USD Lifts Key Resistance

Jing Ren Jing Ren 17.06.2021 08:57
EURUSD plunges in search of support The US dollar surges as the Fed signals interest rate hikes in 2023. The pair has been in a steady retracement after it broke above the daily resistance at 1.2240. Though the breach of the major support at 1.2070 may have dented the bullish fever. The RSI is deep in the oversold zone. The demand area between 1.1990 and the psychological level of 1.2000 could see a limited rebound as a result of profit-taking and dip-buying. 1.1940 could be the next target while 1.2130 has become the new resistance. USDCAD cuts through critical resistance The Canadian dollar slumped against its buoyant US counterpart despite Canada’s upbeat CPI. The greenback has pierced through the key resistance at 1.2200. The bullish breakout could initiate a reversal as sellers scramble to cover. The pair is looking to consolidate its gains above the 30-day moving average. 1.2300 is the next resistance. The RSI has ventured again in the overbought area and could face a pullback as momentum players take chips off the table. 1.2155 is the immediate support in case of a retreat. EURGBP tests lower band of consolidation range Sterling rallied after the UK’s core CPI jumped to 2% yoy in May. The euro’s last rebound has once again failed to clear the supply zone near 0.8630. Stiff selling pressure has pushed the pair below 0.8580, the origin of the latest rally. This suggests that sellers still have the upper hand in the general direction. An oversold RSI may prompt intraday traders to take profit. The demand zone between 0.8560 and 0.8570 at the lower range of consolidation is critical. Its breach could trigger a sell-off towards 0.8500.
Intraday Market Analysis – USD Rally Slows Down

Intraday Market Analysis – USD Rally Slows Down

John Benjamin John Benjamin 22.09.2021 08:53
EURUSD tests demand areaThe US dollar treads water ahead of the Fed meeting. After a limited rebound, the euro’s fall below 1.1750 has put the bulls on the defensive.The pair is testing the demand zone around 1.1700 with the lower boundary being the critical daily support at 1.1660. A bullish RSI divergence suggests that the sell-off might be losing steam.We can expect buying interest in this congestion area as the indicator climbs back into the neutrality area. 1.1790 is a key hurdle to clear before a meaningful bounce would happen.GER 40 rebounds from daily supportThe Dax 40 whipsaws due to the risk of contagion from Chinese real estate developer Evergrande defaulting.The tentative break of the daily support at 15050 has put leveraged buyers under stress. A combination of short-term profit-taking and buying-the-dips mentality has triggered a sharp rebound.15520 is the first resistance ahead, then the bulls will need to lift 15800 to make a turnaround. In the meantime, an overbought RSI may limit the V-shaped rally. 15020 is fresh support in case of a relapse.SPX 500 attempts reboundThe S&P 500 surges back as investors bet on the Fed’s patience for tapering.The index has found support above the psychological level of 4300. The close above the immediate resistance at 4405 may prompt sellers to cover, though the plunge below the daily support at 4360 has dented the bullish sentiment.As a deeply oversold RSI makes its way back up, patient buyers may wait for price action to stabilize first before staking in. 4310 is fresh support. On the upside, selling interests may gather around 4475.
Intraday Market Analysis – USD Tests Supply Area

Intraday Market Analysis – USD Tests Supply Area

John Benjamin John Benjamin 28.09.2021 08:45
EURUSD tests major supportThe US dollar found support from better-than-expected durable goods orders.The pair gave up all its gains from the rally in late August. This indicates an erosion in the bullish sentiment.The euro’s latest rebound has been capped by 1.1750. Sellers are pushing towards the critical floor at 1.1665. And its breach would lead to the last line of defense at 1.1600 from November last year.An oversold RSI may bring in some buying interest, though buyers will need to lift 1.1820 before they could hope for a bullish reversal.EURJPY seeks supportThe Japanese yen weakened after the BOJ warned of a recovery delay in its meeting minutes. The euro has capitalized on its rebound from the daily demand zone around 128.00.A close above 129.65 may have tipped the balance to the upside. A break above 130.10 would pave the way to the key resistance of 130.70 on the daily chart.However, a descending RSI from the overbought zone is in contrast with the price’s higher highs. There is a risk of a pullback as the momentum slows down. 129.40 is the immediate support.SPX 500 struggles to reboundThe S&P 500 halted its advance as the Fed’s taper is closing in.The V-shaped recovery has met selling interest at 4482, the origin of a recent sell-off. A diverging RSI suggests a loss of momentum in the rebound.The long side may regain confidence in case of a bullish breakout and 4540 would be the next target. Failing that, a drop below 4425 would prompt buyers to bail out, leaving the index vulnerable to a sharp fall.4340 would be the last support before a deeper correction drives the index to July’s lows near 4240.
Intraday Market Analysis – USD Awaits FOMC Catalyst

Intraday Market Analysis – USD Awaits FOMC Catalyst

John Benjamin John Benjamin 13.10.2021 09:04
GBPUSD tests supply areaThe pound climbs as solid payrolls support the Bank of England’s first post-pandemic interest rate hike.A series of higher highs have prompted sellers to cover their bets. The pair is now testing the supply zone around 1.3650, this was previously major support on the daily chart.Sentiment remains bearish judging by falling moving averages. Strong selling interest could be below 1.3750 as sellers wait to fade the rebound. 1.3550 is the immediate support and its breach would send the sterling back to 1.3420.EURUSD lacks supportThe US dollar consolidates gains as traders await the FOMC Minutes to confirm the tapering in November.The pair has sunk into bearish territory after it broke the daily support at 1.1620. The latest rebound has been capped by the fresh supply area around 1.1585. As the RSI recovered into the neutral zone, short-term trend followers may continue to sell into strength.The psychological level of 1.1500 would be the next target when the current consolidation ends. A deeper correction would drive price action to 1.1400.The UK 100 recovers to major resistanceThe FTSE 100 inched higher after Britain’s unemployment rate fell to 4.5%.The index has met strong buying interest over the key support (6830) on the daily chart. The triple bottom is an indication of the bulls’ commitment to maintaining the uptrend.A surge above 7085 has attracted more attention as the price swiftly recovered above the psychological tag of 7000 once again.A breakout above 7170 would signal a bullish continuation, triggering a runaway rally as those who are patiently waiting on the sidelines bid up.
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Intraday Market Analysis – USD Struggles For Support

Jing Ren Jing Ren 18.10.2021 12:08
EURUSD attempts a bullish breakout The US dollar retreated after retail sales fell below 1% in September. The euro’s rally above 1.1570 has led some short interests to close their positions. The pair is testing the key resistance at 1.1640, which coincides with the 20-day moving average and the first resistance on the daily chart. A bullish breakout could pave the way for recovery to 1.1750. However, buyers could be hesitant to commit after an overbought RSI caused profit-taking. In case of a pullback, 1.1540 is fresh support to keep the current rebound relevant. NZDUSD tests key resistance The New Zealand dollar rallies as Q3 inflation beats estimates. After a few days of sideways action, the indecision ended with a break above 0.7020, the origin of the last sell-off. In turn, this set the kiwi on a bullish course. Sellers would scramble to get out after their failed attempts to push lower. An overbought RSI may cause a temporary pullback. 0.7040 is the immediate support, then 0.6980 is the second line of defense in case of a deeper correction. A close above 0.7110 would lift the pair towards the previous peak at 0.7170. GER 40 heads towards major hurdle The Dax 40 bounces higher as the market bets on a prolonged low-interest environment. The major floor at 14800 has seen strong buying interest as traders bought the dip. A bullish close above 15200 has put the short side under pressure. Then a rally above the 30-day moving average indicates further commitment from the buy-side. The momentum could slow down momentarily as the RSI shows an overbought situation. 15300 would be the first support. A break above the daily resistance at 15700 may resume the uptrend.
Intraday Market Analysis – EUR Builds Up Bullish Reveal

Intraday Market Analysis – EUR Builds Up Bullish Reveal

John Benjamin John Benjamin 29.10.2021 08:55
EURUSD cuts through resistanceThe euro surges as the market prices in inflation pressure despite the ECB’s dovish message.Bullish candles have pushed the single currency above the triple top (1.1665) which sits on the 30-day moving average, paving the way for a reversal. Strong momentum is a sign of short-covering from those caught on the wrong side of the market.An overbought RSI could temporarily limit the range of the rally. However, renewed optimism may send the pair to the daily resistance at 1.1750. 1.1620 is the support in case of a pullback.USDJPY tests demand zoneThe Japanese yen recouped losses after the BOJ sees a weak yen as positive for Japan’s economy. And the US dollar has come under pressure near a four-year high.An overbought RSI on the daily chart points to an overextension. On the hourly level, the pair has found bids around 113.30 near a previous consolidation range.A bearish breakout would test the round number at 113.00, which lies on the 20-day moving average and is critical in safeguarding the uptrend. The bulls need to lift 114.30 before they may resume the rally.US 30 pulls backs for supportThe Dow Jones consolidates as investors digest earnings near the all-time high.A breakout above the August peak at 35600 and a bullish MA cross from the daily timeframe indicate an acceleration on the upside as the rally continues.Pullbacks could be an opportunity to buy low. An overbought RSI has triggered a minor sell-off below 35600, shaking out weaker hands in the process. A drop below 35450 would lead to the psychological level of 35000. 35830 is now a fresh resistance.
Intraday Market Analysis – EUR Builds Up Bullish Reveal - 29.10.2021

Intraday Market Analysis – EUR Builds Up Bullish Reveal - 29.10.2021

Jing Ren Jing Ren 29.10.2021 09:04
The euro surges as the market prices in inflation pressure despite the ECB’s dovish message. Bullish candles have pushed the single currency above the triple top (1.1665) which sits on the 30-day moving average, paving the way for a reversal. Strong momentum is a sign of short-covering from those caught on the wrong side of the market. An overbought RSI could temporarily limit the range of the rally. However, renewed optimism may send the pair to the daily resistance at 1.1750. 1.1620 is the support in case of a pullback. USDJPY tests demand zone The Japanese yen recouped losses after the BOJ sees a weak yen as positive for Japan’s economy. And the US dollar has come under pressure near a four-year high. An overbought RSI on the daily chart points to an overextension. On the hourly level, the pair has found bids around 113.30 near a previous consolidation range. A bearish breakout would test the round number at 113.00, which lies on the 20-day moving average and is critical in safeguarding the uptrend. The bulls need to lift 114.30 before they may resume the rally. US 30 pulls backs for support The Dow Jones consolidates as investors digest earnings near the all-time high. A breakout above the August peak at 35600 and a bullish MA cross from the daily timeframe indicate an acceleration on the upside as the rally continues. Pullbacks could be an opportunity to buy low. An overbought RSI has triggered a minor sell-off below 35600, shaking out weaker hands in the process. A drop below 35450 would lead to the psychological level of 35000. 35830 is now a fresh resistance.
Intraday Market Analysis – USD Struggles To Bounce Back

Intraday Market Analysis – USD Struggles To Bounce Back

John Benjamin John Benjamin 04.11.2021 08:38
EURUSD claws back lossesThe US dollar fell after the Federal Reserve called for patience on raising interest rates.The pair has met strong resistance at 1.1690, a previous demand zone on the daily chart that has turned into a supply one. The latest sell-off has been contained by 1.1535, near the base of the recent rebound as an oversold RSI attracted some bargain hunters.A surge above the intermediate resistance of 1.1620 would bring in more momentum traders. Then a break above 1.1690 could kickstart a bullish reversal in favor of the euro.XAUUSD tests resistanceGold recovers as the US dollar softens across the board following a neutral FOMC.Price action had previously struggled to clear the supply area around 1810, the origin of the September correction. The subsequent fall below the support at 1785 has prompted buyers to take profit.However, the RSI’s repeated oversold situation has caught buyers’ attention at the daily support at 1760. 1785 is the hurdle ahead and a bullish breakout would resume the recovery. Failing that, the bears may push towards 1740.USOIL falls back for supportWTI crude slipped after the EIA reported a larger increase in US inventories. The psychological level of 85.00 has been an effective hurdle so far.The previous fall below 81.00 has put the bulls on the defensive, especially after their failure to achieve a new high above 84.70. This is a confirmation that sentiment has grown cautious after the price’s recent vertical ascent.The RSI’s overbought situation on the daily chart could call for a pullback. 79.50 is the closest support. Its breach may send the price to 76.50.
Intraday Market Analysis – Euro Attempts To Bounce

Intraday Market Analysis – Euro Attempts To Bounce

John Benjamin John Benjamin 10.11.2021 08:58
EURUSD meets resistance The euro finds support from an upbeat economic sentiment from across the block. The pair has met buying interest in the demand zone around 1.1520. A bullish RSI divergence suggests that sellers may have taken their feet off the pedal. Subsequently, a break above 1.1560 prompted the short side to cover. 1.1615 is a key supply zone from last week’s sell-off, after which the bulls need to lift offers near 1.1690 before a reversal could gain traction. On the downside, a fall below 1.1550 may call the rebound into question. XAGUSD awaits breakout Bullions rise as the US dollar retreats ahead of the release of inflation data. A bullish MA cross on the daily chart is a sign that sentiment could be turning around. Silver is testing the September high of 24.80. A bullish breakout would trigger an extended rally towards 26.00. However, the RSI’s double top in the overbought area has held buyers back as the market awaits new catalysts. A combination of profit-taking and fresh selling could drive the price lower. The base of a previous breakout at 23.70 would be a support. US 500 seeks support The S&P 500 consolidates gains over strong corporate earnings and improved economic outlook. The divergence between the 20 and 30-day moving averages indicates an acceleration in the rally. Though there is a chance of a pullback after the RSI shot into the overbought area. The bullish bias means that buyers may be eager to jump in during a correction. The index is hovering above 4660. 4625 on the 20-day moving average would be the second line of defense. On the upside, a rebound would lead to 4750.
EURUSD well established so we keep trading them until prices breakout of the range.

EURUSD well established so we keep trading them until prices breakout of the range.

Jason Sen Jason Sen 10.11.2021 14:24
EURUSD levels are well established so we keep trading them until prices breakout of the range. We have shorts at first resistance at 1.1600/10 from yesterday USDCAD we have longs at 1.2440/20 targeting strong resistance at 1.2510/30. GBPCAD beat strong resistance at 1.6860/70 but meets a selling opportunity at 1.6930/50 with stops above 1.6970. Update daily at 06:30 GMT Today's Analysis. EURUSD strong resistance at 1.1600/10. Shorts need stops above 1.1630. A break higher can target strong resistance at 1.1695/1.1705. Exit longs & try shorts with stops above 1.1720. A break higher is a buy signal targeting 1.1765/70 & 1.1800/10. Shorts at 1.1600/10 target 1.1570/60 (hit), perhaps as far as first support at the October low at 1.1530/20. A break below 1.1510 is a sell signal initially targeting 1.1490 & although this could hold initially (a low for the day certainly possible but longs are risky) we eventually expected to target 1.1430/20. USDCAD longs at 1.2440/20 target strong resistance at 1.2510/30. Shorts need stops above 1.2550. First support at 1.2440/20 but longs need stops below 1.2410. A break below here targets 1.2370/65 perhaps as far as support at 1.2300/1.2280. Longs here need stops below 1.2270. A break lower is a sell signal. GBPCAD selling opportunity at 1.6930/50 with stops above 1.6970. A break higher however targets 1.7050/70. Shorts at 1.6930/50 target 1.6860, perhaps as far as 1.6810. A low for the day is possible here but further losses are likely to retest last week's low at 1.6735/25. GBPUSD beat 1.3510/30 to target 1.3570/80 & my selling opportunity at 1.3600/20. Shorts here worked perfectly with a high for the day at 1.3607 & a collapse to my target of 1.3525/15. In fact this was also the low for the day. EURGBP shorts at the 200 day moving average at 8585 work on the slide to second support at 8520/10 for profit taking on any remaining shorts. A low for the day exactly here so longs also worked on the bounce to 8550. GBPNZD shot higher to strong resistance at 1.9050/70 but shorts need stops above 1.9090 (which looks likely today's high as I write). Update daily at 07:00 GMT Today's Analysis. GBPUSD try shorts again at 1.3600/20 targeting 1.3560, perhaps as far as minor support at 1.3525/15. Below here look for 1.3470/60. A selling opportunity at 1.3600/20. Try shorts with stops above 1.3635. A break higher targets 1.3570/75. EURGBP holding below 8550 retests support at 8520/10. Try longs again with stops below 8500. A break lower targets 8475. Longs at 520/10 target 8550 before first resistance at the 200 day moving average at 8585/95. A break above 8600 is a buy signal for this week. GBPNZD shorts at strong resistance at 1.9050/70 target 1.9895, perhaps as far as 1.8950. A break above 1.9090 targets 1.9170/80. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
EURUSD shorts at first resistance at 1.1610/20 are working today

EURUSD shorts at first resistance at 1.1610/20 are working today

Jason Sen Jason Sen 03.11.2021 14:18
EURUSD shorts at first resistance at 1.1610/20 are working today USDCAD remains in a sideways range, good for scalping opportunities only as we hold first resistance again at 1.2420/40. Shorts stop above 1.2450. GBPCAD did not break lower but is holding around the low. Today's Analysis. EURUSD first resistance again at 1.1610/20. Shorts need stops above 1.1630. A break higher can target strong resistance at 1.1695/1.1705. Exit longs & try shorts with stops above 1.1720. A break higher is a buy signal targeting 1.1765/70 & 1.1800/10. Shorts at 1.1610/20 target 1.1580/75 (hit) perhaps as far as first support at the October low at 1.1530/20 today for profit taking. A break below 1.1510 is a sell signal initially targeting 1.1490 & although this could hold initially (a low for the day certainly possible but longs are risky) we eventually expected to target 1.1430/20. USDCAD first resistance again at 1.2420/40. Shorts stop above 1.2450. Be ready to buy a break above 1.2450 targeting 1.2510/30. Shorts at 1.2420/40 target 1.2370/65 (likely to pause here) then support at 1.2300/1.2280. Longs here need stops below 1.2270. A break lower is a sell signal. GBPCAD hits targets of 1.6950/40 & 1.6910/1.6890 for profit taking on shorts as finally we head for the target of 1.6870/60, perhaps as far as support at 1.6800/1.6780. First resistance at 1.680/90. Shorts need stops above 1.7010. We can try shorts again at 1.7050/70 but must stop above 1.7090. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Strategy sessions - How to trade EURUSD and the EUR crosses

Strategy sessions - How to trade EURUSD and the EUR crosses

Chris Weston Chris Weston 16.11.2021 16:30
The recent EURUSD move could be considered a classic case study for traders, across strategies, and notably for those who cut their craft on timeframes larger than 30 minutes. On one hand, the attraction to own USDs is almost too obvious and that worries me as a USD bull – we have inflation far higher than where the Fed has been forecasting only back in September and unemployment is also trending towards what the Fed considers ‘full employment’. We get the November CPI print on 11 December and that promises to be even hotter than the October print of 6.2% YoY. The Fed meet on 16 December, and in response we should get some punchy upward revisions to their forecasts on labour and inflation. Given the potential revisions on economic projections, it feels incredibly likely that the pace of QE tapering should subsequently accelerate - this sets up an earlier finish for asset purchases and ultimately opens the door to potentially start hiking from as early as May 2022. The Fed’s median projection for the fed funds rate (the dots) in 2022 is for one hike – it’s feasible to believe this lifts to two hikes next year. So, it's straightforward to take a constructive view on the USD, especially when you hear from former Fed officials Bill Dudley and Jeffery Lacker that they think the fed funds rate may need to move to 3% to control inflation. That would get the USD bulls excited, although 3% would probably be seen as a potential policy mistake by many. Year-to-date moves vs the USD Preview (Source: TradingView - Past performance is not indicative of future performance.) The market has some key event risks in its sight and are clearly running a progressively greater short EURUSD position into the Nov CPI print and FOMC meeting – and that has started now. We also have an important ECB meeting (also on the 16 December) and that too could be a volatility event – it promises to be a huge 24 hours for EURUSD and the EUR crosses! We can talk up the USD but looking across the FX universe this appears to be a EUR move, with our EUR spot basket (EURX on MT4/5) at the lowest levels since May 2020. Aside from the JPY, the EUR is the weakest G10 currency in 2021 – and is at the bottom of the pack on a 1-, 3- or 6- month basis – a true momentum play. EURUSD has been at the heart of the falls in our EUR basket and has been predictably well traded by clients. Maybe this is as simple as a central bank divergence play – with the ECB aggressively pushing back on expected rate hikes in 2022, hell-bent on the view that inflation is in fact ‘transitory’. While the Fed, on the other hand, are open-minded to hiking, if it's required, and the market certainly is adamant it will be in 2022 - and could soon be pricing 3 hikes in 2022. Trading diverging monetary policy paths is perhaps the most simplistic form of tactical trading, in essence, it's FX trading 101, and it's working and we’re all witnessing the trend lower. We’re seeing a similar theme play out in EURCAD and EURNZD, and EURCAD is especially interesting as the cross has broken its consolidation range and if we see a hot Canadian CPI print (Thursday 00:00 AEDT) then the market will expect a rate hike in January by the BoC. Diverging monetary policy expectation’s part explains the move in EURCHF, but it clearly doesn’t explain the one-way move in EURJPY from 133.50 to sub-130. As we explain here EURCHF should be on all FX traders’ radars. So the market is clearly happy to sell EURs and the order books at banks would have become quite one-sided. Trend-followers and momentum-based funds, many of them systematic, would have been all over this move lower adding to shorts as price broke level after level. And, while EURUSD implied or realised volatility hasn’t picked up markedly, the rallies from 1.2260 (in May) have been corrective in nature and short-lived Preview (Source: TradingView - Past performance is not indicative of future performance.) The question I'm asking now and noting that US non-farm payrolls, CPI and FOMC meetings are still some way off, is how to best trade the EURUSD in the near term. That's of course determined by strategy – in this case, mean reversion or momentum. To buy EURUSD as a mean reversion play – personally, I feel the counter rallies should be limited so would change to an ultra-short-term moving average (such as the 5-day EMA) over a traditional 20-day MA Leave limit orders to sell into the former downtrend at 1.1415, or take the timeframe in and see the reaction, price action and behaviour into the former trend before initiating shorts Or, just to stay short as a pure momentum trade and have a stop above 1.1464. One way moves and mature trends eventually come to an end, notably when positioning becomes too extreme – over loved consensus trades rarely end well if you’re the last one in. However, while the street is clearly short of EURs, the fundamentals justify this and if heat come out of the move, then it should offer a renewed chance to short as we head into a huge December for FX traders.  That’s how I see it as we head towards a wild December of major event risk.
Intraday Market Analysis – USD Pushes Higher

Intraday Market Analysis – USD Pushes Higher

John Benjamin John Benjamin 17.11.2021 09:08
EURUSD lacks support The US dollar inched higher after October’s retail sales beat expectations. There has been a lack of interest in the single currency following its fall below the daily support at 1.1530. The divergence between the 20 and 30-hour moving averages indicates an acceleration in the sell-off. The bears are targeting the demand zone around 1.1200 from last July. The RSI’s oversold situation may prompt momentum traders to cover. Though a rebound is likely to be capped by 1.1370 and sellers would be eager to sell into strength. GBPJPY attempts to rebound The sterling recouped losses after Britain’s unemployment rate dropped to 4.3%. On the daily chart, the pair saw support near the 61.8% (152.60) Fibonacci retracement of the October rally. A bullish RSI divergence was a sign that the bearish pressure was fading. A break above 153.60 could be an attempt to turn the mood around. The initial surge may need more support after the RSI shot into the overbought area. Should the pound stay above 152.35-152.60, a rebound would lift it towards 155.20. NAS 100 tests peak The Nasdaq 100 bounces back supported by robust tech earnings. The index showed exhaustion after a four-week-long bull run. A combination of an overbought RSI and its bearish divergence made traders cautious in buying into high valuations. A break below the psychological level of 16000 has triggered a wave of profit-taking. A deeper retreat below 16020 would send the index to the previous peak at 15700 which coincides with the 30-day moving average. On the upside, A rally above 16400 would resume the uptrend.
Market Quick Take - November 19, 2021

Market Quick Take - November 19, 2021

Saxo Bank Saxo Bank 19.11.2021 10:43
Summary:  Equity markets charged higher in the US session to close at new record highs, and the upside extended further in the futures market overnight. In FX, the recent USD strength eased slightly, while oil prices are creeping back higher despite the recent fears of strategic reserve releases. Markets are nervously awaiting the announcement of who US President Biden will nominate to head the Fed after the current Powell term ends in February. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - US equities pushed to new all-time highs yesterday led by technology stocks and strong macro figures across manufacturing surveys and job market data such as jobless claims. Nasdaq 100 futures are trading around the 16,560 level in early European trading with the 16,500 being the intraday day support level. A recent survey among institutional investors shows that a majority is believing in the transitory inflation narrative which can help explain why investors in equities are looking through the latest inflation pressures. EURUSD and EURGBP – the beleaguered euro finally bounced back a bit after its recent remarkable slide, although it is tough to see what could engineer a reversal of the move below the 1.1500 level, which is the key chart resistance now, although Biden announcing Brainard as his pick to head the Fed next February could drive considerable short-term volatility. To stop the euro from a persistent slide, we would need a very different tone from the ECB than it has delivered recently, with no real opportunity to do so until the December 16 ECB meeting. With power prices and a new Covid wave weighing on the outlook, the ECB will very likely be happy to stay firmly dovish. USDJPY – the highs for the cycle near the psychologically important 115.00 look safe as long as US treasury yields at the longer end of the curve remain rangebound, but trading above that level could get volatile if it is broken, as some options structures may be linked to its breaking or not breaking. The next test for the price action is clearly the Fed Chair nomination that appears imminent – possibly today or over the weekend (more below in What are we watching next?). Gold (XAUUSD) has spent the week trading within a relatively narrow range between $1850 and $1870 as it awaits a fresh catalyst following last week’s breakout. The impressive rally that occurred despite headwind from a stronger dollar has stalled with bond yields picking up and the market wondering how the US Federal Reserve will manage the current inflation spike. Silver and especially platinum have both struggled to keep up with gold while ETF investors have yet to show any interest in accumulating exposure. All developments raising the risk of a retracement towards the $1830-35 key area of support. Crude oil (OILUKJAN22 & OILUSDEC21) managed to recover yesterday after the market brushed aside the potential negative price impact of a US SPR release. US attempts to attract wider support from other major importing countries seems to have fallen flat, except for China who is “working” on a release. Having dropped more than five dollars since speculation began, the market has concluded for now that the price impact of a release could be limited. The market, however, may still have to deal with the recent updates from EIA and IEA, in which they both forecast current tight market conditions could start to ease early next year as well as renewed Covid-related reductions in mobility. US Treasuries (IEF, TLT). Yesterday’s 10-year US TIPS auction stopped through, pricing at a record low yield at -1.145%. It is a signal that investors are ever more concerned about inflation risk.  The Treasury also sold 4-week and 8-week T-Bills. While the latter was priced in line with the Reverse Repurchase facility, 4-week T-Bills priced with a yield of 0.11%, more than double the RRP rate. As we approach the day in which the Treasury will run out of cash, we expect volatility in the money market to increase, while long-term yields will remain compressed as they will serve as a safe haven. In the meantime, the move index continues to rise indicating that the bond market remains on the hedge. What is going on? Central Bank of Turkey cut another 100 basis points from the policy rate, lira plunge extends. The Turkish lira has lost more than 10% versus the US dollar this week and trades well over 11.00 after Turkish President Erdogan earlier this week declared himself once again against high interest rates, which he believes cause inflation. Central bank chief Kavcioglu, who is seen as doing Erdogan’s bidding, cut rates for a third time by 1.0% to take the policy rate to 15%, but with the Turkish lira losing over 10% this week alone and more than 30% since Erdogan fired the prior more hawkish central bank head in favour of Kavcioglu, inflation will run far beyond the rate. Not even some guidance that the easing cycle may conclude in December was enough to halt the lira’s slide. US Nov. Philly Fed survey hits 39.0, a very hot reading and fourth highest ever - with Prices Paid at 80 and just missing the 42-year high of 80.7 in June, although the Prices Received was at 62.9, the highest since 1974. Special survey questions in the Novemer  survey included one on inflation expectations, with firms expecting a median 5.3% increase in their own prices, and an increase in wages of 4.8%. The median forecast for 10-year inflation was 3.5%, up from the 3.0% the last time the question was asked in August. The Bloomberg Agriculture Index hit a fresh five-year high this week with food prices likely to stay high in 2022 with labor shortages, La Ninã weather impacts, surging cost of fertilizers being the common denominator across the sector. Recent gains being led by coffee, which we highlighted earlier in the week as a commodity currently seeing multiple price supportive developments. Wheat is heading for a nine-year high in Chicago while hitting record highs in Europe with inventories tumbling amid strong demand from importers and now also a rain threat to the soon-to-be harvested Australian crop. Soybeans have seen a strong bounce after the latest WASDE report showed a tighter than expected outlook for the coming year, and following a recent rush of Chinese buying from the US and South America. Apple doubles down on self-driving cars. The company is aiming to develop fully autonomous driving capabilities for cars by 2025 under the project name Titan. Apple has developed its own chip and is aiming to soon have a car on the roads for testing. However, delivering self-driving cars is a difficult endeavor with Uber Technologies having sold its unit and Waymo (Google’s unit) has been struck by fatigue and key people leaving the project. Tesla is also still struggling to deliver self-driving cars. What are we watching next? Who will US President Biden nominate to head the Fed next February? Powell is still seen as more likely to get the nod that Brainard by roughly two to one, and this Fed Chair nomination issue is hanging over the markets, as the current Fed chair term ends in early February and from comments made earlier this week, an announcement could be made any day now. One uncertainty that would come with a Brainard nomination is the potential difficulty of having her nomination approved by the Senate. The nomination news could generate significant short-term volatility on the choice of the nominally more dovish Lael Brainard over current Fed Chair Powell, though we see little difference in the medium-longer term implications for monetary policy, and the Fed is likely to get a prominent new regulatory role either way (under Brainard or someone else if she is nominated to replace Powell). Vote on $1.7 trillion US fiscal bill today in the House of Representatives after the Congressional Budget office said the bill, which focuses on social spending and climate initiatives, would add some $367 billion to the US Federal deficit (around 1.5% of current US nominal GDP) over the next 10 years. Earnings Watch – there are no important earnings today and this earnings week has been good in the US and Europe, while a bit more mixed among Chinese companies. The list below shows earnings releases next week. Monday: Sino Pharmaceutical, Prosus, Zoom Video, Agilent TechnologiesTuesday: Xiaomi, Kuaishou Technology, Compass Group, Medtronic, Analog Devices, Autodesk, VMWare, Dell Technologies, XPeng, HP, Best Buy, Dollar TreeWednesday: DeereThursday: AdevintaFriday: Meituan, Pinduoduo Economic calendar highlights for today (times GMT) 0830 – ECB President Lagarde to speak1200 – UK Bank of England Chief Economist Huw Pill to speak1330 – Canada Sep. Retail Sales1715 – US Fed Vice Chair Clarida to speak on global monetary policy coordination Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher
Global Markets In Times Of Affection Of Situation In Eastern Europe

On the radar this week...

Chris Weston Chris Weston 22.11.2021 08:18
Powell vs Brainard Fed chair nomination  Covid trends and restrictions in Europe US core PCE inflation (Thursday at 2 am AEDT) RBNZ and Riksbank central bank meeting US cash markets shut Thursday for Thanksgiving (Pepperstone US equity indices still open)  Eurozone PMI (Tuesday 20:00aedt) – ECB speakers in play BoE speakers to drive the GBP – will they cast doubt on a December hike? With Covid risks on the rise in Europe and ultimately restrictions being implemented we’ve seen renewed selling interest in the EUR, and the oil-exporting currencies (NOK, CAD, MXN). Certainly, the NOK was the weakest G10 currency last week, and GBPNOK has been a great long position – a pair to trade this week, but consider it is up for 9 straight days and has appreciated 5.2% since late October.  I questioned last week if the divergence in EURCHF plays out, and the break of 1.05 negates that, suggesting staying short this cross for now as the CHF is still a preferred safe-haven.  EURUSD has been in free-fall EURUSD has been in free-fall and will likely get the lion’s share of attention from clients looking for a play on growing restrictions and tensions across Europe. The pair has lost 3.5% since rejecting the 50-day MA on 28 Oct and has consistently been printing lower lows since May – predominantly driven by central bank divergence and a growing premium of 2-year US Treasuries over German 2yr - with the spread blowing out from 78bp to 128bp, in favour of USD. For momentum, trend followers and tactical traders, short EUR remains attractive here.  It will be interesting to see if we see any pickup in shorting activity in EU equities – notably the GER40, with the German govt warning of lockdowns ahead. A market at all-time highs (like the GER40) is a tough one to short, but if this starts to roll over then I’d go along for a day trade. There is a raft of ECB speakers also to focus on, notably with President Lagarde due to speak on Friday.  Playing restrictions through crude While we can play crude moves in the FX, equity and ETF space, outright shorts in crude have been looking compelling. Although we see SpotCrude now sitting on huge horizontal support and a break here brings in the 50-day MA. Of course, as oil and gasoline fall, the prospect of a release of the SPR (Strategic Petroleum Reserves) diminishes, however, the Biden administration could use this move lower move to their advantage and capitalize to keep the pressure on.  (SpotCrude daily) A rise in restrictions also means market neutral strategies (long/short) should continue to work, and long tech/short energy has been popular. We can express this in our ETF complex, with the XOP ETF (oil and gas explorers) -8.1% last week and that works as a high beta short leg. Long IUSG (growth) or the QQQ ETF against this would be a good proxy on the opposing leg. In fact, looking at the moves in Apple, Nvidia, Alphabet and Amazon, and we can see these ‘safe haven’ stocks are working well again, as is Tesla although for different reasons.  Stocks for the trend-followers For the ‘buy strong’ crowd, I have scanned our equity universe for names above both their 5- and 20-day MA AND at 52-week highs. Pull up a daily chart of any of these names - they should nearly always start at the bottom left, and end top right. Playing the RBNZ meeting tactically By way of event risks, the RBNZ meeting (Wed 12:00 AEDT) is one of the more interesting events to focus on. Will the RBNZ raise by 25bp or 50bp? That is the question, and of 19 calls from economists (surveyed by Bloomberg) we see 17 calling for a 25bp hike – yet the markets are fully pricing not just a 25bp hike but a 43% chance of 50bp – from a very simplistic perceptive if the RBNZ hike by ‘just’ 25bp, choosing a path of least regret, then we could see a quick 25- to 30-pip move lower in the NZD. The focus then turns to the outlook and whether the 8 further hikes priced over the coming 12 months seems to be one shared by the RBNZ.  Traders have been keen to play NZD strength via AUD, as it is more a relative play and doesn’t carry the risk on/off vibe, which you get with the USD and JPY. I’d be using strength in AUDNZD as an opportunity to initiate shorts, especially with views that RBNZ Gov Orr could talk up the possibility of inter-meeting rate hikes.  GBP to be guided by the BoE Chief The GBP is always a play clients gravitate to, with GBPUSD and EURGBP always two of the most actively traded instruments in our universe. A 15bp hike is priced for the 16 Dec BoE meeting after last week’s UK employment and inflation data, but consider we also get UK PMI data (Tuesday 20:30 AEDT), and arguably, more importantly, speeches from BoE Governor Bailey and chief economist Huw Pill – perhaps this time around expectations of hikes can be better guided – although, a bit of uncertainty into central bank meetings is very pre-2008 and makes things a little spicy/interesting.  (BoE speakers this week) GBPUSD 1-week implied volatility is hardly screaming movement, and at 6.5% sits at the 10th percentile of its 12-month range. The implied move is close to 130pips, so the range at this juncture (with a 68.2% level of confidence), although I multiple this by 0.8 to get closer to the options breakeven rate. So at this stage, 100 pips (higher or lower) is the sort of move the street is looking for over the coming five days, putting a range of 1.3557 to 1.3349 in play – one for the mean reversion players. Personally, I would let it run a bit as that volatility seems a little low, and a break of 1.3400 could see volatility pick up. I’d certainly be looking for downside if that gave way.  Happy trading.
FX Update: USD kneejerks higher as Powell gets nod for second term

FX Update: USD kneejerks higher as Powell gets nod for second term

John Hardy John Hardy 23.11.2021 17:08
Summary:  US President Biden will tap Jay Powell for a second term as Fed Chair and will nominate Lael Brainard to be promoted to Vice Chair of the Fed, a move that sent the USD modestly higher and US yields sharply higher, though some of the reaction may have been on pent-up reaction to prior developments. Elsewhere, the descent in the Turkish lira is turning dire, while the kiwi is weaker ahead of an RBNZ meeting tonight. FX Trading focus: USD follows US yields higher in the wake of Powell getting nod for 2nd term Surprising a sizable minority and perhaps myself to a degree, US President Biden will tap Jay Powell for a second term as Fed Chair, while seeking to promote Lael Brainard from her current position to Vice Chair. The most prominent reason given for not going with Brainard is that her confirmation process may have proven contentious, something Biden wanted to avoid, and given extensive Democratic party support for Powell, the progressive wing aside, it was always the “easy option”. Brainard will still have to go through a confirmation process with the Senate. More interesting is the Brainard was not nominated to Vice Chair in the banking supervision and regulation role that the soon-gone Quarles occupied, a role that many envisioned for her. Biden has more nominees to consider for Quarles’ replacement and other empty spots, but continuity appears assured, though a Vice Chair Brainard will carry more weight when she dissents on non-monetary policy issues in the future (she never dissented on FOMC votes but has dissented more than 20 times on board votes linked to loosening regulation on US financial institutions). Other positions at the Fed will need filling as well, including the replacement of Quarles as banking supervisor. The market reaction to the news was fairly straightforward and “as expected” algorithmically, i.e., Brainard was supposed to be the more dovish pick, so Biden going with Powell saw the USD stronger as the market priced in about 10 basis points more in the way of Fed hikes through the end of next year. It’s tough to tell whether some of the reaction was the market simply adjusting to have this important issue “out of the way” allowing traders to price in other recent developments, like hot US data and Fed Vice Chair Clarida’s comments on possibly speeding up the pace of the Fed’s taper of asset purchases at the December FOMC meeting. The next test for whether this USD move can extend will be with tomorrow’s October PCE Inflation print and the FOMC minutes. For USDJPY, as I argue below, an extension higher  likely needs more upside from longer US yields. US President Biden will speak today on the economy and “lowering prices for the American people” which many believe will include a release of crude oil from US strategic reserves. That’s a risky move if it fails. Chart: USDJPYUSDJPY spilled over the 115.00 barrier in the wake of Powell getting the nod for a second term, with  the move now trying to decide whether it can stick. Arguably, the rise in Fed policy expectations don’t mean much if the longer end of the US yield curve remains anchored as it has lately, which continues to suggest that the market sees inflation as transitory and/or that Fed potential on rates will max out around 2.0% and crush the growth and inflation outlook. While 10-year US yields were sharply higher yesterday, they’re still bogged down in the range since the pivot high of 1.70% in October and the cycle high near 1.75% all the way back at the end of March. The logjam needs to break there and send US long yields higher for better fundamental support for a significant break above the 115.00 level in USDJPY. European politics in the spotlight – with Germany dealing with a new Covid ave and the ongoing natural gas and power crunch, it is time for the government coalition to announce itself and begin ruling. An announcement of the “stoplight” coalition could be imminent and we’ll have to watch the awkward combination closely, particularly the LDP Lindner’s attitude toward spending as the traditionally liberal party’s supply side principles are at odds with its Social Democratic and Green coalition partners inclinations, although energy emergencies are not political, but must be dealt with.  Elsewhere, Italian president Mattarella announced he will be stepping down. If, as some believe, an effort is made to replace his mostly ceremonial role with Mario Draghi, elections would have to be held. And the French election season will only heat up from here, where we watch whether Macron can keep the populists Zemmour and Le Pen at bay.  The Euro is getting very cheap – bigger fiscal, an ECB reverse repo facility, and a non-Covid constrained outlook by spring could have EURUSD in a very different place by then. Antipodean action- the Aussie has risen sharply versus the kiwi (NZD) over the last couple of sessions as the news flow for the  Aussie has improved notably, with China’s central bank possibly signaling it is ready to bring stimulus, some of the news flow in the property sector improving, and especially as iron ore prices have jumped sharply, particularly overnight, on all of the above plus anticipation that China will have to increase steel output soon. The Reserve Bank of New Zealand was one of the quickest central banks to turn hawkish over the summer and abandon QE and was only delayed slightly in hiking rates by New Zealand’s first Covid outbreak in many months over the summer. The central bank chief Adrian Orr has made it clear that the bank is on the path or many more rate hikes to come and the market has priced in a policy rate of 1.50% by the April meeting of next year versus the current 0.50%. Most believe that the central bank will only hike 25 bps tonight but a significant minority believe that the bank will hike 50 bps. As important will be the market mood (if risk sentiment is weak on further US yield rises, for example, the impact of any RBNZ move may be muted) and whether guidance is able to meet lofty expectations for further tightening. The NZ 2-year yield has traded flat at elevated levels since late October, while NZDUSD has declined, arguably on the fresh momentum in Fed expectations, so moving the needle may require that the RBNZ deliver a 50 basis point hike and even more hawkish guidance. Turkish lira move getting downright disorderly – Turkish President was out yesterday complimenting the recent Turkish Central Bank chief’s decision to cut rates another 100 basis points and declaring that the Turkish government would concentrate on policies that encourage economic growth. In rather dire language, he drew parallels between the current situation and the struggle to form the modern Turkish state in 1923 in the wake of World War I. As of this writing, USDTRY traded near 12.50 after starting last week near 10.00, a breathtaking move. Much more of this kind of price action, and the risk of hyperinflation will swing into view. Table: FX Board of G10 and CNH trend evolution and strengthThe most important trend shift was yesterday’s huge dump in precious metals – look at the momentum scores for the last 2- and 5 days. Otherwise, most trends of late are extending with the exception of the badly fading NZD. Table: FX Board Trend Scoreboard for individual pairsThe precious metals in for a rough ride on the USD- and US yield move in the wake of the Fed Chair nomination move yesterday. Elsewhere, getting some hefty trend readings in USD/SEK and UDS/NOK, which remain high beta to Euro weakness. Upcoming Economic Calendar Highlights (all times GMT) 1445 – US Nov. Flash Markit Manufacturing and Services PMI 1500 – UK BoE Governor Bailey at House of Lords 1500 – US Nov. Richmond Fed Manufacturing 1730 – ECB's Makhlouf to speak 1800 – Canada Bank of Canada’s Beaudry to speak 2130 – API’s Weekly Petroleum Stock Report 0030 – Japan Nov. Flash Manufacturing and Services PMI 0100 – New Zealand RBNZ Official Cash Rate Announcement
Intraday Market Analysis – EUR Stays Under Pressure

Intraday Market Analysis – EUR Stays Under Pressure

John Benjamin John Benjamin 24.11.2021 09:15
EURUSD struggles to rebound The euro bounced back after PMI readings in the eurozone exceeded expectations. The pair is testing July 2020’s lows around 1.1200. The RSI’s oversold situation on the daily chart may limit the downward pressure for now. We can expect a ‘buying-the-dips’ crowd as price action stabilizes. Sentiment remains fragile though and sellers may fade the next rebound. The bulls will need to lift 1.1360 before a reversal could take shape. Failing that, a bearish breakout would trigger a new round of sell-off towards 1.1100. NZDUSD lacks support The New Zealand dollar softened after the RBNZ met market expectations and raised its cash rate by 25bps. The downward pressure has increased after 0.6980 failed to contain the sell-off. The pair has given up all gains from the October rally, suggesting a lack of interest in bidding up the kiwi. An oversold RSI caused a rebound as short-term traders took profit and the bears were swift in selling into strength. The directional bias remains bearish unless 0.7010 is cleared. The September low at 0.6860 is the next support. UKOIL bounces back Brent crude recovers on speculation that OPEC+ may lower production to counter a release of strategic reserves. A break below 79.30 has shaken out the weak hands. The price has met buying interest over the daily demand zone around 77.70, which coincides with last July’s peak. A surge above 82.00 puts the bears on the defensive. Short-covering would exacerbate short-term volatility. An overbought RSI may cause a brief pullback. Then 85.50 is a key hurdle before the uptrend could resume.
Market Quick Take - November 22, 2021

Market Quick Take - November 22, 2021

Saxo Bank Saxo Bank 22.11.2021 10:04
Summary:  Equity markets closed last week somewhat mixed, but the Asian session was mostly strong on indications that the Chinese PBOC is shifting its attitude on monetary policy toward easing. Elsewhere, the difficult wait for the Fed Chair nomination news continues this week ahead of the US Thanksgiving holiday on Thursday. Crude oil bounced after finding support overnight, but the risk of SPR release and Covid demand worries still linger. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - a new week following a new all-time high in US equities on the close on Friday, which is starting with Nasdaq 100 futures opening up higher trading around the 16,610 level in early European trading. Last week showed that investors and traders are utilizing the Covid-19 lockdown playbook selling off physical companies while buying online companies that are better equipped to navigate new lockdowns in Europe. With the US 10-year yield remaining in a range around the 1.55% there is nothing from preventing equities from extending recent gains. EURUSD and EURGBP – new Covid restrictions across Europe, which has become the center of the latest Covid wave, have crimped sentiment for the euro, as has the still very elevated power and natural gas prices. EURUSD has traded back down toward the lows of the cycle near 1.1265 overnight, with the next psychological magnet lower likely the 1.1000 area as long as the big 1.1500 break level continues to provide resistance. In EURGBP, last week saw the break of the prior major pivot low near 0.8400, with the next objective the post-Brexit vote low near 0.8275. USDJPY – threatened support on Friday on a spike lower in long US treasury, but a reversal of much of that action by this morning in late Asian trading is likewise seeing USDJPY trying to recover back into the higher range, with a focus on the recent top just short of 115.00. We likely need for long US treasury yields to sustain a move higher to support a major foray above this huge 114.5-115.00 chart area, which has topped the market action since early 2017. Meanwhile, if risk sentiment worsens further in EM and darkens the outlook for JPY carry trades there, while US treasuries remains rangebound or head lower, the JPY could squeeze higher as the speculative interest is tilted heavily short. Gold (XAUUSD) extended Friday’s drop below $1850 overnight, before bouncing ahead of key support in the $1830-35 area. The risk of a quicker withdrawal of Fed stimulus supporting real yields and the dollar has for now reduced gold's ability to build on the technical breakout. However, the price softness on Friday helped attract ETF buying with Bloomberg reporting a 10 tons increase, the biggest one-day jump since January 15. Gold’s biggest short-term threat remains the tripling of futures long held by funds during the past seven weeks to a 14-month. Most of that buying being technical driven with the risk of long liquidation now looming on a break below the mentioned support level.   Crude oil (OILUKJAN22 & OILUSDEC21) opened softer in Asia after Friday’s big drop but has so far managed to find support at $77.85, the previous top from July. The market focus has during the past few weeks shifted from the current tight supply to the risk of a coordinated reserve release, a renewed Covid-driven slowdown in demand and recent oil market reports from the EIA and IEA pointing to a balanced market in early 2022. Speculators who for the last six weeks have been net sellers of crude oil futures cut their combined WTI and Brent long to a three-month low in the week to November 16. Focus on SPR and Covid risks this week US treasuries (SHY, IEF, TLT). Government bond yields worldwide dropped as new lockdown measures were imposed in Austria on Friday. Ten-year yields tumbled to 1.55%, and they are likely to continue to trade range-bound as the debt ceiling issue will continue to compress long-term yields as volatility peaks in money markets. Investors will focus on this week’s PCE index, FOMC minutes and any news regarding a change of leadership of the Federal Reserve. If Brainard is appointed as Fed chair, the market will expect low rates for longer, thus inflation expectations will advance putting upward pressure on yields. Thus, it is unavoidable to continue to see the 5s30s continue to flatten. German Bunds (IS0L). We expect European sovereigns, in general, to continue to benefit from news related to a surge of Covid cases and lack of collateral as the year ends. Yet, the perception of inflation is changing among ECB members with Isabel Schnabel last week saying that the central bank will need to be ready to act if inflation proves more durable. Therefore, as we enter in the new year, and collateral shortages will be eased, we anticipate spreads to resume their widening. What is going on? Fed Vice Chair Clarida suggests faster Fed taper - in comments on Friday, suggesting that the December FOMC meeting could speed the pace at which the Fed will reduce its asset purchases. “I’ll be looking closely at the data that we get between now and the December meeting...It may well be appropriate at that meeting to have a discussion about increasing the pace at which we are reducing our asset purchases.” China’s central bank signals that it may ease policy. In a monetary policy report from Friday, the PBOC dropped language from prior reports, including phrase suggesting that the bank will maintain “normal monetary policy” and a promise not to “flood the economy with stimulus”. This comes in the wake of considerable disruption in the property sector as the government cracks down on an overleveraged property sector. Asian equities were mostly higher on the news, especially in Korea, although the Hang Seng index was slightly in the red as of this writing. Ericsson to acquire cloud provider Vonage in $6.2bn deal. This pushes the Swedish telecommunication company into the cloud communication industry seeking to add more growth to the overall business. Vonage has delivered 11% revenue growth in the past 12 months hitting $1.4bn with an operating margin of 10.4%. Global proceeds from IPOs hit $600bn in record year. This is the biggest amount since 2007 and almost 200% above the level in 2019 highlighting the excessive risk sentiment in equities. More confusing signals from Bank of England. Governor Bailey said in an interview for the Sunday Times that risks to the country are “two-sided” at the moment as growth slows and inflation rises, and that the cause of inflation problems is supply side constraints and that “monetary policy isn’t going to solve those directly.” Similarly, BoE Chief Economist Huw Pill said on Friday that the Bank of England said that the weight of evidence was shifting in favour of rate hikes but that he has not yet made a decision, encouraging observers to focus on the longer term rather than meeting-to-meeting decision. US shared intelligence with allies suggesting potential for Russia to invade Ukraine - according to Bloomberg sources. The intelligence noted up to 100,000 soldiers could be deployed in such a scenario, and that some half of that number are already in position.  Russian president Vladimir Putin denied Russia intends to invade, but seemed to pat himself on the back for “having gotten the attention of the US and is allies, which he accused of failing to take Russia’s ‘red lines’ over Ukraine seriously”, as the article puts it. What are we watching next? Who will US President Biden nominate to head the Fed next February? Powell is still seen as more likely to get the nod that Brainard by roughly two to one, and this Fed Chair nomination issue is hanging over the markets, as the current Fed chair term ends in early February and from comments made last week by President Biden, an announcement could come any day. One uncertainty that would come with a Brainard nomination is the potential difficulty of having her nomination approved by the Senate. The nomination news could generate significant short-term volatility on the choice of the nominally more dovish Lael Brainard over current Fed Chair Powell, though we see little difference in the medium-longer term implications for monetary policy, and the Fed is likely to get a prominent new regulatory role either way (under Brainard or someone else if she is nominated to replace Powell). Will Germany announce a Covid lockdown? - Friday saw some volatility on Austria’s announcement of a full Covid lockdown, with Germany’s health minister saying that a similar move in Germany could not be ruled out. Later that day, that was contradicted by comments from another minister. Meanwhile, resistance against Covid restrictions has turned violent in Netherlands. Earnings Watch – the number of important earnings is falling rapidly, but this week Tuesday is the most important day with key earnings from Xiaomi, XPeng and Kuaishou, both important Chinese technology companies. Also on Tuesday, US companies such as Medtronic, Autodesk and Dell Technologies are worth watching. Monday: Sino Pharmaceutical, Prosus, Zoom Video, Agilent Technologies Tuesday: Xiaomi, Kuaishou Technology, Compass Group, Medtronic, Analog Devices, Autodesk, VMWare, Dell Technologies, XPeng, HP, Best Buy, Dollar Tree Wednesday: Deere, Thursday: Adevinta Friday: Meituan, Pinduoduo Economic calendar highlights for today (times GMT) 0900 - Switzerland SNB weekly sight deposit data1330 – US Chicago Fed Oct. National Activity Index1500 – US Oct. Existing Home Sales1730 – ECB's Guindos to speak2145 – New Zealand Q3 Retail Sales2200 – Australia Nov. Flash Services & Manufacturing PMI0105 – Australia RBA’s Kohler to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher
FX Update: USD remains firm, RBNZ taps brakes on expectations

FX Update: USD remains firm, RBNZ taps brakes on expectations

John Hardy John Hardy 24.11.2021 13:44
Summary:  The US dollar remains firm after the news of Fed Chair Powell getting the nod for a second term on Monday, but a more aggressive extension of its recent strength is avoided as US yield rises were tempered yesterday. Elsewhere, a less hawkish than expected RBNZ saw the kiwi sharply weaker as the market removed a chunky bit of forward rate hike expectation on the latest guidance. FX Trading focus: USD follows US yields higher in the wake of Powell getting nod for 2nd term The US dollar strengthening in the wake of President Biden’s announcement that he would tap Jay Powell for a second term as Fed Chair extended modestly yesterday and into this morning, somewhat tempered by a strong US 7-year treasury auction taking the steam out rises in yields yesterday – with the 7-year benchmark actually notching new highs for the cycle before retreating in the wake of the auction. The more widely tracked 10-year US treasury yield benchmark is still rangebound below the October pivot high of 1.7% and the post-pandemic outbreak high of 1.75%  from the end of March. This has kept USDJPY from extending notably above the sticky 115.00 area of the moment. Elsewhere, the euro remains relatively weak despite ECB Vice President de Guindos out speaking and hinting some concern on inflation rises: “the ECB is continuously pointingout that the inflation rebound is of a transitory nature....However, we have also seen how in recent months these supply factors are becoming more structural, more permanent.” But just this morning we also have the ECB’s Holzmann out saying that inflation is likely to slow from next year. Later today we will get the expected German government coalition deal (SPD’s Scholz as Chancellor with Green’s Baerbock reportedly set for the foreign minister post and importantly, the liberal LDP’s Lindner set to lead the finance ministry), with a press conference set for 3 p.m. EURJPY and EURUSD are heavy this morning and note that  the 128.00 level in EURJPY is a well-defined range low, while EURUSD doesn’t have notable  support until well below 1.1200 and arguably not until psychological levels like 1.10. With covid spiking and a galloping energy crisis, I don’t envy the new German leadership. Overnight, the Reserve Bank of New Zealand waxed a bit more cautious than was expected by the market, and not only by raising the rates 25 basis points rather than the 50 basis points that a minority were expecting to see. In the central bank’s new statement, the bank strikes a more cautious tone: yes, clearly further rate hikes are set for coming meetings, but the bank is clearly in a wait and see mode, given the tightening of financial conditions already in the bag and that which the market has already priced in: “the Committee expressed uncertainty about the resilience of consumer spending and business investment....(and) also noted that increases in interest rates to householdsandbusinesses had already tightened monetary conditions. High levels of household debt, and a large share of fixed-rate mortgages re-pricing in coming months, could increase the sensitivity of consumer spending to these interest rate increases.” Later today, we have a stack of US data releases crammed into today because of the Thanksgiving holiday tomorrow (and for most, Friday as well). The most important of these is the October PCE Infation data print. Not expecting much from the FOMC minutes later as all eyes are on whether we are set for an acceleration of the QE taper at the December FOMC meeting, with some arguing that Powell and company have more room to move and administer a bit more hawkish message, if they so desire, as the nomination news is out of the way and this reduces hyper-sensitivity to bringing any message that could risk cratering market sentiment. Chart: AUDNZDThe 2-year yield spread between Australia and New Zealand has risen sharply in recent days and especially overnight, where the more cautious than expected tones from the RBNZ inspired a 14 basis point drop in 2-year NZ yields. The price action in AUDNZD was sympathetic with the rally back toward local resistance near 1.0450, though the rally needs to find legs for a move up to 1.0600 at least to indicate we may have put a structural low in with a double bottom here. A brighter relative outlook for  Australia could be in the cards if China is set to stimulate and raise steel output, the anticipation of which has already sharply lifted iron ore prices this week, a key indicator for the Aussie. No notable expectations for the Riksbank tomorrow – as the central bank is expected to wind down its balance sheet expansion next year, while the policy forecast is thought to be in play (perhaps a late 2024 lift-off built into expectations, though the market is ahead of that as 2-year Swedish swap rates have risen close to 30 basis in recent weeks. This is the area where the Riksbank can surprise in either direction relative to expectations). The EURSEK rally has now reversed the entirety of the prior sell-off leg and double underlines the very weak sentiment on Europe, which remains “non-existential” in nature, i.e., so far the market is keeping this about policy divergence and dark clouds over the economic outlook, not about the longer term viability of the EMU, etc…, which in the past 2010-12 crisis inspired SEK upside as a safe haven. Table: FX Board of G10 and CNH trend evolution and strengthA bit of a relative pick-up in petro-currencies in the wake of yesterday’s oil rally, as the market bought the fact of US President Biden announcing a release of barrels from strategic reserves. Elsewhere, the NZD is losing relative altitude and the USD and especially CNH reign supreme. Table: FX Board Trend Scoreboard for individual pairs.Here, note AUDNZD flipping back to positive - a move that would be “confirmed” by a close solidly above 1.0450. Also note NOKSEK trying to flip positive on the latest oil rally, although beware the Riksbank meeting up tomorrow there. .Upcoming Economic Calendar Highlights (all times GMT) 1330 – US Weekly Initial and Continuing Jobless Claims 1330 – US Oct. Advance Goods Trade Balance 1330 – US Q3 GDP Revision 1330 – US Oct. Durable Goods Orders 1430 – UK BoE’s Tenreyro to speak 1500 – US Oct. PCE Inflation 1500 – US Final University of Michigan Sentiment Survey 1500 – US Oct. New Home Sales 1900 – US FOMC Meeting Minutes
The Euro's oversold is a sign for more volatility to come

The Euro's oversold is a sign for more volatility to come

Alex Kuptsikevich Alex Kuptsikevich 25.11.2021 08:32
The Euro fell against the dollar to 1.1200, a new 16-month low, having lost more than 4% in the last four weeks. The downward trend in the single currency accelerated in November on the divergence between Fed and ECB policies. And the latest news on business activity from Europe reinforces this divergence by feeding the bears in a single currency. The recovery in Europe appears to have peaked in May and June, after which business sentiment indicators are methodically falling. The latest data from Germany's Ifo marked the fifth consecutive month of deteriorating business conditions, driven by logistical problems, the energy crisis in Europe and a rise in coronavirus cases, followed by stricter lockdown measures. Technically, on the weekly candlestick charts, the EURUSD is oversold as last seen in 2015. Often this is a precursor for some recovery. However, historically for EURUSD, this oversold signal means we may see a further acceleration of the downside and increased volatility ahead. In 2014, 2010, 2008 and 1996, the dip of the RSI below 30 on the weekly charts followed the acceleration collapse, sometimes taking almost a free fall form. In those cases, the signal for a reversal was a rebound of the indicator above the oversold level (i.e. higher than 30), signalling the end of the sell-off in the Euro. It can take a long time between these points, e.g., in 2014-2015, it took more than half a year for the EURUSD exchange rate to collapse by 18%. The multi-year and repeatedly tested EURUSD support level is located around 1.07, and that is where the Euro could end up in the next six months. This will be especially true if economic growth in the Eurozone slows down while bond yields rise. These are conditions we are currently experiencing.
AUDUSD broke strong support at 7210/00 for a sell signal targeting 7170/65 & 7120/10...

AUDUSD broke strong support at 7210/00 for a sell signal targeting 7170/65 & 7120/10...

Jason Sen Jason Sen 26.11.2021 10:58
AUDUSD broke strong support at 7210/00 for a sell signal targeting 7170/65 & 7120/10...we are just 14 pips away as I write. NZDUSD we wrote: hit the next target of 6855 as we look for 6810. Further losses meet strong support at 6780/60. Only 8 pips from 6810 as I write this morning. AUDJPY we had a short at 8300/10 targeting 8200/8180...hit this morning as I write for an easy 100 pip profit, but it looks like we can continue lower today. Today's Analysis. AUDUSD saw a high for the day at 7210/00 with shorts working after the sell signal targeting 7170/65 & 7120/10 Close this morning), perhaps as far as 7070/50 for profit taking on all shorts this week. Strong resistance at 7180/7200. Shorts need stops above 7220. NZDUSD hit the next target of 6855 as we look for 6810 & a test of strong support at 6780/60 for profit taking on shorts before the weekend.. Gains are likely to be limited with minor resistance at 6860/70 & strong resistance at 6925/35. Shorts need stops above 6955. AUDJPY shorts at 8310/20 already have a 100 pip profit & a break below 8170 is an important sell signal initially targeting 8130 & 8110/00. Gains are likely to be limited with first resistance at 8220/30 & strong resistance at 8275/85. Shorts need stops above 8300. EURUSD shorts at first resistance at 1.1255/65 worked on the slide to 1.1225 & 1.1200, although we held 14 pips above the next target of 1.1170/60. USDCAD we wrote: first support at 1.2650/40 could see a low for the day...Longs at first support at 1.2650/40 expected to target 1.2690/1.2700 & 1.2740... 1.2720 reached as I write this morning but outlook remains positive. Update daily at 06:30 GMT Today's Analysis. EURUSD holding first resistance at 1.1255/65 offering us 70 pips profit so far as we look for 1.1170/60. No sign of a low yet, so further losses can target 1.1120/10. Gains are likely to be limited with minor resistance at 1.1230 & 1.1255/60. Strong resistance at 1.1300/10. Shorts need stops above 1.1325. USDCAD our longs at first support at 1.2650/40 expected to target 1.2740 today, perhaps as far as 1.2760/70. If we continue higher look for 1.2800. First support at 1.2650/40 could see a low for the day again today. Second support at 1.2580/70. Stop below 1.2555. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Focusing On US CPI, Fed, Commodities and Bank Of Japan - Saxo Market Call

Market Quick Take - November 29, 2021

Saxo Bank Saxo Bank 29.11.2021 09:48
Macro 2021-11-29 08:40 6 minutes to read Summary:  The market is trying to brush off fears that the new omicron covid variant may significantly disrupt the global economy, with only partial success as cases of the variant have been discovered in multiple countries outside of the original outbreak area. Equities and crude oil markets have erased a portion of the enormous losses from Friday, but the Japanese yen strength actually accelerated at times overnight as Japan will move to halt entry by all foreign visitors. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - US equity futures with especially Nasdaq 100 futures are charging ahead trading above the 50% retracement level based on Friday’s price action. The new Covid variant has for now made the market put monetary tightening on pause for a while until we get a better picture of the new variant and its impact. This is supporting US technology stocks as it puts less upward pressure on interest rates. Stoxx 50 (EU50.I) - European equities were down the most on Friday logically bouncing back the most in today’s session with Stoxx 50 futures trading at the 50% retracement level of Friday’s selloff at the 4,151 level. The next big resistance level on the upside is 4,189. If the new Covid variant ends up restricting mobility and travelling we expect Europe and emerging markets to perform worse than US equities. USDJPY and JPY crosses – The Friday meltdown in risk sentiment saw the Japanese yen rallying strongly, with a classic risk proxy pairing like the AUDJPY suffering its worst single day draw-down since the pandemic outbreak in March of 2020. While other markets tried to put on a hopeful face at the start of the week in Asia today, it is notable that the JPY strength has actually accelerated, perhaps in part as Japan is taking the remarkable step of banning all inbound travel from foreign destinations starting tomorrow. In USDJPY, we watch the important pivot low of 112.73, a fall through which could set up a challenge of the 111.50-111.00 zone that supports the trend from the lows of early 2021. Speculative positioning is quite short the JPY, so there is considerable potential fuel for an extension of this JPY rally. EURJPY has broken down through the important 128.00 area support overnight. EURUSD – the squeeze higher in EURUSD on Friday appears linked with the market moving quickly to remove expectations of Fed rate hikes in the wake of the news of the new omicron covid variant, which improves the equation for the euro from a “yield spread” perspective. For EURUSD to trade to new cycle lows from here, we would likely either need to see a return to new highs for the cycle in Fed expectations or some new meltdown in sentiment that would reward the US dollar more as a safe haven. Resistance is perhaps 1.1350-1.1385. Gold (XAUUSD) failed to attract a strong safe haven bid on Friday to push it through resistance at $1816. This despite multiple tailwinds emerging from the omicron-driven carnage after bond yields slumped while the dollar and the VIX jumped. Instead, a slump across industrial metals spread to silver and platinum, thereby curtailing golds potential upside. Gold trades lower today with other markets making a tentative recovery in the belief Friday’s selloff was overdone. However, until we have more details about the virus (see below) the markets will remain nervous as can be seen in fresh yen strength this Monday (see above). Four failed attempts to break below $1781, a key Fibonacci level, may also offer returning bulls some comfort. Crude oil (OILUKJAN22 & OILUSJAN21) suffered one of its largest one-day crashes on Black Friday in response to worries the new omicron virus variant could drive renewed demand weakness caused by widespread lockdowns and travel bans. Equally importantly was probably the very bad timing with the news hitting the markets on a low liquidity day after the Thanksgiving holiday. The market traded higher in Asia as buyers concluded the selloff was overdone while also speculating OPEC+ may act to support prices when they meet on Thursday. The group may decide to postpone the January production increase or if necessary, temporary cut production into a period that was already expected to see the return of a balanced market. Ahead of the meeting and until we know more about the new strain and its associated risks, the market will remain very volatile. US Treasuries (IEF, TLT). The omicron strain will be in the spotlight this week as well as monetary policies expectations and the non-farm payrolls on Friday. Jerome Powell’s speech tomorrow and on Wednesday will be key as the Coronavirus and CARES act will be discussed. It’s likely that rates will remain compressed across the yield curve as there continue to be uncertainties surrounding the omicron strain. Yet, we expect the Federal Reserve to stick to their hawkish agenda and accelerate the pace of tapering in December as inflation will continue to be a concern. It implies, the yield curve will continue to bear flatten, and could even invert as economic expectations dive, pinning down long-term yields. If the White House looks to add more stimulus, that would imply more bond issuance, putting further pressure in the front part of the yield curve. German Bunds (IS0L) and Italian BTPS (BTP10). This week’s focus will be the Eurozone CPI flash numbers and news concerning Covid lockdowns and restrictions. Friday’s flight to safety provoked yields to drop across the euro area, including among sovereigns with a high beta such as Italy. The reason behind it is that German Bunds are tightly correlated to US Treasuries and that the market was anticipating more accommodative monetary policies from the ECB, which have been benefitting mostly the periphery. Investors should remain cautious. Indeed, inflation remains a big focus and could drive towards less accommodative policies rather than more. What is going on? Market is grappling with what to do about the omicron covid variant. The worst impact so far is from the speed with which countries are moving to halt inbound foreign travel, with many countries stopping all flights from South Africa and other countries in the region, while Japan has taken the dramatic step of halting all inbound foreign travel from tomorrow. More hopeful indications from virologists in the virus origin area are anecdotally that this variant is not particularly virulent, although others point out that too little is known about the virus’ effects on more vulnerable patients. Weak Black Friday spending in the US, particular in-store sales. While up strongly from last year’s virus impacted activity at physical stores, US Black Friday spending in-store was down some 28% from 2019 levels and the online shopping on Friday was at $8.9 billion vs. $9.0 billion in 2019, rather disappointing totals, although some suggest that Americans have brought forward their holiday shopping this year because of widespread fears of shortages of popular products. What are we watching next? Whether market can quickly recover from fresh wave of virus concerns. The virus concerns triggered by the new variant were a jarring development, given the prior focus recently on inflation and central banks having to bring forward tightening plans to stave off inflationary risks. US stocks have been the quickest to try to put a brave face on the situation and there is some support for equities as rate hike expectations from the Fed have dropped sharply and long US treasury yields are also sharply lower, but it will take time to learn how transmissible and virulent this new omicron virus strain is, as well as how much damage will be done to growth and sentiment by new limitations on travel and other restrictions. We also have to recall that prior to this news, Europe was the epicenter of the latest wave of the delta variant and was already trading somewhat defensively. US President Biden is set to speak this evening on the new virus variant. The UN FAO will publish its monthly World Food Price Index on Thursday, and another strong read is expected, although the year-on-year increase look set to ease from 31.3%. November has been another strong month for the grains sector led by wheat due to strong demand and worries about the Australian harvest. Elsewhere Arabica coffee trades near a ten-year high on increased concerns about production in Brazil. Before Friday’s carnage across markets the Bloomberg Agriculture Spot index had reached a 5 ½-year high after rallying by 40% during the past year. Earnings Watch – earnings this week are light with the key ones to watch being Li Auto, Snowflake, Crowdstrike, Elastic, and DocuSign. Monday: Sino Biopharmaceutical, China Gas, Acciona, Li Auto Tuesday: Bank of Nova Scotia, Salesforce, Zscaler, NetApp, HP Enterprise Wednesday: Trip.com, Royal Bank of Canada, National Bank of Canada, Snowflake, Synopsys, Crowdstrike, Veeva Systems, Okta, Splunk, Elastic, Five Below Thursday: Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, Cooper Cos, Marvell Technology, DocuSign, Ulta Beauty, Asana, Dollar General, Kroger Friday: Bank of Montreal Economic calendar highlights for today (times GMT) 0830 – Sweden Q3 GDP 0830 – ECB's Guindos to speak 0930 – UK Oct. Mortgage Approvals 1000 – Euro Zone Nov. Confidence Surveys 1130 – ECB's Schnabel to speak 1300 – Germany Nov. Flash CPI 1330 – Canada Oct. Industrial Product Prices 1530 – US Nov. Dallas Fed Manufacturing Survey 1715 – ECB President Lagarde to speak 2000 – US Fed’s Williams (voter) to speak 2005 – US Fed Chair Powell gives opening remarks at conference 2350 – Japan Oct. Industrial Production 0030 – Australia Oct. Building Approvals 0100 – China Nov. Manufacturing and Non-manufacturing PMI 0200 – Australia RBA’s Debelle to speak  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher
Ahead Of The US CPI, Speaking Of Crude Oil And Metals - Saxo Market Call

Market Quick Take - December 1, 2021

Saxo Bank Saxo Bank 01.12.2021 09:27
Macro 2021-12-01 08:45 6 minutes to read Summary:  Even more whiplash for global markets yesterday as Fed Chair Powell has clearly set an entirely different tone ahead of his new term as Fed Chair, saying that it was time to retire the word transitory when discussing inflation and pointing to accelerating the slowing of Fed asset purchases, among other comments. This led to a sharp repricing of Fed expectations higher just after they had been taken sharply lower by the news of the omicron covid variant. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - the initial reaction to Powell’s statement about retiring “transitory” inflation was lower equities and higher interest rates, but the subsequent price action has not followed through. Nasdaq 100 futures, which are the most interest rate sensitive, are trading at the high end of the recent trading range around the 16,380 level with the obvious resistance level at 16,438. Short-term the price action way be confusing with low signal-to-noise ratio, but our view has been clear for over a year, and that is, that inflation is coming and in size not seen in many decades. This will have a negative effect on the most richly valued equities such as our bubble basket on stocks. Stoxx 50 (EU50.I) - one would think that Powell’s comments on inflation would lift value stocks and interest rates, and thereby creating a bigger rebound in European equities, but that is not what we are observing this morning. Stoxx 50 futures are trading around the 4,100 level with an important resistance level at 4,125; if this level can be overcome then our view is that Stoxx 50 futures could go to 4,200 and test the 200-day moving average. USDJPY and JPY crosses – whiplash for JPY cross traders yesterday, as the hawkish comments from Fed Chair Powell on inflation took Fed expectations for next year sharply back higher. Longer US yields, to which USDJPY is normally more sensitive, were less impacted, somewhat muting the impact on USDJPY, but the development came at a critical time, just after USDJPY had dipped below 112.73 range support yesterday. The reversal is a tentative sign that the pair will avoid pushing lower, but we would likely need to see the entire US yield curve lifting to have support for a renewed rally focusing on the 115.00+ recent top. EURUSD - will the ECB be forced to change its tune? Christine Lagarde’s insistence that inflation is a temporary phenomenon is under severe strain, even as she has been out this week defending this viewpoint, as was the ECB’s Schnabel, who boldly claimed that the November CPI data (more below) would prove the peak of the cycle. EURUSD churned sharply yesterday from a high of 1.1383 to a low of 1.1236 on the Fed Powell comments (below) before rebounding to 1.1336. The resilience later in the day despite a sharp repricing of Fed expectations is an interesting development, but the price action would need to threaten above 1.1500 to point to a technical reversal of the recent large sell-off. Crude oil (OILUKFEB22 & OILUSJAN21) trades sharply higher after hitting a three-month low on Tuesday in response to omicron related demand worries and general weak risk sentiment following Fed chair Powell’s comments on inflation. The market attention now turns to tomorrow’s OPEC+ meeting where the group may decide to pause production hikes while signaling a willingness to cut production should the demand suffer from fresh initiatives to curb mobility, especially for overseas travel. As a sideshow, the EIA will release its weekly inventory report later with the API reporting a 0.7m barrels draw in crude oil stock while fuel stocks rose. Gold (XAUUSD) trades higher after once again recovering from a Powell statement. Yesterday the Fed chair confirmed his recent change in focus away from creating jobs towards increasing efforts to curb elevated inflation. Risk appetite took another setback on the news but has recovered overnight as traders weighed positive regional economic data and divided views from drugmakers over how effective existing vaccines are against omicron. Overall, gold chart looks increasingly messy with no clear signal to be found at present. A break above the 21-DMA at $1820 is needed to spark fresh momentum interest while support continues to be found below $1780. US Treasuries (IEF, TLT). Powell’s testimony in front of the senate put things in perspective: inflation is not transitory, and the Federal Reserve will use its tools to stop it. These words provoked a fast bear-flattening of the yield curve where short term yields rose faster than log-term yields were dropping. We expect this trend to continue throughout winter as a new wave of covid will pin down the long part of the yield curve, but the Fed is likely to accelerate the pace of tapering. An inversion risk cannot be excluded. The 20s30s part of the yield curve is already inverted, while the 7s10s is just 7bps to get inverted. Although the 2s10s and 5s30s spreads are much wider, any flattening can pose a threat to next year’s Fed’s interest rate hike agenda. Powell and Yellen will testify again in front of the Senate today. Job numbers remain a big focus for Friday. US junk bonds (HYG, JNK). According to Bloomberg Barclays indexes, junk bonds’ OAS widened by 30bps to 330bps amid Friday’s selloff reflecting the lack of liquidity in markets. Despite negative real rates continuing to support corporate bond valuations, it’s safe to expect junk bond spreads to widen throughout the end of the year amid poor liquidity. If the volatility in rates remains sustained, the widening of spreads could accelerate, posing a threat also for stocks. German Bunds (IS0L) and Italian BTPS (BTP10). Inflation accelerated more than expected in the Eurozone during the month of November setting the yearly figure to 4.9%. Inflation figures together with the new German government adds to the catalysts of higher Bund yields. However, covid distortions are keeping yield in check. We exclude Bund yield to rise to test 0% until the new wave of covid eases. However, as soon as the worries concerning covid ease, they will resume their rise. What is going on? Fed Chair Powell confirms that Fed emphasis has shifted to inflationary risks. In testimony before a Senate committee yesterday, Fed Chair Powell waxed far more hawkish than the market anticipated on inflation concerns, saying outright that it is time to retire the word “transitory” regarding the description of inflation, that “the risk of higher inflation has increased” and that “the risk of persistent high inflation is also a major risk to getting back to such a labor market.“ (referring to the pre-pandemic labor market). Powell also pointed to the likelihood that the Fed would wind down Fed balance sheet expansion more quickly than previously anticipated: “perhaps a few months sooner”. In response, expectations for Fed rate hikes next year were jolted back higher, just after they had been jolted lower by the omicron covid variant news. Hot EU CPI numbers for November. Preliminary headline November EU CPI was out at 4.9% year-on-year, far above the 4.5% expected and the 4.1% in October and by far the highest inflation print since the launch of the euro. Core CPI rose to 2.6% year-on-year, above the 2.3% expected and the October level of 2.0%. This is also the highest level since the launch of the euro in 1999. Germany’s incoming chancellor Scholz speaks on inflation, compulsory covid vaccination. The political pressure on the ECB to act is ratcheting higher after incoming German chancellor Scholz said that action must be taken if inflation fails to drop, though he seemed now to accept the notion that inflation is linked to covid measures and the spike in energy prices. He also spoke yesterday in favor of mandatory covid shots. Salesforce shares down 6% on Q4 guidance. Investors are used to being spoiled by Salesforce with consistently beating analyst expectations, but last night the cloud application software company disappointed on Q4 guidance with revenue in line and adj EPS at $0.72-0.73 vs est. $0.82. The company also announced that Bret Taylor will become co-CEO next to founder Marc Benioff in a sign that the founder may soon step down like so many other technology founders in recent years. What are we watching next? Markets adjusting to new reality of a more hawkish Fed. In particular if the omicron variant of the covid virus proves a temporary distraction, global markets will need to adjust the major adjustment in the Federal Reserve’s focus and what that could mean for the US dollar and asset valuations ahead. Fed Chair Powell’s rhetoric yesterday likely mean a heightened reactivity to incoming data from here on out, all modulated in the very near term by headline risks in either direction on the omicron variant. The first major data points are the ISM Service index and November jobs report up on Friday. The Average Hourly Earnings could take over in importance from the payrolls change number if it shows more aggressive rises, as it seems clear that labor supply is the chief problem US companies face, as seen in record job availability and “quits” as workers leave jobs for greener pastures. ADP employment figures for November. With the US economy operating at full capacity according to estimates from CBO, continued strong job gains will add fuel to the “inflation fire”, so today’s ADP figures could more interest rates and equities. Economists are looking at 525K vs 571K in October which would be a significant two-month change for an economy that has closed the output gap, but on the other hand, the US economy is still short around 8.5mn jobs from current levels to where employment would have been if we did not have the pandemic. Earnings Watch – growth investors will have their eyes on Snowflake set to report after the market close with analysts expecting FY22 Q3 (ending 31 Oct) revenue growth of 92% y/y. Crowdstrike, being one of the fastest growing cyber security companies in the world, will also be key to watch today. Wednesday: Trip.com, Royal Bank of Canada, National Bank of Canada, Snowflake, Synopsys, Crowdstrike, Veeva Systems, Okta, Splunk, Elastic, Five Below Thursday: Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, Cooper Cos, Marvell Technology, DocuSign, Ulta Beauty, Asana, Dollar General, Kroger Friday: Bank of Montreal Economic calendar highlights for today (times GMT) 0730 – Switzerland Nov. CPI 0815-0900 – Euro Zone Final Nov. Manufacturing PMI 1315 – US Nov. ADP Employment Change 1330 – Canada Oct. Building Permits 1445 – US Nov. Final Markit Manufacturing PMI 1500 – US Fed Chair Powell, Treasury Secretary Yellen to testify before House panel 1500 – US Nov. ISM Manufacturing 1530 – DOE’s Weekly Crude Oil and Fuel Inventories 1900 - Fed Beige Book 0030 – Australia Oct. Trade Balance   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher
Intraday Market Analysis – Gold Awaits Breakout - 03.12.2021

Intraday Market Analysis – Gold Awaits Breakout - 03.12.2021

John Benjamin John Benjamin 03.12.2021 09:42
XAUUSD tests key support Gold treads water as markets await US jobs data release. The metal remains under pressure after it failed to maintain bids above 1780. Sellers are testing the daily support at 1760. A bearish breakout would shatter hopes of a swift rebound and send the price to last September’s low at 1725. That move could then threaten the integrity of the uptrend on a longer timeframe. 1806 is a fresh resistance and sellers could be waiting to double down at a better price. On the upside, a bullish breakout may propel the metal to 1845. EURUSD attempts bullish reversal The euro recoups losses as traders reposition ahead of today’s nonfarm payrolls. A bullish RSI divergence indicates a slowdown in the bearish push. The pair has found support near June 2020’s lows around 1.1190. Then successive breaks above 1.1270 and 1.1370 have prompted short interests to bail, paving the way for a potential reversal. 1.1460 next to the 30-day moving average would be the target and its breach may turn sentiment around. 1.1240 is a key support to keep the rebound relevant. US 500 heads towards daily support The S&P 500 continues on its way down as investors jump ship amid the omicron scare. The latest rebound has been capped by 4650, a sign that the bears are in control of short-term price action. A combination of pessimism and lack of buying interest means that the index is stuck in a bearish spiral. An oversold RSI may cause a limited rebound as intraday sellers cover their positions. 4450 at the origin of a previous bullish breakout would be the next target. 4360 is a second line of defense that sits in a daily demand zone.
FX Update: Omicron whiplash for USDJPY

FX Update: Omicron whiplash for USDJPY

John Hardy John Hardy 29.11.2021 13:42
Forex 2021-11-29 13:00 4 minutes to read Summary:  The Friday meltdown in USDJPY and JPY crosses was all about position squaring as we had just come from a place of anticipating a more hawkish shift from central banks, particularly the US Fed. The sense of whiplash was most acute in USDJPY, which had just been up testing multi-year highs before the deleveraging across markets on the new omicron covid variant clouding the outlook. FX Trading focus: Narrative whiplash for JPY traders on omicron variant concerns The news of the new omicron variant of covid could not have come at a more difficult time for the market to absorb for at least two reasons. First, of course, was the poor liquidity when US markets were closed Thursday and only open part of Friday due to the Thanksgiving holiday. Second was that we had just earlier the same week seen Fed Chair Powell and Brainard elevating the relative focus and position of grappling with inflation in their acceptance speeches, which had sent Fed rate hike expectations to new highs for the cycle early last week before the news hit. That ratcheting up of Fed rate anticipation had helped take USDJPY to new highs since early 2017 above 115.00 and EURUSD to new lows below 1.1200. But the positioning build-up in USDJPY has been far more extreme and the reaction in JPY crosses on Friday was fully in fitting with the JPY’s old status as a safe haven. Note that AUDJPY had its worst single-day drop since the heart of the pandemic outbreak panic in March of last year, while EURJPY has poked below the important 128.00 area that would suggest a break-down if the move holds. EURUSD rose sharply, as the sudden repricing of the Fed saw the EU-US yield spread tightening sharply, but the move would have to extend as far as 1.1500 to start having more profound technical implications. Has the market taken the news too far? That is not for me to judge, as it will take some time to assess the status of the reach of the current outbreak transmissibility, virulence and vaccine-evading characteristics of this new variant, all while real damage is being done as some countries are limiting travel, some merely from the areas where the new variant was discovered in southern Africa, while Japan has announced a full ban on inbound travel starting tomorrow. US President Biden will speak on the new variant later today. What does the best outcome look like? The omicron variant proves very transmissible, but is considerably milder and/or not particularly good at getting around the existing vaccines. Worst case involves some combination of significant vaccine evading characteristics and virulence that is anywhere similar to prior variants. I suspect that without immediate good news (real news surely requires at least a week from here?), the uncertainty could see risk-correlated trades dragged lower before things can improve, but a significant further deterioration in risk assets would likely require actual bad news emerging rather than merely an extension of the uncertainty. Regarding a timeline for learning more about the risks from the omicron variant, it’s best perhaps to admit that I have no clue, but a Reuters article suggests the major vaccine makers may be able to determine efficacy of existing vaccines in about two weeks. Chart: USDJPYWhile other JPY crosses were bigger movers on Friday, the technical development in USDJPY was the most remarkable, as it came off new cycle- and multi-year highs. The damage is significant locally, but would turn more severe if the 112.73 pivot low from October is broken and then goes on to challenge the more structurally significant 111.50-111.00 area. Source: Saxo Group Looking at the week ahead, we would normally be touting the importance of the next set of US survey numbers (November Consumer Confidence and November ISM Manufacturing on Wednesday and ISM Services on Friday) and November jobs and earnings numbers on Friday, but instead, we’ll have to juggle the ongoing news flow and headlines from the new virus variant and may have to file these data away for a later “pent-up” reaction if the omicron variant impact dissipates. Besides the US dollar and the JPY, I will watch all points on the US yield curve and risk sentiment measures closely for how the market is reading the situation. Powell is out today with opening remarks at some event - more interesting is testimony tomorrow, together with Treasury Secretary Yellen, on the policy response to the pandemic, which could see interesting exchanges on inflation, etc.  Table: FX Board of G10 and CNH trend evolution and strengthThe JPY is in a very different place from where it was a week ago or even two trading sessions ago and looks to remain the high-beta currency to whether the virus news drags market sentiment. The SEK reading looks extreme, but difficult to fade in terms of picking levels – downside put spreads in EURSEK the cautious way to proceed for those interested in fading this move now rather than waiting for a reversal pattern to develop. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Talking trends is treacherous business when the market goes into headline reactivity mode, but note that USDJPY and CNHJPY turning negative (if they close lower today) would make it a clean sweep for the JPY across the board. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1300 – Germany Nov. Flash CPI 1330 – Canada Oct. Industrial Product Prices 1530 – US Nov. Dallas Fed Manufacturing Survey 1715 – ECB President Lagarde to speak 2000 – US Fed’s Williams (voter) to speak 2005 – US Fed Chair Powell gives opening remarks at conference 2350 – Japan Oct. Industrial Production US President Biden to speak about omicron variant 0030 – Australia Oct. Building Approvals 0100 – China Nov. Manufacturing and Non-manufacturing PMI 0200 – Australia RBA’s Debelle to speak
FX Update: EURCHF lower has been the Teflon trade

FX Update: EURCHF lower has been the Teflon trade

John Hardy John Hardy 03.12.2021 13:50
Forex 2021-12-03 13:28 4 minutes to read Summary:  A look across FX shows many of the usual suspects weakening with the recent bout of risk aversion, with commodity currencies near important levels versus the US dollar. While the JPY has traded erratically of late on conflicting themes and has not shown its safe haven status of yore, the Swiss franc has, managing to thrive when the focus is on inflation and when it is on weak risk sentiment as the SNB seems to have quietly stepped away from reining in franc strength. FX Trading focus: EURCHF lower has been the Teflon trade The most consistent trending pair in G10 FX of late has been the slide in EURCHF, which has even slipped below the prior six-plus-year low near 1.0500 over the last week. Remarkably, the pair has maintained its consistent ride lower through some remarkable jolts in the background, including the more hawkish shift from the Fed and the omicron news. This may suggest that the move is not being driven by strong speculative flows – which might have shown significant volatility in line with other currency pairs recently, but rather by consistent flows as the Swiss National Bank has apparently stepped away from the assumed stout defense of the 1.0500 level. The last two weeks of sight deposit data have shown no growth, i.e., no signs that the SNB is leaning against this move after doing so the prior four weeks. Also, when inflation fears dominate as they have at times recently, CHF strength is an easy way to avoid importing inflation without rocking the boat with monetary policy signals, while CHF strength is also a natural safe haven play when volatility spikes as it has in recent weeks. The consistent trend may be set to extend here, with parity in EURCHF a natural target. Elsewhere in FX, most of the smaller currencies are lining up on the usual risk-on, risk-off fault-lines, with commodities currencies and Scandies all weak as sentiment has softened again today, although it will be interesting to see if oil prices can make a stand after the reversal of the sharp sell-off yesterday despite nominally bearish news. Big next levels coming into view include 1.3000 in USDCAD and 0.7000 in AUDUSD. On the strong side, the EUR, USD and JPY are jockeying for the upper hand in addition to the strong CHF noted. The reaction function around today’s US jobs report (can a strong average hourly earnings add further energy to Fed upside expectations on top of an already momentous shift, and how much will residual omicron uncertainty hold back that pricing for now?). Chart: EURCHFEURCHF has weakened steadily since mid September in line with the weakening in EURUSD, but far more steadily than the latter, as this trend has managed to sustain through recent volatility elsewhere and shifting focus. The technical situation is without remarkable variation and there are no signs that the SNB is leaning against the move of late. Could the move extend all the way to within reach of parity? Source: Saxo Group Elsewhere, notable BoE hawk Michael Saunders was cautious sounding in comments today on the omicron variant uncertainty, prompting the sharp slide in sterling today. He said that the omicron development is a key consideration for whether to hike in December and sees some advantages in the BoE waiting for omicron data, which may sideline any hike potential at the December 16 meeting, with the market currently putting low odds on a move (difficult to measure – the idea has developed that the BoE will hike 15 bps to 0.25%, with about a 5-7 bps of hiking priced). Saunders still favors policy tightening soon and said today that the rate rise would be limited if the BoE gets going soon. Table: FX Board of G10 and CNH trend evolution and strengthThe impressive CHF rising nearly all the way to the top of the table here, as the left/right split of the G10 currencies is nearly perfect, with all of the five “smalls” in the red, most of them deeply so. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Plenty of bright orange readings in the daily ATR shadings – these indicate very significant volatility relative to the last 1000 trading days (top 10% ranking), , while it is interesting to note something like the EURUSD supermajor still trading with still quite low intraday volatility. AUDNZD is trying to flip back to negative, while USDCHF and USDJPY have yet to follow through lower after their recent flips to the negative in the “trend” reading. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1300 – ECB Chief Economist Philip Lane to speak 1330 – US Nov. Change in Nonfarm Payrolls 1330 – US Nov. Average Hourly Earnings 1330 – US Nov. Unemployment Rate 1330 – Canada Nov. Net Change in Employment 1330 – Canada Nov. Unemployment Rate 1415 – US Fed’s Bullard (voter in 2022) to speak 1500 – US Nov. ISM Services  1500 – US Nov. Factory Orders
Weekly Close Out

Weekly Close Out

Luke Suddards Luke Suddards 04.12.2021 17:45
Omicron: In today’s weekly I’ll be dedicating some digital ink for the latest information on the new variant omicron. Ok so what are the major points of importance. New admissions to hospitals in Gauteng increased by 144% last week (hospitalisations lag cases by around 1-3 weeks). So far the early data shows the majority of these hospitalisations are from the unvaccinated (if that trend remains that’s positive). However, a recent study released from South Africa indicates reinfection risk is 3 times higher than previous variants. In terms of the deadliness of this variant, the early data looks good with Australia’s Chief Medical Officer Paul Kelly stating that of the 300 cases recorded worldwide all were very mild or had no symptoms at all. However, the sample size is too small so we can’t draw solid conclusions at this stage. The major vaccine makers have offered timelines of two to six weeks for assessing the vaccine escape properties of omicron via in-vitro lab tests. Interestingly, Moderna is less optimistic than Pfizer about expecting current vaccines needing to be tweaked to fend off the omicron variant. Volatility will remain high as the market remains on tenterhooks as new information drips through. Dollar Index (DXY): The greenback is flat on the week, with many quite perplexed by the lack of gains (particularly against the euro) given the hawkish Fed pivot and risk sentiment remaining on edge. The dollar coming in flat is a combination of gains against high-beta cyclical companies offset by losses against traditional safe haven currencies. Just take a look at the charts of USDJPY and AUDUSD. In terms of the euro, I’ll chat more about that below in the EURUSD paragraph. The big domestic news for the dollar this week was Jerome Powell’s hawkish rhetoric. The word transitory is to be retired as he admits the threat of persistently higher inflation has grown. On the QE purchases side of things, he remains open to it being wrapped up earlier than originally expected with a discussion on a faster pace taking place in 2 weeks at their December meeting. He elucidated his thoughts on the employment side of their mandate, stating that a great labour market requires a protracted expansion and in order to achieve this price stability has to occur. I see this as inflation now taking primacy over employment goals, indicating a shift in the Fed’s thinking with regards to inflationary pressures. The hawkish commentary from FOMC members this week such as Daly, Quarles, Barkin and Bostic would certainly suggest this is the case. STIRs are showing rate lift-off for practically June 2022 (96%) and over 2.5 hikes through December 2022. All attention now falls to the Non-Farm Payrolls number out today. The preliminary indicator such as ISM manufacturing index, ADP and jobless claims all pointing towards decent numbers from the jobs report today disappointed as NFP numbers missed expectations by a significant amount. Price moves have been muted as traders may be reluctant to place any fresh positions on and chase with the risk of adverse news over the weekend regarding omicron. Bottom line - traders should expect cross-asset volatility to remain higher over December. Next week we’ll receive November US inflation data, which is expected to remain elevated. DXY has regained the upper trend line of its ascending channel, putting some distance between price and its moving averages. The 21-day EMA continues to provide some dynamic support to price dips. The RSI has held above the key 55 level of support. Targets wise keep an eye out on the 96.5 on the upside and to the downside the 21-day EMA and former support around 95.5. EURUSD: So why did EURUSD strengthen on the market sell-off due to omicron on Friday and has remained fairly defensive throughout this week? It’s certainly not because the euro is a safe-haven currency in times of risk aversion. This price action has more to do with its use as a funding currency. Traders borrow euros to search for higher yield globally which is a decent strategy when risk conditions are favourable, however, when that risk dial flips in other direction we see the typical carry trade unwind, leading to flows back into the euro. Additionally, because expectations for rate hikes with regards to the eurozone are already significantly low, it’s at much less risk of a dovish repricing working favourably in terms of spread differentials with the dollar. Political pressure is rising on the ECB to act, particularly from Germany. A Reuters article out mid-week pointed towards some members wanting to rather hold off declaring their asset purchase intentions at this December meeting due to uncertainty caused by omicron. However, the ECB's Muller stated that he doesn’t think omicron is a reason to shift the scheduled end date for PEPP. Following this line of thought just today Madame Lagarde expressed that she feels certain that PEPP will cease in March as planned, saying markets require clarity in December. On the data front we had better than expected inflation prints from Germany (5.2% YoY) and the eurozone (4.9% YoY). It’s quiet in terms of economic data next week with the ZEW survey out as we lead up to a crucial ECB meeting in two weeks. EURUSD is drifting lower from its 21-day EMA. The RSI has stalled around the 40 level. Looking at the technicals clearly EURUSD is in a downtrend. Rallies in my opinion should be short lived with sellers coming in. Key levels to monitor in both directions are 1.135 (21-day EMA) and on the downside 1.12. GBPUSD: With a vacuum of economic data for the UK, the words of central bankers took centre stage. Bailey didn’t provide much meat at his speech this Wednesday. However, Saunders (leans hawkish) who spoke today has caused a repricing lower in the probability of a 15bps rate hike come December (only an additional 4bps now from around 8bps pre-speech). He expressed the need for potentially taking a patient approach with the uncertainty from omicron. Cable is lower as a result. On the virus front, the UK regulator has given the green light for booster doses to be offered to all adults. Additionally, the government has signed a contract for 114 million vaccine doses from Pfizer and Moderna, including access to modified vaccines if they're needed to tackle omicron and other future variants of concern. On the political front, domestically the Tories held the seat of Old Bexley and Sidcup, however, with a reduced majority. On Brexit, it’s been quiet of late with some optimism around the granting of additional fish licences to French fisherman in Guernsey, Jersey is the more important zone though prone to flare ups in tension. However, temperatures remain high between France and the UK on issues related to immigration. Next week sees UK October GDP data released. EURGBP has been moving higher on the back of dovish commentary (given he’s a hawk) from Saunders as well as benefiting from any souring in risk-sentiment. The 200-day SMA isn’t far aware, which has previously capped price gains. Cable continues to -plumb fresh YTD lows and is now nearing 1.32. The RSI is near to oversold territory but with some room remaining to eke out further losses. Moving averages are all pointing downwards. Targets wise, on the upside the 1.335 and above there former support around 1.34 (21-day EMA too). USDJPY: This pair continues to trade on US 10-year yield moves and now it’s status as a safe-haven currency has kicked back in. Early Friday morning has seen a bid coming in, which could be some pre NFP positioning on expectations of a move higher in the back end of the US yield curve. Put EURJPY on your radar, price is at a key support level around 128. USDJPY is finding support around its 50-day SMA, 113 round number and the 38.2% Fibonacci level. Price is trying to overcome resistance from the 50-day SMA. The former range support is providing some resistance around 113.5. The RSI is trying to get back into its range support around 46. Targets wise on the upside, 114 will be important and on the downside 112.5 (this week's lows). Gold: Gold has slipped below the $1775 support level as the hawkish fed leads to higher short term rates, kryptonite for the shiny yellow metal. Fears over inflation have failed to help gold stay propped up as well as risk-off fears from omicron. Inflation data out from the US next week will be a risk event for gold traders as well as the Fed meeting the following week. Today’s NFP hasn’t ignited much excitement in gold markets. Gold is trying to reclaim the $1775 support level. The 50-day SMA has made a very minor cross above the 200-day SMA. The 21-day EMA has been capping further gains. The RSI is in no man's land around 38. Targets wise, if $1775 is cleared then $1800 opens up (moving averages just below there). On the downside, $1750 comes into view. Oil: Crude fell sharply into a bear market this week as risk-off, Fed tightening, fears over further lockdowns and travel bans from the new omicron variant led to a repricing on the demand side of the equation. OPEC+ the main event for crude traders this week, decided to stick to their scheduled 400k bpd for January, but caveated this with the meeting remaining in “session”, meaning changes to the supply side could be made before their 4 January meeting if omicron causes a further deterioration. This led to yo-yo style price behaviour. Until there is more clarity regarding omicron, I expect oil’s price to remain choppy without a solid price trend. Backwardation spreads have narrowed, indicating a more balanced supply and demand equation. Iranian Nuclear Negotiations began the week positively, but sentiment turned pessimistic towards the end of this week, providing further short-term bullish tailwinds to crude’s price. JPM has some very bullish forecasts with the bank expecting crude to hit $150 by 2023. Oil is having a run at its 200-day SMA. The RSI has moved out of overbought territory and is a fair distance below its 50-day SMA (some mean reversion). Right now price will remain choppy within a range as omicron news flow prevents a trend from forming. Targets wise, on the upside the 200-day SMA and $73.50 dollar mark will be key. On the downside $68 support is important.
Intraday Market Analysis – USD Edges Lower

Intraday Market Analysis – USD Edges Lower

John Benjamin John Benjamin 08.12.2021 09:07
EURUSD seeks support The euro bounced higher after the bloc’s Q3 GDP beat expectations. A previous rebound was capped by the 20-day moving average, suggesting that the bearish sentiment still prevails. The RSI’s double top in the overbought area has prompted short-term buyers to take profit. The pair has met support above 1.1240. The bulls will need to lift offers around 1.1330 before they could attract momentum buyers. A bearish breakout would send the price to the floor at 1.1190. Its breach would trigger a new round of sell-off. AUDUSD breaks higher The Australian dollar soared after the RBA remained optimistic about the economic recovery. The pair saw strong buying interest at the psychological level of 0.7000, which also sits near November 2020’s lows. An oversold RSI on the daily chart compounds the ‘buying-the-dips’ behavior. An initial pop above 0.7070 forced bearish trend followers to cover their latest bets. 0.7170 would be the next target though the RSI’s overbought situation may limit the surge. 0.7040 is the first support for buyers to regroup and accumulate. USDJPY attempts to rebound The yen stalled after Japan’s GDP showed an unexpected contraction in Q3. A break below the daily support at 112.70 has put the bulls on the defensive. The latest consolidation is a sign of indecision as to whether the correction would continue. The greenback found support over 112.50 and a close above 113.95 could help the bulls regain the upper hand. Then the psychological level of 115.00 would be the next step before the uptrend could resume. On the downside, a fall below 113.10 would retest the key support at 112.50.
FX Update: Risk sentiment comeback with a few twists

FX Update: Risk sentiment comeback with a few twists

John Hardy John Hardy 08.12.2021 15:14
Forex 2021-12-08 14:45 4 minutes to read Summary:  Risk sentiment is well on its way to erasing the reaction to the news of the omicron variant of covid, with most reactions across FX adjusting as one would expect on an improved outlook, with commodity currencies performing best, while safe haven JPY and CHF trade weaker and the euro is unable to figure out what it wants to do. Adding to a more hopeful stance and a weaker US dollar overnight was China allowing its currency to push to new highs for the year, beyond the highs established back in May. FX Trading focus: CNY new highs for the year, strong resurgence in risk sentiment The US dollar has pushed lower this week on a resurgence in risk sentiment, led by fading omicron fears – particularly yesterday – but also on hopes that China is set to support the global growth outlook and signaling confidence by allowing the renminbi to push to new highs for the year versus the US dollar. The weaker US dollar elsewhere this week explains the timing of the large move to new lows in USDCNH, as the CNH has actually underperformed resurgent commodity FX and some EM FX this week even while it outperformed the strong US dollar this year on balance. If the USD is to weaken further from here, it would be no surprise to see CNH continuing higher versus the US dollar – perhaps even beyond the 2018 lows in USDCNH – while keeping it somewhat weaker versus other currencies against which it has appreciated so aggressively this year. China is clearly interested in defending the stability and purchasing power of the CNH versus the USD and its basket, but the extent of the revaluation is getting stretched if we look at the official CNY basket. In G10 FX, the resurgence in risk sentiment has boosted the usual suspects and weighed against the other usual suspects, although a couple of unusual situations stick out: GBP and SEK: Sterling is in danger of breaking down versus the euro here after testing new lows for the year this morning in GBPUSD despite sterling’s former correlation with risk appetite, perhaps as a lot of air has been taken out of Bank of England expectations as the market has shifted the expected lift-off meeting to February of next year after pricing as early as November a couple of months ago. Late last week, the BoE’s normally hawkish Saunders sounded cautious on lifting off next week, while the day before yesterday Deputy Governor Broadbent advised looking “a couple of years ahead” in predicting that “these pressures on traded goods prices are more likely to subside than intensify”, although he did say wages could be an inflation driver. Chart: EURGBPEURGBP is poking at the 200-day moving average from the downside for the third time in recent months, and the less hawkish BoE may help trigger a further squeeze higher, especially if the 0.8600 prior pivot high falls. Next focus higher still comes in at the range highs from April-May near 0.8720. Source: Saxo Group SEK has traded sideways today rather than rallying, as one would expect, on the strong comeback in risk sentiment. The krona is historically one of the most highly risk sensitive currencies. Sure, the euro is largely stuck in the water here and the EU growth outlook has plenty of clouds over it with covid shut-downs etc, but EURSEK looks “wrong” relative to other reaction to the improved mood across markets, and should be lower. A statement today by Riksbank dove Jansson that it is hard to justify rate hikes and that a more active fiscal policy is the way forward likely held back SEK, as perhaps NOKSEK buying, judging from the last couple of session in that cross. In other developments, AUDNZD has cleared the important 1.0500 level, EURCHF is trying to pull higher but is still some way from challenging the important 1.0500 level. The CHF has not behaved anything like the JPY in recent months, failing to show sensitive in EURCHF, at least, to large shifts in safe haven years. Likely, to get EURCHF off the mat, we’ll need to see a broader EUR rally that includes EURUSD on a brightening outlook for EU growth. Hard to see how it gets much worse, on a relative basis, at present (covid shutdowns, energy crunch, etc…) The Bank of Canada is out just after pixel time for this article. The market is leaning for hawkish guidance for a sure rate hike at the January meeting, which is very likely what it will get. The degree to which CAD can continue to rally will also depend on whether the now suddenly very CAD-supportive backdrop extends. USDCAD needs to bash back below 1.2500 to suggest a full reversal of the rally move off the sub-1.2300 lows in October is in the cards. Looking ahead, the next critical event risks are the Friday US November CPI print, and then the exercise next week in seeing how the market reacts to the crystallization of the now hawkish Fed’s adjustments to its new monetary policy statement and to the “dot plot” of its policy forecasts. Table: FX Board of G10 and CNH trend evolution and strengthStill mean reverting from the prior trends in most currencies, but far more upside needed from commodity currencies to fully reverse the prior trends. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.A strong move higher in EU yields taking EURJPY back well above the important 128.00 level of contention lately – watching whether the trend can flip positive in the week ahead. Elsewhere, note again that AUDNZD has pulled above the important 1.0500, that USDCHF flipped positive (even if it is mid-range after surviving another test of the 200-day moving average), and that NOKSEK is trying flipping positive after a very sharp rebound from recent lows. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1500 – Canada Bank of Canada Rate Decision 1500 – US JOLTS Job Openings survey 2130 – Brazil Selic Rate Announcement 2205 – Australia RBA Governor Lowe to speak 0001 – UK Nov. RICS House Price Balance 0130 – China Nov. CPI / PPI
Market Quick Take - December 9, 2021

Market Quick Take - December 9, 2021

Saxo Strategy Team Saxo Strategy Team 09.12.2021 09:48
Macro 2021-12-09 08:40 6 minutes to read Summary:  Global markets tried to gin up additional enthusiasm yesterday on the announcement yesterday from Pfizer that three shots of vaccine may offer far more protection from the omicron variant, but the market traded largely sideways as the sharp rally from the prior day was consolidated. The US dollar is showing signs of consolidating lower ahead of arguably the last two major event risks for the year for the currency, the Friday US November CPI data and the FOMC meeting next Wednesday. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - US equities momentum waned a bit yesterday and trading flat in early European trading hours. In Nasdaq 100 futures the 16,420 is the key resistance level to watch in today’s session. While Nasdaq 100 futures are flat this morning, Bitcoin is trading 2% lower which if it continues could spill over into US technology stocks as these pockets of the market are connected in terms of risk-off. Bubble stocks were the biggest gainers yesterday and provide another opportunity for retail investors to reduce exposure in bubble stocks ahead of the new year. EURUSD – The EURUSD rallied sharply yesterday as the US dollar was generally on its back foot, but a solid jump higher in EU sovereign bond yields and the official handover of power to the new German government coalition yesterday may have been elements supporting the rally. The move rose as high as 1.1350, just ahead of tactical resistance near 1.1375, the last hurdle ahead of more major trend resistance near 1.1500. In many past cycles, the calendar roll has proven a major inflection point for EURUSD. The December 15 FOMC meeting and December 16 ECB meeting both look important for the provision of new guidance, with the FOMC already having made a clear hawkish shift, while the ECB will have to deliver revised inflation forecasts and guidance on balance sheet policy after its emergency “PEPP” form of QE is set to end in March. AUDUSD – The Aussie has undergone a significant sentiment shift from one of the weakest G10 currencies to one of the strongest in recent sessions, in part on the reversal in risk sentiment, but also aided by China signaling a willingness to ease policy. Speculative positioning in the US futures market suggest a very heavy short position that, if similar to positioning in the OTC market, could provide significant fuel for a squeeze higher in the currency if the backdrop of improving risk sentiment and a focus on inflation risks further boosts the price action in key commodities like iron ore, coking coal and other metals. At any rate, AUDUSD has reversed up through the first resistance near 0.7100 and is now staring down the next pivotal area into 0.720-7250, needing to blast through this and then some to suggest an attempt to put in a bottom after touching the huge 0.7000 level within the last week. Crude oil (OILUKFEB22 & OILUSJAN22) trades higher for a fourth day as omicron demand concerns continue to ease and speculators accumulate length following last week’s washout. Flare-ups around the world resulting in temporary lockdowns is however likely to prevent the market from returning to pre-omicron levels at this point. The EIA reported a small 240k barrels weekly decline in crude stocks while inventories of fuel rose by a combined 6.6 million barrels. Next level of resistance in Brent being the 21-day moving average at $77.20 followed by $77.60. Gold (XAUUSD) remains stuck below the 200-day moving average, currently at $1793 with the market struggling for direction ahead of Friday’s key US inflation data. Support from a softer dollar continues to be offset by worries that a succession of expected US rate hikes in 2022 will drive up US real yields, thereby reducing a key source of support for gold. Ahead of Friday’s CPI data, the market has priced in three rate hikes next year with the first potentially coming as soon as May. Focus on silver (XAGUSD) which following its recent 13% slump is trying to establish support at $22, thereby supporting a lower XAUXAG ratio has stopped rising after finding resistance above 80 ounces of silver to one ounce of gold. US Treasuries (IEF, TLT). Haven bid for bonds faded as news hit the market that a third vaccine dose gives coverage for the omicron strain. Ten-year US Treasury yields rose above 1.50%, and yesterday’s 10-year US Treasury auction wasn’t as good as the 3-year auction the previous day. It tailed 0.4bps pricing at 1.518%. The bid-to-cover rose to 2.43x, a little lower than the past six auctions average. The yield curve bear steepened. Yet, we expect long-term yields to remain compressed if Covid infections still are an issue and lead to more restrictions. Today, the Treasury is selling 30-year bonds. If the selloff in the long part of the yield curve continues, we might witness a weak auction. What is going on? China PPI falls less than expected in November as it rises 12.9% year-on-year. The PPI number is widely considered a global inflation barometer as China is “the world’s factory”. The rise was higher than the 12.1% year-on-year expected, but lower than October’s 13.5%. The November China CPI number came in slightly cooler than expected at 2.3% year-on-year versus 2.5% expected and 1.5% in October. Pfizer says three shots of its vaccine offer more significant protection against the omicron covid variant. This news from yesterday sounded more promising than the news from just yesterday from a preliminary South African study that patients vaccinated with two shots showed some, but heavily reduced, production of antibodies in patients with the omicron variant. Pfizer found the same, but says that a third shot can bring the antibody response to similar levels as for the prior covid variants. Pfizer also said an omicron-targeted version of its vaccine could be ready in March. Buffett-backed digital lender Nubank to start trading today. The Brazilian-based digital bank Nubank is raising $2.6bn in its IPO becoming of the biggest IPOs this year with shares priced at $9 and first day of trading today on NYSE. This will mark one of the biggest publicly listed fintech companies in the world and provide a glimpse into the feasibility of running a large digital only bank. Bank of Canada upgrades language on inflation, likely set for January rate hike. The new Bank of Canada policy statement dropped a reference from the prior statement on “temporary” inflation forces, though it still maintained the expectation that inflation would drop toward 2 percent in the second half of next year. The strength in the jobs market was noted. Overall, the hawkish language changes were clear, if relatively small relative to rather aggressive market shift in expectations, and Canadian yields eased a few basis points lower at the front part of the yield curve, though a January rate hike from the bank remains likely, according to market expectations. Brazil hikes policy rate 150 basis points, BRL sees sharp gains. The rate hike to 9.25% was in line with expectations, but the central bank delivered hawkish guidance for another hike of the same size at the February meeting as the bank has clearly gone into aggressive inflation fighting mode. The Brazilian real responded strongly, gaining some 1.4% versus the US dollar yesterday. The EU gas and power market went from bad to worse yesterday after an unplanned outage temporarily cut supplies from Norway’s giant Troll field. Coming on top of geopolitical risks related to Ukraine, low winter supplies from Russia, freezing cold weather and rapidly declining stocks, these developments have driven Dutch TTF one month benchmark gas back above €100 per MWh or $34 per MMBtu. With rising demand for coal driving the cost of EU emissions to a fresh record above €90 per tons, the cost of power has surged as well. In Germany the one-year baseload contract reached a record €189 per MWh, or 5 times the long-term average. What are we watching next? WASDE on tap - Ahead of today’s monthly update on world supply and demand, the grains sector has seen a slight drift lower during the past week as the market tried to gauge the impact of the omicron variant. Today’s World Agriculture Supply and Demand report (WASDE) will primarily focus on ending stocks with expectations pointing to a relatively quiet update. US corn stockpiles are expected to have fallen slightly from November while wheat and soybean stocks are both expected to be higher, both in the US and globally. The EU is set to decide by December 22 whether investments in gas and nuclear energy should be labelled climate friendly. The design of the EU green investment classification system is closely watched by investors worldwide and could potentially attract billions of euros in private finance to help the green transition, especially given the need to reduce the usage of coal, the biggest polluter. This week’s earnings: Today’s focus is Oracle which is still struggling to find an attractive growth trajectory in the age of cloud applications, SaaS business models, and more open-source software on databases with flat revenue over the past four fiscal years. Lululemon has been one of the big winners during the pandemic gaining tailwind from home exercising, but generally the company taps into a longer-term trend of personal health. Analysts expect Lululemon to report 29% y/y revenue growth in Q3 (ending 31 October). Thursday: Sekisui House, Hormel Foods, Costco Wholesale, Oracle, Broadcom, Lululemon Athletica, Chewy, Vail Resorts Friday: Carl Zeiss Meditec Economic calendar highlights for today (times GMT) 0830 – Hungary Rate Announcement 1200 – Mexico Nov. CPI 1330 – US Weekly Initial Jobless Claims and Continuing Claims 1530 – EIA Natural Gas Storage Change 1700 – USDA World Agriculture Supply and Demand Report (WASDE) 1800 – US Treasury 30-year T-Bond auction   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher
Tension Beetween Ukraine And Russia Definetely Shaped News In Recent Days

USDCAD, EURJPY, CADJPY, AUDJPY and other pairs highlighted in today's analysis by Jason Sen

Jason Sen Jason Sen 10.12.2021 11:29
Video analysis: AUDJPY shorts at 8155/75 worked perfectly with a high for the day here & a dip to 8090 EURJPY shorts at strong resistance at 128.80/129.00 worked perfectly with a high for the day here & a 100 pip profit on the slide to 128.00/127.90 for profit taking. In fact we saw a low for the day here. CADJPY reversed to strong support at 8910/8890 with a low here as I write this morning. Try longs with stop below 8870. USDCAD longs at 1.2645/35 worked on the bounce to targets of 1.2665 & 1.2690/1.2700. Now we have shorts at 1.2715/25. EURUSD we were short again at resistance at 1.1350/70 yesterday with a potential 70 pp profit on the slide to 1.1280. GBPUSD second chance to buy in to longs at 1.3170/50 yesterday, stop below 1.3120. GBPNZD broke first support at 1.9500/1.9480 targeting 1.9425/15 & second support at 1.9380/60. A low for the day here with longs already offered up to 100 pips profit. AUDUSD level of 7140/20 now acting as support to hit the next target of 7170/80. NZDUSD shorts at 6800/10 work on the slide to 6780 for only a small potential profit yesterday. USDJPY tested strong resistance at 113.60/70 this week but over ran to 113.90 before reversing. GBPCAD beat strong resistance at 1.6745/55 to hit the next target of 1.6815/20. EURGBP first support at 8500/95, second support at 8478/74. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Omicron, USDJPY, Gold, DXY highlighted in this Luke Suddards' piece

Omicron, USDJPY, Gold, DXY highlighted in this Luke Suddards' piece

Luke Suddards Luke Suddards 10.12.2021 15:15
Pfizer and BioNTech released the results of their recent laboratory study which found that their vaccine’s antibody response is capable of neutralizing omicron (levels similar to 2 doses against previous strains) after three doses. There was a more than 25-fold reduction in the efficacy of the vaccine however, showing the 32 mutations in omicron does certainly have an impact. The vaccine induced T cells are not affected by omicron and should therefore still provide protection from severe symptoms. To finish off a Japanese study showed that omicron was 4.2 times more transmissible than delta in its early stage. We know that omicron was far more transmissible already so this isn’t a major shock, however, the issue with higher transmissibility is the opportunity for further new variants to arise which (hopefully) will not increase in lethality. Dollar Index (DXY): The greenback is basically flat from where it started the week as traders remain hesitant to push price in a new direction until today’s CPI result is out the way. Omicron news as mentioned above has been on the positive side so risk-off flows derived from that side of things has been non-existent. However, where we could see more safe haven bids for the dollar is from any escalation in the Russia Ukraine tensions, with an invasion very likely seeing risk-off ensconcing markets. This would clearly benefit the dollar on the lhs of the smile (risk-off). Data wise, job numbers filled the rather quiet calendar throughout the week with vacancies reaching new records as well as jobless claims breaching the 200k mark, coming in at 184k. We also had bond auctions coming to the fore, beginning with the front end of the curve, 3-year auctions showed strong demand despite today’s inflation numbers; moving to the back end of the curve the 10-year also showed relatively robust demand. It was the 30-year bond which was very weak with yields spiking higher leading to fears over today’s inflation numbers being the main driver. Inflation numbers were smack bang in line with consensus at 6.8% YoY (highest since 1982) and 4.9% YoY for core. The initial market reaction saw the dollar softer as short term rates fell (clearly the market was positioned for 7%), but that initial dollar weakness is now being retraced as it's still a solid number (Fed won't change path) with prices increases broad based.  Next week the focus will be on the Fed meeting where the risks are definitely tilted towards the hawkish side for the dollar. (Source: TradingView - Past performance is not indicative of future performance.) The dollar is ever so slightly above its upper trend line and the 21-day EMA has provided good dynamic support. The RSI has bounced off the 55 support level too keeping the uptrend momentum in tact. There is some resistance at 96.5 to monitor and on the downside the 21-day EMA would be important to watch if price slides. EURUSD: The euro continues to tread water as it faces headwinds on multiple fronts. The week began with fairly positive ZEW sentiment reading with current conditions missing (expected with covid restrictions), but the main index reading more positive than expected. Olaf Scholz has now been inducted as Chancellor of Germany with the end of Merkel’s reign officially coming to an end. European gas has been soaring again as tensions between Russia and US led to reports than Biden could implement sanctions on Russia. Europe is highly exposed to the price of natural gas so this could be one to watch for sure. Next week sees a very important ECB meeting with a fresh set of economic projections out (I’ll be watching their inflation forecasts particularly) as well as insights into how they’ll navigate the completion of their PEPP programme and transition. I’ll be providing a preview next week.  (Source: TradingView - Past performance is not indicative of future performance.) EURUSD moves sideways with a slight tilt towards the downside capped by the overhead 21-day EMA. 1.135 resistance has formed as the one to watch. The price support at 1.125 should be on your radar too. The RSI has rolled over a touch and pointing lower. The former low around the lower trend line at 1.12 could be very important over the next week. GBPUSD: Sterling has been under pressure as multiple factors line up against it. The week began with centrist Ben Broadbent’s speech which didn’t drop any hints on what the BoE may do at their December meeting. UK GDP data was disappointing with missed expectations on a monthly time frame as well as YoY and 3-month average. Plan B restrictions have now been implemented - guidance to work from home from Monday, and an extension of face masks to most public indoor venues (public transport etc). Mandatory Covid-19 passes will now be needed for entry to places such as nightclubs and venues with large crowds. With Plan B restrictions and softer GDP data, markets are all but certain a BoE hike will not happen at next week’s meeting, opting to rather wait until February for a move. I’ll be providing a preview for this event, but we shouldn’t be getting any curve balls as expectations are widely baked in for no hike, leading to very muted reactions in GBP crosses if any. UK opinion polls have moved against Boris Johnson after the uproar caused by allegations of his rule breaking Christmas party. Labour is now ahead in a variety of polls, which hasn’t occurred for a long time. If the fallout continues the Conservative MPs may decide to trigger a vote of no confidence in him which may inject some political instability. Article 16 could be used as a deflection and distraction tactic to turn the spotlight away from himself. (Source: TradingView - Past performance is not indicative of future performance.) GBPUSD looks technically weak as it trades below the lower trend line of its descending channel. The RSI hovers just above oversold. 1.315 on the downside would be key for a move lower while 1.32.5 - 1.33 on the upside just below the 21-day EMA would be key. USDJPY: The yen continues to come under pressure as the US 10-year yield moves higher and risk sentiment leans on the positive side, reducing the need for risk-off hedges. Tensions over Russian invading Ukraine will need to be monitored though as this could see flows directed towards the yen. (Source: TradingView - Past performance is not indicative of future performance.) USDJPY continues to be bid around its 38.2% Fibonacci level and mini range support around 113.5. The 50-day SMA and 21-day EMA are bunched up right together on the price candles. The RSI edges above the 46 level of support. Targets wise, on the upside 114-114.5 will remain key while on the downside 112.5 will be important to watch. Gold: Omicron variant positive news flow is taking the allure away from gold for safe haven flows, however, rising tensions between the US and Russia is helping to offset that. Real yields have also been rising higher of late which will pressure gold as well as a stronger dollar. Gold is a tad stronger on the inflation release as traders had most likely positioned for a 7% print and this not being the case has led to some bids flowing through.  (Source: TradingView - Past performance is not indicative of future performance.) Gold remains trapped in a tight range with today's inflation data a potential catalyst for a more directional move. Price is now just above the $1775 support level. The RSI has turned back upwards, but remains in no-man's land. The important level on the upside will be $1800 just above all the key moving averages. Oil: Oil certainly saw some new hot money coming back in to drive the recent recovery up from the $68 support area. Beginning the week we saw Saudi Arabia decided to hike their selling price to Asia and the US, indicating that they believe demand will remain robust despite omicron restriction fears. So far omicron news has been positive enough not to lead to expectations of serious demand destruction. Plan B work from home guidance has probably led to some slight weakness in crude, but we’ll need to watch what airlines decided to do in the next few weeks for jet fuel demand. Official US inventory data showed a modest reduction in inventory levels, but nothing to get excited about. Iranian talks are continuing ahead with nothing of anything major to report back on (Source: TradingView - Past performance is not indicative of future performance.) Oil now between its 200-day SMA and the 21-day EMA, is looking for its next direction. Support comes in around $73.50 with the 200-dauy SMA just below there. On the upside $76 provides resistance aided by the 21-day EMA. The RSI, has turned upwards and will need to continue in that direction for bulls to be satisfied.
Market Quick Take - December 14, 2021

Market Quick Take - December 14, 2021

Saxo Strategy Team Saxo Strategy Team 14.12.2021 11:57
Macro 2021-12-14 08:35 6 minutes to read Summary:  Risk sentiment soured yesterday, with some attributing the market nervousness to uncertainty on how hawkish a pivot the Fed is set to make at the FOMC tomorrow, although Fed rate expectations for next year as expressed in the most liquid futures have eased from recent highs. That meeting is the most significant major macro event risk for the 2021 calendar year, although important ECB and BoE meetings are set for Thursday. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - yesterday was a very disappointing session for US technology stocks with Nasdaq 100 futures looking to push higher early during the session but ended on the lowest close in four trading sessions. Nasdaq 100 futures are trading around the 16,110 level this morning with the 50-day average around the 15,810 level as the key support level to watch on the downside should risk-off continue. EURUSD – the EURUSD supermajor continues to coil in a tight range ahead of the FOMC meeting tomorrow and ECB meeting on Thursday, both of which are set to bring refreshed forecasts for the economy and policy. The FOMC meeting is likely to carry more weight in terms of the market reaction, especially if the Fed waxes more hawkish than expected (more below) and takes Fed rate expectations for next year to new highs for the cycle. The lines in the sand on the chart include the 1.1186 lows of November, while the recent pivot highs of 1.1355 and 1.1384 bar the upside, with 1.1500 a more structural resistance/pivot zone. AUDUSD – watching the US dollar closely over the next couple of sessions, particularly in the wake of tomorrow’s FOMC meeting and what it brings in the way of a crystallization of the Fed’s hawkish shift (more below) and in the market reaction. If the meeting brings a spike in market volatility, traditionally risk-correlated currencies like the Aussie could show high beta to swings in the US dollar in either direction (I.e., if the Fed waxes more hawkish than expected and this triggers risk-off and a stronger USD). AUDUSD recently broke down through the prior 2021 lows near 0.7100 and tested the huge 0.7000 level before staging a sharp bounce. That 0.7000 level could serve as a kind of “bull-bear” line from here. Crude oil (OILUKFEB22 & OILUSJAN22) has settled into a relatively narrow range with Brent finding resistance at $76, the 21-day moving average while support remains the 200-day moving average at $73.15. OPEC in its monthly oil market report maintained their 4.2 million barrels per day demand growth outlook for 2022 with current omicron-related weakness being offset by a strong recovery during Q1. The Saudi energy minister said the energy transition will cause an oil-price spike later this decade while also warning traders against shorting the market at a time where large speculators have reduced their Brent crude oil long to a 13-month low. On tap today we have IEA’s Monthly Oil Market Report. Gold (XAUUSD) remains stuck just below its 200-day moving average at $1794 with focus on what 20 central bank meetings this week will deliver in terms of inflation fighting measures at a time where the omicron variant continues to cloud the economic outlook. With US inflation rising at the fastest pace since the 1980’s, Wednesday’s FOMC meeting remains the top event. The market is currently pricing in three rate hikes next year with the first one due around June. The other semi-investment metals of silver (XAGUSD) and platinum (XPTUSD) both struggling with the latter’s 850-dollar discount to gold, near a one year high, potentially deserving some attention. US Treasuries (TLH, TLT). The US yield curve bulled flatten yesterday with 10-year yields falling by 7bps to test support at 1.41%. To contribute to this move was news of the first omicron death in the UK, and the winding done of short US Treasury positions before the end of the year. Price action will remain volatile ahead of the Federal Reserve meeting, where Powell is expected to announce an acceleration of the pace of tapering. The focus is going to be also on the Dot plot, where longer term projections might be moved higher, pushing up the long part of the yield curve. However, long-term yields can move higher only that much, as omicron distortions will continue to keep them compressed. It looks likely that 10-year yields will continue to trade rangebound between 1.40% and 1.70% until the end of the year. European sovereign bonds (IS0L, BTP10). The Bund yield curve bull flattened yesterday led by safe-haven buying amid concerns over omicron. Italian BTPS gained the most as the market pushes back on interest rate hikes in 2022. The focus, however, continues to be on the ECB meeting on Thursday. An announcement of the end of the PEPP program in March 2022 is widely anticipated. What’s not clear is whether it will be announced that bond purchases will be compensated by another scheme, such as the APP. It is likely that the ECB will stall as members are torn between inflation and a new wave of Covid infections. If investors feel the support of the central bank is fading, European yields might resume their rise with the periphery and Italian BTPS leading the way. Yet, the move will be contained as yields will remain compressed by covid concerns. UK Gilts (IGLT, IGLS). The BOE might not deliver on a 10bps interest rate hike this week as members are divided concerning Covid restrictions. Michael Saunders, one of the most hawkish MPC members, said that he will need to think about it twice before voting for a rate hike. As expectations for interest rate hikes in the UK are the most aggressive among developed economies. It is possible that if the central bank does not hike, the Gilt yield curve will be steeping with short-term Gilts gaining the most as the market pushes back on next year’s rate expectations. What is going on? China reports first omicron variant case of covid - bringing fears of supply chain disruptions due to the country’s zero tolerance policy on virus cases that can mean profound shutdowns in response to outbreaks. Chinese property developers under new pressure, with the focus this time on Shimao Group Holdings, whose Hong-Kong listing is down over 75% this year and down over 30% over the last week on concerns that a deal between the company’s business units is a sign of financial stress for the company. The company’s 2030 USD-denominated bonds lost almost 13% overnight as the yield rose above 10%. Other Chinese property developer shares were also under pressure overnight. Tesla shares down 5% as growth stocks are under pressure. Tesla shares pushed below $1,000 yesterday adding further pressure to related assets in the Ark Innovation ETF and Bitcoin is also seen lower this morning. Elon Musk sold $907mn worth of shares yesterday according to a filing overnight in order to pay taxes on another round stock options that were exercised. Toyota finally pushes into EV. Japan’s largest carmaker wants to compete with Tesla and Volkswagen announcing $35bn of investments into battery electric vehicles showing the first sign that Toyota is acknowledging that this is the future of the industry. Toyota has so far pursued hybrids on the ground of being more economical, but this push into BEV with 30 new models validates BEVs once and for all, even though Toyota is still saying that it does not know which technology will win. US Harley-Davidson set to spin-off EV motorcycle unit – the plan to spin off Harley’s EV business via a SPAC saw Harley-Davidson shares spike 19% before surrendering most of the gains. Harley’s LiveWire EV business unit will combine with SPAC AEA-Bridges Impact to form a new publicly traded company. The move is meant to take advantage of the premium the market is willing to pay for pure-play EV companies. EU diplomats suggest time running out on Iran nuclear deal - as Iran is progressing rapidly toward enriching uranium for potential use in nuclear weapons. The diplomats worry that without a breakthrough soon, the original 2015 agreement “will very soon become an empty shell.” What are we watching next? The Wednesday FOMC as the year’s final major macro event risk. The FOMC meeting tomorrow is set to bring a very different monetary policy statement from the prior statement after the Fed’s clear pivot to inflation fighting mode. As well, the meeting will see an update of economic forecasts and interest rate policy forecasts (the “dot plot” in which 19 Fed members forecast where the Fed funds rate will likely be in 2022-24 and in the longer term). Most interesting will be the degree to which Fed members have raised their policy rate forecasts relative to what the market is predicting, which is for just under three rate hikes through the end of next year. Prior forecasts have generally come in lower than market expectations. The baseline expectation for the pace of QE “tapering”, or slowing of purchases, is that the Fed will double the pace of tapering, which would mean the Fed’s balance sheet is set to stop growing by the end of March. Anything that suggests a faster pace of tapering than this doubling (for example, a promise to wind down before March) and that hints that a hike at the March FOMC meeting is possible would be a hawkish surprise. The European Council meets on Thursday, and apart from having to deal with Covid-19 and the Russian threat on its eastern borders, the council is also set to decide whether investments in gas and nuclear energy should be labelled climate friendly. The design of the EU green investment classification system is closely watched by investors worldwide and could potentially attract billions of euros in private finance to help the green transition, especially given the need to reduce the usage of coal, the biggest polluter. Earnings Watch – the earnings calendar is getting very thin this week and no major earnings expected today. Wednesday: Inditex, Toro, Lennar, Heico, Trip.com, Nordson Thursday: FedEx, Adobe, Accenture Economic calendar highlights for today (times GMT) 0830 – Sweden Nov. CPI 1000 – Euro Zone Oct. Industrial Production 1100 – US Nov. NFIB Small Business Optimism 1300 – Hungary Central Bank Rate Decision 1330 – US Nov. PPI 1900 – New Zealand RBNZ Governor Orr before parliament committee 2130 – API Weekly Report on US Oil and Fuel Inventories 2330 – Australia Dec. Westpac Consumer Confidence 0200 – China Nov. Retail Sales 0200 – China Nov. Industrial Production During the day: IEA’s Monthly Oil Market Report   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher
Market Quick Take - December 10, 2021

Market Quick Take - December 10, 2021

Saxo Strategy Team Saxo Strategy Team 10.12.2021 12:10
Macro 2021-12-10 08:30 6 minutes to read Summary:  Risk sentiment has consolidated after sharp gains earlier this week as the market nervously eyes the US November CPI release today from the US and whether this will trigger a more hawkish FOMC meeting next week. The US White House has already been out attempting damage control from the inflation headlines today, saying that the data will not reflect recent declines in gasoline and other prices.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - US equities and particularly tech stocks consolidated a significant chunk of the sharp gains from earlier this week, with speculative sectors getting the worst of it on the day, although most stocks were down on the day. A high US November CPI release today could spook investors as it would raise the anticipation of an even more hawkish FOMC meeting next week. EURUSD – The EURUSD rally attempt from Wednesday faltered in what now looks a mere tactical squeeze ahead of today’s US November CPI report (more below). Given that the slide in EURUSD has largely tracked with the rise in Fed expectations, the degree to which those expectations are adjusted higher or lower in the wake of today’s US CPI data and then next week in the wake of the FOMC meeting Wednesday and ECB meeting Thursday will likely correlate with EURUSD direction, where the focus is on the cycle lows just below 1.1200 for a possible run at 1.1000 on a break lower and the tactical pivot high near 1.1380. USDJPY and JPY crosses – the omicron variant news of some two weeks ago triggered a huge slide in USDJPY just after it was trying to engineer a break above multi-year highs near 114-50. Similar to developments in crude oil and longer US yields, USDJPY has failed to get back to the upper reaches of the recent range since that sell-off, which bottomed out near the 112.50 area – the current trigger zone for a possible further sell-off wave (most like in a scenario of cratering risk sentiment and US treasuries serving as a safe-haven) that could poke at the important 111.00-50 downside pivot zone. Elsewhere, JPY crosses backed up very sharply this week on hopes that the omicron variant will prove mild and won’t impact the growth outlook, but the scale of the rally or squeeze has been modest relative to the prior sell-off. Watching areas like 127.50-128.00 in EURJPY and 79.00 in AUDJPY in coming sessions for whether another wave of JPY strength is in the cards. Crude oil’s (OILUKFEB22 & OILUSJAN22) week-long rally hit the buffers yesterday with Brent and WTI retracing back towards support at their 200-day moving averages at $73 and $69.80 respectively. A study finding the omicron variant is 4.2 times more transmissible than the delta combined with new restrictions among several nations helped weaken the sentiment, and with end of year approaching many traders are increasingly becoming more risk adverse, potentially leading to more fluctuations. Focus today on omicron news, US inflation data and whether the mentioned support level can be maintained. Wheat (WHEATMAR22 & ZWH2) trades near five-week low following three days of losses which accelerated yesterday after the USDA raised its outlook for global stocks. The 3% drop in Chicago also helped drag down the recent highflyers futures for Kansas and Paris milling wheat. Global stock levels at the end of the 2022-23 season received a boost from production upgrades in Russian (1mt) and Australian (2.5mt) while US export slowed with high prices curbing demand. US Treasuries (TLH, TLT).  Yesterday’s 30-year auction showed that the market is not willing to buy long-term US Treasuries at current low yields. The 30-year auction was priced with a high yield of 1.895%, tailing by 3.2bps. Although the tail was smaller than last month’s 5.2bps, it would have been enough to cause a selloff in long-term Treasuries. However, covid distortions kept yields compressed, hence volatility in rates was avoided. Today’s CPI numbers are in focus as a high number is likely to contribute to more upward pressure in the yield curve. What is going on? The US White House was already out attempting damage control on inflation before today’s CPI release. A White House official, economic adviser Brian Deese, was out late yesterday saying that today’s US November CPI release won’t reflect recent drops in the price of key commodities, especially gasoline and natural gas as it is “backward looking”. China property developers formally declared to have defaulted - as Fitch Ratings noted missed interest payments on Evergrande and Kaisa Group Holdings USD bonds as it downgraded these issues to restricted default. USDCNY and USDCNH bounce sharply a day after posting new low for the year - China fixed the USDCNY level at a far weaker level than expected and announced an FX reserve ratio increase to 9%, forcing domestic banks to maintain higher reserves of foreign currencies.  These are rather obvious signals that China would like to avoid a further rise in its currency after a powerful and broad rally that saw both the offshore and onshore yuan posting new highs for the US dollar for the year just this Wednesday. Bitcoin and other cryptocurrencies close sharply lower – with Bitcoin closing at its lowest levels on a weekday since September. Technically, the 40-45k zone looks important for avoiding a more significant capitulation lower after the recent weekend meltdown that took the price some 20% lower to below 43k before support was found. According to coinmarketcap.com, the market cap of the nearly 15.5k cryptocurrencies is currently near $2.26 trillion after peaking near $2.93 trillion in November, a drawdown of over 22%. What are we watching next? US November CPI data release today, expected at 6.8% year-on-year for the headline number and 4.9% at the core, both of which would be the highest readings in decades. Given that expectations are so high, would a slightly hotter than expected number move the needle on a Friday ahead of next week’s important FOMC meeting? A significant beat to the upside just might make a difference, given that the Fed has clearly made a shift toward fighting inflation and would probably need to bring a March 2022 rate hike possibility into its forward guidance. Fed rate expectations for next year are poised near the high for the cycle, suggesting a 0.8% Fed Funds rate (vs. currently 0-0.25%) is priced in through the December 2022 Fed meeting. The EU is set to decide by December 22 whether investments in gas and nuclear energy should be labelled climate friendly. The design of the EU green investment classification system is closely watched by investors worldwide and could potentially attract billions of euros in private finance to help the green transition, especially given the need to reduce the usage of coal, the biggest polluter. Economic calendar highlights for today (times GMT) 0905 – ECB President Lagarde, others speaking at panel discussion1300 - Poland National Bank of Poland meeting minutes1330 – US Nov. CPI1500 – US Dec. Preliminary University of Michigan Sentiment Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple Spotify Soundcloud Sticher
A quick story before we start

A quick story before we start

Brent Donnelly Brent Donnelly 16.12.2021 15:18
FAIRFIELD COUNTY, CONNECTICUT May 6, 2010 4:55AM The Connecticut air is cold and damp. The trader moves in silence. He steps quietly through the pitch-black darkness of his Victorian McMansion and toward the door. As he disarms the home security system, the BEEP BEEP BEEP of the keypad code he enters is impossibly loud in the quiet of the pre-dawn morning. He steps out of the house, closes and locks the door, and hops into his car. As he rolls down the driveway and into the foggy morning, he inserts a Deadmau5 CD and blasts it at high volume in an effort to wake up and get pumped for another day of trading. But this will not just be another day of trading. This will be one of the most insane trading days of his career. It has been a frustrating year so far. The Eurozone Crisis has been smoldering for months but the trader’s attempts to sell the euro have been met with massive countertrend rallies as the Fed embarks on another round of USD-negative quantitative easing (QE). They call EURUSD a collision of two garbage trucks. The trader struggles to steer clear of the wreckage. His strongest view recently has been lower USDJPY. There is risk aversion popping up all over the place as markets worry about a domino effect where Greece crashes out of the Eurozone, followed by Spain, Portugal, Ireland and then finally Italy. Everyone is bearish stocks as the S&P 500 rally from 666 in March 2009 to 1050 now is seen as a mirage; the side effect of a money printing magic trick performed by central bankers. Totally unsustainable. EURUSD opened the year at 1.4500 and now trades sub-1.25 so the short trade is hard to stomach. Even when you know it’s the right thing to do, it takes a lot of courage to sell something down >15%. So the trader has shifted his attention to USDJPY and he expects it to go substantially lower as global risk aversion remains elevated and safe haven currencies like the yen should find demand. USDJPY has been inexplicably well-bid given recent risk aversion and the Fed “money printing”. It just rallied from 90 to 94 on air over the last two weeks. Meanwhile, the best leading indicator for USDJPY is always US bond yields and they have been plummeting for a month. USDJPY looks completely wrong. The trader stares at the following chart, which shows US 10-year bond yields and USDJPY. The black bars are USDJPY and the dotted line shows US bond yields. Note they usually follow in lockstep. The divergence is a strong signal to the trader that he should be short USDJPY. USDJPY vs. US 10-year rates November 2009 to May 5, 2010 The chart covers the period up to May 5. This story takes place May 6. Chart courtesy of Refinitiv. If you look in the top right corner, you can see that USDJPY is a bit off the highs, but not much. Two days in a row, the high has been 94.99 and USDJPY is now bouncing aimlessly around 93.80 as he rolls into the hedge fund parking lot. It is still early so there are only three Porsche 911s in the lot right now. More will arrive later. This USDJPY trade has been tiring and painful as the trader got short at 94.00 with a stop loss at 95.05 and those two daily highs mean he has come within a hair (6 pips, or 0.064%) of getting stopped out, two days in a row. Holding on to a trade like this is exhausting as his fight-or-flight stress system remains activated for long stretches. Cortisol overload. Now, he can relax a bit and let things play out. His target is 91.00. Average daily range has been about 1 yen (100 pips) lately so he figures we might get there in the next week or so. 10:45 AM It has been a boring morning with USDJPY in a tight range. The sun comes out and it’s almost shorts weather outside so the trader decides to go for a run before lunch. Less than a mile into his run, he gets his first indication that this is not a random, ordinary day. His Blackberry rings. Bank sales on the line to tell him that USDJPY has just dumped 100 points in 15 minutes. Trading 92.80 now… Odd. He turns around and sprints back to the office, Spidey-sense tingling. By the time he grabs a quick shower and returns to the desk, USDJPY is 91.50. He is short $100 million USDJPY so that puts his profit (aka P&L or profit and loss) around +$2.8 million on the day. That’s more P&L than this trader typically makes in an excellent month. A huge haul. He scans the headlines and Bloomberg chats and finds no good explanation for what is going on. The stock market is down, but not enough to explain the move in USDJPY. This makes no sense. When a trade shows a big profit that makes no sense, he likes to cover it and move on. The trader buys 100 million USDJPY at 91.50. He is back to flat with no position and nearly 3 bucks of P&L in the bank. He sits there calmly and processes what has happened. He allows himself to feel happy, just for a second. He stuck to his plan and had the patience to sit with a decent-sized position for three days. He relaxes and basks in the satisfaction of a job well done. Then… Some dumb voice in his brain says: 2.8 million dollars is an amazing day. But... Maybe I can make 5 million today? And his hands, as if possessed by some mischievous or evil force, move slowly toward the BUY and SELL buttons. For no reason. And like a moron… He goes long USDJPY. First, he buys $50 million at 91.50 and then another $50 million at 91.25. These are impulsive trades with no rationale. His planned stop loss is 90.85 but before he has time to input a stop loss order, he notices S&Ps lurch lower on a huge volume surge. He puts on his headset and fires up the S&P squawk to see what’s going on. [If you want to hear the soundtrack to what happens next, Google “Flash crash stock market 2010 squawk” and select one of the YouTube replay videos] The announcer’s voice is strained as he narrates an unexplained fall in stocks from 1150 to 1120. USDJPY skips through 91.00 and the trader’s P&L shrinks to $2.0 million. He tries to sell at 90.80 and whiffs. USDJPY is suddenly in freefall. 90.10 trades. 90.00 breaks. USDJPY has just dropped more than four percent in a few hours. A monster move. The trader’s eyes flick over to his P&L which has now shrunk back to six digits. Two-thirds of three days’ work, gone in 60 seconds. And then… Stocks sell off hard out of nowhere. Like… REALLY HARD. The S&P squawk guy is losing it. Screaming. 1100 breaks in the S&P. 1080, 1070, 1060. USDJPY is a waterfall. The squawk loses his mind as he yells: “We have some BIG paper sellers here… 7 evens are trading. 6 evens are trading! 5 EVENS ARE TRADING!!! New lows here…” USDJPY breaks 89.00 and the trader has still sold only 23 million USD, leaving him stuck with a position of 77 million USD. It is a fast market, nearly impossible to transact. He picks up a phone to two different banks and neither one answers. He tries to hit the 88.60 and gets a reject notice from the aggregator. The price feed is stale and crossed now; it shows 89.00 / 88.10, which is not possible. The trader is now down on the day. In the red. His face is hot and feels red like his P&L. Urge to slam fist on desk is rising. The trader feels like he is falling, falling::::::::::::::::::::in cinematic slow-mo. USDJPY stabilizes a bit even as the S&P squawk continues to go nuts. “65 even offered! 60 trades… 60 even bid, this is the widest we have seen in years,” his voice cracks, he’s yelling like the announcer at Churchill Downs as the horses turn for the stretch. “60s trading! 50s trading! 50 at 70 now! We are twenty wide!” 1060 trades in S&Ps now, down just about 10% today, on zero news. Nobody knows what the hell is going on and there is panic in the air. The squawk dude continues to scream. He is pouring gasoline on the trader’s agitation. The trader’s P&L is now six figures in the red. Sadness. Anger. He is furious with himself because he had the right trade, waited patiently for almost three days for it to work, caught the move perfectly according to plan … And then flipped the other way on a whim, for no reason and gave everything and more back in half an hour. $2.8 million is a good month for this trader. He just made and lost that much in less than two hours. I am an idiot. How did I get into this mess? He needs to make a decision here and quick but he realizes that he is flooded. It is impossible to make a good trading decision when you’re flooded. He needs a second to clear his mind. He tears off the headphones, drops them on his desk, and stands up. He walks over to the window and tries to find a moment of lucid calm. He has been through these emotional storms before and knows how to get back to shore. He stares over the waters of the Long Island Sound. Gradually, his heart rate lowers. Clarity slowly, slowwwwly returns. His lizard brain retreats and his rational mind takes over. He talks to himself: It doesn’t matter how you got here. What are you going to do about it? 88.00 was the low in March. It’s a massive level. The panic is fading. USDJPY is down 700 points in two days and now bonds are reversing lower. This is the place to buy USDJPY, not sell. He returns to his keyboard, puts his headphones back on. The squawk guy has stopped screaming. He is noticeably more composed. S&P futures have bottomed within a whisker of limit down. They are stable but have not rebounded significantly. The bid/offer is super wide so it’s hard to tell whether they are moving higher or just bouncing along the bottom. The trader looks around the room and sees the panic and electricity levels have dropped. Not as many phones are ringing. Voices in the room are no longer frantic. He buys 50 million USDJPY at 88.85. And another 73 million at 88.95. Max long now, long $200 million USDJPY. But this time it’s thought out, not random, and he feels good about what he is doing. He feels confident but fully in control. He calmly thinks forward: USDJPY could easily rally to 92.50 from here. When you catch a turn like this, you can be greedy. He leaves a stop loss for half his position (sell 100 million USDJPY at 87.94) and then sits back to let things play out. He has his plan and now he knows all he can do is watch and see if it works. There is one more frenetic whipsaw and USDJPY briefly prints to a low of 87.95. One pip from his 100 million USD stop loss. Amazing luck. Seconds later, stocks stabilize, and then it’s like everyone realizes all at once that whatever the heck just happened… It’s over. USDJPY is paid at 88.70, then up through 89.50. It breaks 90.00 and as it hits 90.40, the trader flicks his eyes to the P&L. It is almost exactly back to the level where it peaked earlier: $2.8 million. He praises the trading gods and squares up. NICE! Too bad he didn’t stick with his plan on the way back up, either. A few hours later, USDJPY hit the trader’s original target of 92.50. Here’s the chart of USDJPY that day: USDJPY May 3-7, 2010 (US stock market Flash Crash was May 6) The trader made a multitude of both good and bad decisions in the three hours around the 2010 Flash Crash. The trading described in this story is a microcosm of everything that can go right and wrong in trading. Traders make good, careful decisions and get rewarded, they make bad decisions and get punished … but then sometimes a good decision leads to a bad outcome … or a bad decision is rescued by good luck. Every trader is a steaming hot bowl of bias stew and must maintain self-awareness and lucidity behind the screens as the trading day oscillates between boredom and terror. That story of the 2010 Flash Crash, just like this book, is all about the razor thin line that separates success and failure in trading. Alpha Trader is written to help you understand markets but also, more importantly, to help you better understand yourself as a trader. It is about great decisions and dumb mistakes. It is about how to be rational and why smart people do stupid things. All the time. The book is written for traders at every skill level. I wrote it to be understood by noobs, but I also aimed to write something that will resonate with experienced trading professionals. Alpha Traders are smart, rational, disciplined, flexible, patient, and aggressive… They have the endurance to handle unending ups, downs, hills, and valleys. They come in fired up each day to solve the ultimate puzzle and they get paid incredibly well if they succeed. Alpha Traders work hard (even when they don’t feel like it), seek to continuously improve, and love markets more than they love money. Thank you for taking the time to read my book. I hope you find it entertaining and useful. I hope it helps you unlock your maximum trading potential. By the way, I plan to publish future updates, fresh trading stories and new lessons, tactics and strategies, exclusively for readers of Alpha Trader. If you are interested, please sign up at brentdonnelly.com. Enjoy. /Brent
ECB Quick Analysis: Tapering still leaves Lagarde as the laggard, EUR/USD could turn down

ECB Quick Analysis: Tapering still leaves Lagarde as the laggard, EUR/USD could turn down

FXStreet News FXStreet News 16.12.2021 16:06
The ECB has announced the end of its special PEPP bond-buying scheme in March. Raising the volume of the APP scheme is limited and set to be reduced. Other central banks remain well ahead of the ECB, potentially limiting the euro's rise. A wise owl – that is what European Central Bank Christine Lagarde aspires to be. Her latest move seems to have met that desire, as the ECB all but tapers its bond-buying schemes, following others' footsteps. The Frankfurt-based institution will wind down its Pandemic Emergency Purchase Program (PEPP) in March 2022, two years after its launch. On the other hand, it will expand its regular Asset Purchase Program to €40 billion in the second quarter – but already pre-announced it would squeeze to €30 billion in the third quarter. In other words: tapering. Buying fewer bonds and creating more fewer euros is positive for the common currency, and that explains the 30-pip jump. However, the ECB has stiff competition. The move comes just the Federal Reserve's decision to double its tapering pace to $30 billion/month and projection of three hikes in 2022. The Bank of England surprised markets by announcing a 15bp rate hike – just 45 minutes ahead of the ECB. In the second quarter of 2022, the ECB would still be buying bonds while the Fed would already move toward raising rates and the BOE could be after its second or third move. Investors are unlikely to wait for that to happen before acting. The euro's relative disadvantage does not solely stem from central banks' intentions but from the underlying economic situation. The ECB continues labeling inflation as transitory, and for good reasons. Core inflation is roughly half that in the US, and skewed to the upside by German VAT changes. Europe is more economically sensitive to covid than the US. These gaps, which brought EUR/USD down in recent months, could return to push EUR/USD lower. This current advance could turn into a selling opportunity.
Intraday Market Analysis: USD Weakens Across The Board

Intraday Market Analysis: USD Weakens Across The Board

John Benjamin John Benjamin 17.12.2021 08:56
EURUSD tests key supply zone The euro jumped after the ECB announced it will cut its bond-buying program. The pair’s latest retreat seems to have been an accumulation phase for the bulls. Strong buying interest lies in the demand zone around 1.1230. A break above 1.1320 has put buyers back in the control room. 1.1380 from a previously botched reversal attempt is a major hurdle ahead. Its breach may trigger an extended rally towards 1.1460. The RSI’s overextended situation has caused a brief pullback with 1.1270 as a key support. GBPUSD attempts bullish reversal Sterling surged after the Bank of England raised its interest rates to 0.25%. The pound has been treading water above 1.3170. The sellers’ struggle to push lower and the buyers’ attempts above 1.3260 suggest that the mood could be improving. A break above 1.3300 has prompted the bears to cover, attracting momentum traders in the process with 1.3440 as the next target. That said, an overbought RSI may cause a temporary pullback as intraday traders take profit. 1.3260 has become the closest support. NZDUSD breaks resistance The New Zealand dollar rallied as risk sentiment made its return post-FOMC. A bullish RSI divergence indicates a deceleration in the sell-off momentum. The long candle wick from 0.6700 suggests solid buying interest. Then a break above 0.6800 has put the last sellers under pressure. An overbought RSI has limited the initial surge. A pullback may test 0.6755, previously a resistance that has turned into a support. 0.6860 near the 30-day moving average is the next hurdle, and its breach could trigger a bullish reversal.
Having A Look At The Markets Considering Tensions, COVID-19 And National Banks Decisions

EURUSD consolidates before further decline

Alex Kuptsikevich Alex Kuptsikevich 22.12.2021 15:06
The main currency market pair, EURUSD, is trading in a sideways pattern of around 100 pips, rarely breaking out of it for long. The observed balance is very fragile. The news backdrop from Europe and the US has been very mixed regarding monetary policy and overall demand for risky assets. When we look at the situation from a short-term perspective, the fundamental analysis is clearly against the Euro for now. Officially, the ECB has not backed down from its position that inflation is temporary, in stark contrast to the reversal of rhetoric and the acceleration of tapering from the Fed. From this perspective, the Eurozone’s lag in the rate hike cycle has so far only increased, which should reduce interest in the region’s bonds and put pressure on the Euro. It seems that on the Euro’s side now is profit-taking from short sells after it has weakened by 8% and 6.5% against the Dollar and the Pound so far this year. Also supporting the single currency could be the expectation that monetary tightening in the US, Britain, and a host of emerging economies will keep inflationary pressures in check, allowing the ECB to do its bit. However, it is more likely that the current lull in EURUSD is only a temporary balance of power, which will be broken at the start of the new year as big players return to the market with ideas for new trades. The pause in the EURUSD decline observed in recent weeks is not a sign of ironclad support in the Euro at current levels. Instead, it is a local retracement of positions. And, after a pause, EURUSD will head further down to the multi-year lows at 1.05-1.07.
GBPUSD arouses interest, EURUSD is consolidating near June 2020's lows

GBPUSD arouses interest, EURUSD is consolidating near June 2020's lows

John Benjamin John Benjamin 23.12.2021 08:53
EURUSD tests resistance The US dollar stalled over improved risk appetite. The pair is consolidating near June 2020’s lows. A bearish breakout would further extend the downtrend. The euro so far has found buyers at 1.1235. The bulls need to lift offers around 1.1360, the upper band of the recent consolidation range, before they could hope for a reversal. An extended rally may send the price to 1.1460. In the meantime, the RSI’s overbought situation could briefly limit the bullish push as intraday traders take profit near the resistance. GBPUSD makes a bullish attempt The sterling surged after Britain’s economy showed solid growth in Q3. A previous rebound to the supply zone near 1.3370 has put pressure on the short side. Then the pound found bids at 1.3170. Four attempts at this key support suggest a strong interest in keeping the price steady. 1.3370 is a major hurdle as it coincides with the 30-day moving average. A breakout could initiate a bullish reversal and propel the pound to 1.3500. An overbought RSI may cause a short pullback with 1.3240 as the closest support. USOIL awaits breakout WTI crude found support from a larger-than-expected decline in US inventories. Price action saw active buying above 66.00, keeping the early December rally valid in the process. The latest rebound is testing the supply zone around 73.30, which sits along the 30-day moving average. A close above this area of interest would force the bears to cover, paving the way for a rally towards 78.00. On the downside, 71.00 is the immediate support. And 68.50 is a second line of defense in case of a deeper correction.
XAUUSD seeks support, NZDUSD consolidates recent gains, EURUSD tests important resistance

XAUUSD seeks support, NZDUSD consolidates recent gains, EURUSD tests important resistance

John Benjamin John Benjamin 29.12.2021 08:42
EURUSD tests important resistance The US dollar struggles as the Omicron scare subsides. The pair has been stuck in a narrow range between 1.1230 and 1.1360, because of a lack of liquidity and a catalyst. Following a bounce from 1.1260 price action is testing the upper band of the horizontal consolidation. A bullish breakout would pop up volatility as sellers rush for the exit. An extended rally would set 1.1450 as the next target. On the downside, a fall below 1.1260 may prolong the sideways action for a few more days. NZDUSD consolidates recent gains The New Zealand dollar softens over a limited year-end risk appetite. The latest surge above 0.6830 has put the bears on the defensive. Intraday traders took profit after the RSI showed overextension. The current flag-shaped consolidation could be an opportunity for the bulls to regroup and catch their breath. The demand zone around 0.6760 is a major level to support the rebound. On the upside, 0.6840 on the 30-day moving average is the closest resistance. And its breach may trigger a broader rally towards 0.6920. XAUUSD seeks support Gold edged higher as the US dollar slipped across the board. A close above the supply zone around 1815 is a short-term confirmation that sentiment favors the upside. A bullish MA cross on the hourly chart indicates that the recovery could be picking up steam. Above 1820, 1840 would be the target when momentum makes its way back into the market. In the meantime, buyers may see a retracement to 1803 as an opportunity to buy the dip after the RSI returned to the neutrality area. 1790 is a second level of support.
Bitcoin (BTC), Fed, US Jobs Data, OPEC and EURUSD. What they all have in common? They’re mentioned in Swissquote’s video!

Bitcoin (BTC), Fed, US Jobs Data, OPEC and EURUSD. What they all have in common? They’re mentioned in Swissquote’s video!

Swissquote Bank Swissquote Bank 05.01.2022 14:25
Market mood turned sour in the US trading yesterday, and the latest data showed that 4.5 million Americans quit their jobs in November. 4.5 million is a lot of job departures, but there is nothing the Federal Reserve (Fed) could do about it, as the root cause of the problem is not the lack of job openings. Today’s ADP data is expected to reveal that the US economy added 400’000 private jobs in December. That would be less than a tenth of what has been lost in November. So the question is, does the jobs data even matter anymore? US equity indices retreated yesterday, and yesterday’s price action is mostly driven by higher interest rate expectations. In the forex, the US dollar remains strong, and that strength is pushing the EURUSD below the 1.13 mark. The sterling bulls, however, defend well their territory against a broadly stronger US dollar and a push above the 100-DMA, near the 1.3560 mark, should throw a basis to a medium term bullish reversal in Cable. In cryptocurrencies, appetite in Bitcoin remains contained near the 200-dma and the coin is testing the low end of the December horizontal channel base, which is near $45K level. One explanation for the lack of appetite is the rising US yields, which are applying a visible downside pressure on the pricing of cryptocurrencies. And gold is now trading above both its 50, 100 and 200-DMA, but the positive attempt to the $1830 level remained short-lived. It will be interesting to see how the rising US yields, which increases the opportunity cost of holding the non-interest-bearing gold, will play out in the coming months for gold investors. Watch the full episode to find out more!
USD to CAD chart is (probably as expected) linked with jobs stats

USD to CAD chart is (probably as expected) linked with jobs stats

John Benjamin John Benjamin 10.01.2022 10:30
EURUSD tests key resistance The US dollar retreated after December’s nonfarm payrolls came in far below expectations. The pair has been in a narrowing range between 1.1270 and 1.1365. The previous fall below 1.1280 added pressure on the buy side, though it turned out to be an opportunity for the bulls to accumulate at a bargain. A break above the resistance could end the sideways action and trigger a runaway rally towards 1.1460. The RSI surged into the overbought area and may cause a brief pullback above 1.1295. USDCAD tests daily support The loonie rallied after Canada added twice as many jobs as expected in December. The year-end sell-off met strong bids near the daily support at 1.2620. But the rebound came to halt at the supply zone around 1.2810, which used to be a support from the previous consolidation. The RSI’s double top in the overbought zone has restrained the upward momentum. 1.2730 is a fresh resistance as price action is about to retest the critical level at 1.2620. A bearish breakout could trigger a plunge to 1.2540. GER 40 seeks support The Dax 40 edged lower as rising CPI in the eurozone argues in favor of tightening. The index saw stiff selling pressure right under the all-time high at 16300. A bearish RSI divergence in this major supply area indicates a lack of commitment from the bulls as buying slows down. A combination of profit-taking and fresh selling has led to a drop below 16100, a warning sign for a steeper correction. 15800 is the next key support. A breakout could send the index to 15500 at the base of the latest rally.
Next Rate Hikes In The USA Ahead. Update on Dollar Index (DXY)

Next Rate Hikes In The USA Ahead. Update on Dollar Index (DXY)

Alex Kuptsikevich Alex Kuptsikevich 13.01.2022 09:55
Fundamental and technical factors on the dollar locally give opposite signals. However, after a long period of strengthening the American currency, a corrective DXY pullback looks like a logical short-term prospect. On Wednesday, the US dollar came under pressure, the sharpest loss since last May and coming out of a prolonged consolidation. The dollar index retreated below 95 for the first time in two months. EURUSD surpassed 1.1400, trading at 1.1440 at the time of writing, having consolidated beyond the narrow range where the pair had spent the previous almost two months. Often such a decisive move out of the range is followed by a further breakout move, which we may well see in the coming days. The Dollar Index closed below the 50-day moving average on Tuesday and made a further move lower on Wednesday. The fall out of the range gave an informal start to the correction after the rally from May through most of November and the sideways movement in December. A potential target for such a pullback is seen in the 93.50-94.00 area. Near 94 is the 61.8% Fibonacci retracement of the dollar's move amplitude in 2021 and the starting point of the last rally in November. Near 93.50, the peak area of the index last year could be equally strong support. It hardly makes sense to say now that we are seeing the start of a big wave of dollar decline, as solid fundamentals support its growth. It looks like Fed members started a competition on whose expectations and comments are the most hawkish, and consumer inflation has given little reason to change the rhetoric. Among the latest comments is Powell's reassurance that the economy can cope with rate hikes. Fighting inflation is a top priority for the US central bank. Mary Daly, president of the Federal Reserve Bank of San Francisco, predicts a first rate hike as early as March. This practically rules out a pause between the end of balance buying and the first policy tightening. Furthermore, there are increasing signs that rate increases can continue to occur more frequently than once a quarter, as was the case in the previous tightening cycle. Many other central banks in developed countries are not yet prepared to tighten their policies as vigorously, which generally creates a sustained pull towards the USD on the interest rate differential in its favour.
Tension Beetween Ukraine And Russia Definetely Shaped News In Recent Days

EUR/USD Forecast: Poor US employment-related data undermines dollar’s demand

FXStreet News FXStreet News 20.01.2022 15:58
EUR/USD Current Price: 1.1351 The EU December Consumer Price Index was confirmed at 5% YoY, as previously estimated. US Initial Jobless Claims unexpectedly jumped to 286K in the week ended January 7. EUR/USD bounces from its intraday low but maintains a neutral stance in the near term. The EUR/USD pair eased from an intraday peak of 1.1368, trading in the 1.1350 area heading into the US opening. The greenback trades mixed across the FX board, weaker against commodity-linked currencies but grinding higher vs its European rivals. Financial markets are quieter on Thursday, with European stocks struggling for direction but stuck around their opening levels. The EU published the December Consumer Price Index, which was confirmed at 5% YoY, while the core reading met the preliminary estimate posting 2.6%. Also, the European Central Bank posted the Accounts of its latest meeting, which showed that policymakers are aware of a possible "higher for longer" inflation scenario. The US published Initial Jobless Claims for the week ended January 7, which unexpectedly jumped to 286K, much worse than the 220K expected. The Philadelphia Fed Manufacturing Survey surged from 15.4 to 23.2 in January, beating expectations. The news put some pressure on the greenback, now recovering from its daily low at 1.1330. EUR/USD short-term technical outlook The EUR/USD pair could resume its decline in the upcoming sessions, as there are no technical signs of buying interest. The daily chart shows that the pair is incapable of advancing beyond a flat 20 SMA for a second consecutive day, while the Momentum indicator heads lower within negative levels. Additionally, the RSI is stable, although around 49. Meanwhile, the pair keeps trading between Fibonacci levels, with immediate support at 1.1305, the 23.6% retracement of the 1.1691/1.1185 slide. The 38.2% retracement is located at 1.1385, providing strong resistance since mid-November. In the near term, and according to the 4-hour chart, the pair maintains a neutral-to-bearish stance, trading below a firmly bearish 20 SMA but between directionless 100 and 200 SMA. Technical indicators, in the meantime, remain within negative levels, the Momentum advancing but the RSI flat at around 44. Support levels: 1.1305 1.1260 1.1220 Resistance levels: 1.1385 1.1440 1.1485
EURUSD, EURCHF and US 30 Chart Don't Show Spectacular Fluctations

EURUSD, EURCHF and US 30 Chart Don't Show Spectacular Fluctations

John Benjamin John Benjamin 26.01.2022 08:44
EURUSD grinds daily support The US dollar inches lower as traders take profit ahead of the Fed meeting. The euro’s struggle to stay above 1.1360 indicates buyers’ weak interest in holding onto previous gains. The latest rebounds have failed to clear the former support that has turned into a resistance. A break below the previous consolidation range and daily support (1.1280) could send the pair to 1.1235. The RSI’s oversold situation attracted some buying interest. But the bulls will need to lift 1.1360 first before a reversal could become a reality. EURCHF attempts reversal The safe-haven Swiss franc retreats as global panic selling takes a breather. A bullish RSI divergence shows a slowdown in the sell-off momentum. Then a rally above 1.0355 has prompted some sellers to cover, taking the heat off the single currency. A bullish MA cross is an encouraging sign for a reversal. 1.0400 is the next hurdle and its breach could be a turning point for traders’ sentiment and a launchpad towards 1.0480. On the downside, 1.0340 is fresh support and then 1.0300 a critical floor to safeguard the rebound. US 30 hits last major support The Dow Jones 30 recoups losses as traders await details on the Fed’s monetary tightening. Breaks below daily supports at 34700 and 34000 have forced buyers to liquidate in bulk. The index saw bids at last June’s low (33200) while the RSI sank into the oversold area on the daily chart. As the quote stabilizes, traders may be looking to buy the dips. A close above 34500 may lead to 35500 which is a key supply zone from a previous breakout. A break below the daily support could trigger a broader correction in the weeks to come.
Considering Portfolios In Times Of, Among Others, Inflation...

EUR To GBP and EURUSD Will Go Down If Dollar Strengthens?

Alex Kuptsikevich Alex Kuptsikevich 26.01.2022 09:39
The US dollar has been gaining steadily against the developed countries' currencies since the beginning of the year. By the way, the yen was an exception: it has been adding 1.8% over the past 11 days after the stock market entered the turbulence zone due to a reassessment of the monetary policy outlook. According to historical data, the Fed often finds itself at the forefront of the monetary policy cycle. That is used to be translating into a stronger USD in the months before and after the first tightening. So the question is in what currency pairs it is most profitable to buy the dollar now. Among the developed and liquid currencies, three scenarios can be considered. The first way is to sell EURUSD. The euro is weaker than the dollar due to the ECB being on several steps behind the Fed. That means that the EU rates will remain lower for a longer period of time, and the balance of bond yields will be shifted towards the dollar. Given the pace the Fed intends to take in tightening monetary policy, this yield gap promises to widen further. Another way is to bet that monetary tightening is stressing the declining markets drag the pound down. We should keep in mind that the Bank of England has already approved its first tightening policy step, and in this case it's not far behind the Fed. At the same time, it's closely correlated with falling market indices. Need to mention that GBPUSD is still far from being oversold with a wide room for further decline. The third way is often more obvious. Traders may consider selling the currencies of developing countries, which are much more sensitive to the Fed monetary policy changes. However, EMs have been raising rates for almost a year, so selling them now is a bet on market volatility in the near term. For the longer perspective, higher interest rates promise to level out short-term gains. In this case, the dollar's down turn may be faster than in the euro.
DXY Hits Level of July, 2020 and Affects EURUSD

DXY Hits Level of July, 2020 and Affects EURUSD

Alex Kuptsikevich Alex Kuptsikevich 28.01.2022 10:26
The US dollar rewrote its 1.5-year highs on Thursday, sending EURUSD under 1.1150. After the FOMC meeting, the pair fell in total by 1.5%, leaving a two-month consolidation with a sharp movement. Friday's small rollback from extremes is likely a local profit fixation by the end of the week and month. History suggests that the US currency begins to add about 2-3 quarters before the first rate hike and continues to be in positive territory for about the same time after. We believe that this long story should be adjusted to the new reality in which interest rates are the starting point. Namely, the first point of tightening monetary conditions is now the beginning of the curtailment of purchases on the balance sheet and not the first increase. The start of the dollar's growth last year was the beginning of a public discussion of curtailment. And now, seven months later, the dollar is halfway up with an 8.5% increase from the area of last year's lows. The second half of this wave is unlikely to be as powerful. We only assume that the dollar has a 3-4% growth potential in the area of 100.3-101 due to monetary policy changes. This will return the US currency to the area of steady highs in 2020, excluding two weeks of the most violent market crash. The EURUSD rate in this scenario may fall to 1.07-1.08 before finding a more substantial base of buyers. However, investors and traders should also remember that monetary policy is far from the only driver for currencies. The markets' attention can quickly switch to the debt sustainability of the Eurozone countries and the pace of economic recovery in the world.
Jason Sen's FX trades for today & outlook for stock markets - with video

Jason Sen's FX trades for today & outlook for stock markets - with video

Jason Sen Jason Sen 14.01.2022 11:22
EURUSD - We waited a long time for the breakout & as predicted we did see decent move. The skill was getting on board in time & we certainly did that with a 70 pip rally so far. USDCAD tested the 200 day moving average at 1.2500 & over as far as 1.2449 which was certainly not a surprise, but seeing a bounce now. GBPCAD breaks the first support at 1.7160/50 to target support at 1.7060/50. We held 12 pips above here - same levels apply for today. Update daily at 06:30 GMT Today's Analysis. EURUSD beat 1.1350/70 as expected for a buy signal targeting 1.1400 & strong resistance at 1.1455/65. This has been holding exactly as predicted, but shorts could be risky & we certainly have not headed lower yet. Further gains are likely eventually towards 1.1500/10 & 1.1560/70 Downside today should be limited - a buying opportunity at 1.1400/1.1380 - stop below 1.1365. USDCAD seeing a bounce which could reach as far as first resistance at 1.2560/80. A high for the day certainly possible. Stop above 1.2590. A break higher can target a sell opportunity at 1.2625/45 - stop above 1.2665. Failure to hold above the 200 day moving average at 1.2500 sees a retest of minor support at this week's low of 1.2460/50. Although this is also an 8 month trend line I do not see it holding too many times. Eventually we could fall as far as 1.2420/10. GBPCAD breaks strong support at 1.7160/50 to target strong support at 1.7060/50. Longs need stops below 1.7030 Minor resistance at 1.7150/60 (tested again this morning as I write after it held yesterday) but above here can target can target 1.7220/30, perhaps as far as resistance at recent highs of 1.7290/1.7310. Further gains meet resistance at 1.7360/70. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Crypto as a trading vehicle

Crypto as a trading vehicle

Chris Weston Chris Weston 17.11.2021 09:40
Traders continue to be drawn to crypto as a trading vehicle. Not just because of its ability to trend for a prolonged period, or due to the nature of impulsive momentum that traders can identify and jump on. But also, as we’re seeing now with increased two-way opportunities, and for those that will trade the flow long or short.  For those who see crypto as a vehicle to trade and not just for the long-term adoption story that investors tend to want to be involved with, then from a spread/movement (or volatility) basis crypto is one of the best vehicles out there. We’ve seen that case-in-point over the past 24 hours - A rapid flush out of longs in the market has seen $866m liquidated across exchanges - 31% of that in Bitcoin alone. Again, we look to China where authorities are warning SOEs about cryptocurrency mining, broadly detailing they would increase electricity rates and levies for companies still involved here. While China going after the crypto market is obviously not new, it reminds us that increasing the costs associated with crypto is one of the key influence’s governments can utilise to impact the crypto market, as they can with potentially influencing the fiat-to-stable coin transfer.  There has been some focus on the passing of the US infrastructure bill where a provision has been set for the exchange (or “Broker”) to report customer intel to the IRS – clearly not a popular move for those in the US participating in the crypto market, although it won’t kick in until 2024. This becomes somewhat political, given 1 in 10 Americans have bought and sold crypto in the past 12 months. It perhaps doesn’t shock then that a group of US senators are looking at exempting participants who are involved in the development and innovation of the crypto ecosystem. Either way, crypto will react just like any other asset class to news around regulation, and just as investors are inspired by news of innovation, adoption, or efficiencies - regulation will promote short sharp moves lower, as we have seen periodically.  As a trader, these headlines need to be incorporated fully into one’s risk management. Price moves are the immediate red flag, and a sudden move needs to put us on notice. Personally, when I see a move of 3% in Bitcoin or Ethereum within a 30-minute window, I will assess the headlines and the severity of the issue, as we often see a far slower burn to fully discount news than say spot FX. First movers’ advantage in crypto can therefore be genuinely beneficial and while hedge fund algorithmic activity has dramatically increased in this space over the years, with the technology to react to news far quicker than retail traders, it is still as not as efficient as other asset classes.  This can help level the playing field. The cost to movement trade-off  Our flow is predominantly always seen in Bitcoin and Ethereum – and, while we offer 16 coins in total, these two have the best liquidity, and for an average spread of $33 (on Bitcoin), $5.4 (Ethereum) we see the 12-month average high-to-low percentage range at 6.8% and 8.6% respectively over the past 12 months.  Another popular way to see this is the 5-day Average True Range (ATR). In pips, the 5-day ATR in Bitcoin is 3453 – so this is a spread as a percentage of the daily trading range of 0.96%. On our standard account (comm is incorporated into the spread) this same dynamic in EURUSD sits at 0.97%.  So, in essence, on a spread-per-movement basis Bitcoin is comparable to EURUSD and even gold.  The current set-up Bitcoin daily After a move into 58,621 in Bitcoin, we’ve seen the 50-day MA act as support and buyers stepping in. The 28 Oct swing low of 57,762 is also one to consider, and if we were to see a breakdown through the 50 day and the 28 Oct low and Bitcoin could stage a rapid move into 54,000. As it is, this has the feel that we could see some messy two-way action, and it wouldn’t surprise to see 68,000 capping the upside, 57,000 the downside.  Ethereum daily Ethereum has found support into the lower Bollinger band (20-day MA, 2.5 standard deviations) but has broken the channel support it held since late Sept. That doesn’t mean it will collapse, but the markets propensity to follow the trend is over given price is no longer making higher highs. Another where the near-term price action could get messy and chop around with better two-way price moves.  DOT is one that has seen some good volatility of late and another that is holding the 50-day MA for dear life. A close below 39.66 and this could open a deeper move – a factor which could be appealing as we pay 7.5% on shorts.  As always in trading keeping an open mind is key and for those who want to trade crypto rather than HODL, it feels like the stage is set for two-way opportunity.
Speaking Of S&P 500, NAS 100, GER40, UK100, USDJPY And More - DayTradeIdeas Shared A New Video!

Speaking Of S&P 500, NAS 100, GER40, UK100, USDJPY And More - DayTradeIdeas Shared A New Video!

Jason Sen Jason Sen 02.02.2022 11:31
USDJPY hit the next target of 115.65/75 with a high for the day exactly here & a minor negative candle on the daily chart which increases the chances of a right shoulder forming here. Prices have headed lower as expected to the 114.60/55 target. EURJPY shorts at strong resistance at 129.50/60 worked with a high for the day here & a potential 60 pip profit on the side to minor support at 129.00/128.90 - a low for the day exactly here. CADJPY remains very volatile, making it difficult to hold a trade for a more than a few hours. Up one day, down the next day in the 7 day sideways trend. The key level today does appear to be 9040/30 as stated yesterday. Holding above here is positive, holding below is negative for the outlook. Update daily at 06:30 GMT Today's Analysis. USDJPY reversed from the next target of 115.65/75 as we watch for a right shoulder to form. If you sold the bounce to first resistance at 115.60/70 you are doing well already as we hit targets of 114.85/80 & 114.60/55, perhaps as far as 114.35/30 today. First resistance at 115.15/20, with further resistance at 115.60/70 of course. EURJPY meets strong resistance again at 129.50/60. Shorts need stops above 129.70. A break higher is a buy signal targeting 129.90/95 then 130.25/35. Minor support again at 129.00/128.90. A break lower targets 128.65/60 before a retest of 128.30/20. CADJPY beat first resistance at 9030/40 to hit the next target of 9080/90 with a high for the day here again yesterday but the pair are difficult to read. Above here look for 9110/15. A break higher targets 9140/50. Minor support at 9040/30. Further losses can retest 8970/60. A break lower can target the 200 day moving average at 8915/10.   EURUSD beat strong resistance at 1.1205/10 & was expected to target strong resistance at 1.1255/65 - this target was hit & is holding as I write. However a break above 1.1280 today is a buy signal. USDCAD we wrote: should meet very strong support at 1.2665/55. Longs need stops below 1.2645. A low for the day exactly at 1.2665/55 yesterday & a potential 60 pip profit on the bounce to minor resistance at 1.2710/20 with a high for the day exactly here. These 2 levels marked the low & the high for the day. Update daily at 06:30 GMT Today's Analysis. EURUSD hit the next target & strong resistance at 1.1255/65 which is still holding today. Shorts need stops above 1.1275. A break above 1.1280 is a buy signal targeting 1.1300/10, perhaps as far as 1.1340/50. Shorts at strong resistance at 1.1255/65 target 1.1210/00. If we continue lower look for minor support at 1.1180/70. USDCAD held very strong support at 1.2665/55. Longs need stops below 1.2645. A break lower however targets 1.2615/05. Minor resistance at 1.2710/20 held the bounce yesterday but above here can target 1.2750/60, perhaps as far as 1.2780/90. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Having A Look At The Markets Considering Tensions, COVID-19 And National Banks Decisions

EURUSD - Heading To 1.1480? GBPUSD After BoE Decision, CADJPY - A Quite Wide Rang?

John Benjamin John Benjamin 04.02.2022 09:38
EURUSD breaks higher The euro soared as traders bet that persistent inflation could force the ECB to act sooner than later. A break below the daily support at 1.1300 had put the single currency under pressure. However, a swift rebound above this support-turned-resistance indicates strong commitment from the buy-side. The pair is rising towards the January peak at 1.1480. The RSI’s triple top in the overbought area may slow the momentum down as intraday buyers take a break. 1.1270 is a key support to keep the rebound relevant. GBPUSD tests resistance The pound popped higher after the BOE raised interest rates to 0.5%. The latest rebound above the resistance at 1.3520 has prompted sellers to cover. Then the rally is accelerating towards 1.3660 which is a major hurdle from the sell-off in late January. A bullish breakout could turn sentiment in the sterling’s favor and send the price to the previous peak at 1.3740. On the downside, 1.3500 is an important support and its breach could invalidate the recovery despite the bullish catalyst. CADJPY awaits breakout The Canadian dollar recovers over growing risk appetite. A fall below the demand zone around 90.60 weighed on sentiment as the loonie struggled to make a higher high. The pair found support at 89.70 in what used to be a former supply area on the daily chart. The current consolidation is a sign of indecision. 91.10 proves to be a tough resistance to crack. A bullish breakout could bring the price to the recent peak at 92.00. Failing that, the pair may suffer from another round of sell-off below 89.10.
Having A Look At The Markets Considering Tensions, COVID-19 And National Banks Decisions

EURUSD Keeps Plain Line, US 30 With A Bounce, GBPUSD Gains A Bit

John Benjamin John Benjamin 09.02.2022 08:51
EURUSD hits resistance The euro fell back after ECB President Lagarde tried to cool rate hike expectations. The rally came under pressure at the January peak of 1.1480. The RSI’s overextension at this daily resistance prompted momentum buyers to cash in. A combination of profit-taking and fresh selling may drive the exchange rate lower. Short-term sentiment remains upbeat though unless the single currency drops below the origin of its bullish push at 1.1270. A recovery above 1.1480 could pave the way to last October’s high at 1.1690. GBPUSD consolidates gains The sterling turns higher as traders price in an increasingly hawkish Bank of England. A break above 1.3520 forced sellers to cover some of their positions. However, the pound’s rally came to a halt in the supply zone around 1.3620. The RSI’s overbought situation and bearish divergence suggest softness in the underlying momentum. The pair found bids on the 50% Fibonacci retracement level (1.3490), which sits in the aforementioned supply area. A new rally may propel the pair to the daily resistance at 1.3750. US 30 bounces higher The Dow Jones 30 inches higher supported by better-than-expected earnings. The index steadied after successive breaks above 34800 and 35450. Nonetheless, the recent recovery slowed down on the 30-day moving average, a sign of a lingering cautious mood. 34500 is a key support to keep the rebound relevant. A bearish breakout could extend the correction to 33800. On the upside, a rally above 35700 could attract momentum traders and initiate a bullish reversal to 36500.
EURUSD reversed perfectly from strong resistance at the January high & 200 week moving average at 1.1480/1.1500...

EURUSD reversed perfectly from strong resistance at the January high & 200 week moving average at 1.1480/1.1500...

Jason Sen Jason Sen 10.02.2022 10:54
EURUSD reversed perfectly from strong resistance at the January high & 200 week moving average at 1.1480/1.1500 to hit strong support at 1.1410/00 with a low for the again yesterday. USDCAD loving very strong support at 1.2665/55 as we hold all last week & this week so far. Update daily at 06:30 GMT Today's Analysis. EURUSD longs at strong support at 1.1410/00 are working again today but need stops below 1.1385. Next target & support at 1.1350/40. Longs need stops below 1.1330. Our longs target 1.1435 before a retest of strong resistance at the January high & 200 week moving average at 1.1480/1.1500. Shorts need stops above 1.1515. A break higher this week is a buy signal of course, initially targeting 1.1555/60, perhaps as far as 1.1580/90. USDCAD retests strong support at 1.2670/60. Longs here re-target 1.2710/20. If we continue higher look for a retest of 1.2780/90. Further gains this week test the January high at 1.2810/15. If we continue higher look for 1.2840/50. Support at 1.2670/60. A break below 1.2650 however targets 1.2630/20, perhaps as far as 1.2690/80. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Swissquote MarketTalk: A Look At XAUUSD, Swiss Secrets, Tesla And More

After The US CPI, We All Want To Review Our Moves - Friday's Swisquote's MarketTalk Is Here To Help Us

Swissquote Bank Swissquote Bank 11.02.2022 10:40
Thursday’s data showed that consumer prices in the US advanced from 7.0% to 7.5% in January, more than 7.3% penciled in by analysts. The Fed hawks came back in charge aggressively following the US inflation print as St Louis President Bullard said he’d ‘like to see 100 basis points in the bag by July 1’. All three major US indices were moody yesterday, but Nasdaq led losses as it’s the most sensitive to the rate changes. Rising hawkish noises from the Federal Reserve (Fed) backed the US dollar. The EURUSD is back below the 1.14 mark and Christine Lagarde insists that acting too fast could choke the economy’s recovery, but not acting at all will choke the economy, as well. In commodities, gold first rallied than fell warning again that it may not be the best inflation hegde at the current levels, but commodity ETFs and energy-heavy stock indices are. In this episode, you will find my favorite inflation hedge plays. Watch the full episode to find out more! 0:00 Intro 0:30 Inflation & Fed talk 2:20 Risk appetite: hammered 3:32 Bitcoin: NOT the best macro play for this year 4:51 USD up, EUR down, but… 6:00 Best inflation hedge ideas Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
Observing SEK, Riksbank, Bank Of Japan And EURUSD

Observing SEK, Riksbank, Bank Of Japan And EURUSD

John Hardy John Hardy 11.02.2022 12:14
Forex 2022-02-11 11:25 5 minutes to read Summary:  The latest US CPI data proved far hotter than expected once again, taking Fed rate hike expectations higher still. The US dollar actually shrugged this development off initially before rallying on a significant further boost to potential Fed tightening after a hawkish broadside from FOMC voter Bullard. Elsewhere, the Bank of Japan just doubled down on its yield-curve-control policy and the Riksbank threw the krona under the bus with a dovish meeting. FX Trading Focus: USD firming underwhelms, given massive further shift in Fed expectations, BoJ doubles down on YCC, Riksbank throws SEK under the bus. US dollar snaps back after whiplash-inducing sell-off post-CPI release. The January US CPI release came in hotter than expected, at 0.6% month-on-month for both the headline and ex-food-and-energy measures vs. +0.4%/+0.5% expected, respectively and at +7.5% / +6.0% year-on-year versus +7.3%/+5.9% expected, respectively. Both of the year-on-year numbers were the highest for the cycle and the highest in forty years and took Fed expectations higher still. Somewhat curiously, the USD kneejerk higher on the data release was quickly erased and the greenback actually sold off to new local lows before later rallying on a hawkish broadside from St. Louis Fed President and FOMC voter James Bullard. And even then, the USD strength looks underwhelming, as discussed in the EURUSD chart below. As noted, Bullard was out speaking yesterday in an interview with Bloomberg yesterday and said that he would like to see 100 basis points of Fed tightening “before July 1” which implicitly means that, if the hikes were to take place at regularly scheduled meetings, one of the three meetings between now and then would need to see a 50-basis point move. He would also like to see QT (balance sheet reduction) beginning in the second quarter and even brought up the idea of an emergency move between meetings. “There was a time when the committee would have reacted to something like this to having a meeting right now and doing 25 basis points right now...I think we should be nimble and considering that kind of thing.” The Fed hasn’t done an emergency hike at a non-scheduled regularly meeting since 1994, as far as I can tell. The combination of the CPI and Bullard’s comments took the March FOMC meeting expectation to +46 basis points, i.e., very strong consensus that the Fed will hike fifty basis points (or an emergency move of 25 bps plus another 25 bps at that meeting) and the anticipated rate through the December FOMC meeting is some 30 bps higher at above 178 bps than where it closed Wednesday. Bank of Japan set to enforce its yield-curve-control policy – before the US CPI release yesterday, the Bank of Japan announced that it would buy “unlimited” amounts of 10-year JGB’s in operations on Monday, obviously to enforce its 25 basis point yield cap on 10-year Japanese sovereign debt after the yield on that debt had reached as high as 23 basis points yesterday. The JPY was sharply weaker on the news, but USDJPY avoided new highs above the previous 116.35 mark as it came back broadly bid – especially in the crosses yesterday - on energy prices and risk sentiment cratering.  This is an interesting move from the BoJ if it maintains this policy, as any further rise in global bond yields from here, particularly longer yields, will theoretically have to absorbed by further weakening of the already very weak Japanese yen. Riksbank dovish, SEK rushes lower – the Riksbank failed to make any shift in line with the recent ECB meeting, as it expressed the view that monetary policy needed to stay loose “for inflation to be close to the target in the medium term.” As well, the Riksbank promised to continue with enough QE to keep the bank’s balance sheet unchanged through this calendar year before allowing holdings to “decrease gradually.” The rate lift-off time frame was only pulled forward to the second half of 2024 from the prior forecast of Q4 of 2024. All in all, a very dovish mix despite Governor Ingves providing the decisive vote in overruling dissenting voices on the QE decision, so the Riksbank did an effective job of throwing the SEK under the bus. Chart: EURUSDYesterday’s developments were perhaps both confusing and revealing. Initially, the hot US January CPI release failed to boost the US dollar, which actually dropped to a new low in places (new high in EURUSD) despite additional Fed tightening being priced into the forward curve in the wake of the release. Later, the USD came roaring back only after Bullard unleashed his hawkish broadside that unsettled the market, which is now forced to price in the risk of even an emergency Fed hike before the regularly scheduled March meeting. All in all, the revealing bit is that we wake up this morning with the Fed priced to hike a full 6-7 times through the December meeting this year, with risk sentiment on the defensive and the EURUSD is only about 30-40 pips below the Wednesday close. This suggests that the path to a stronger US dollar is a very difficult one (a full-on market crash?) and increases the conviction in the downside potential. The ultimate test for that notion would be if the Fed does indeed deliver an emergency hike in coming days and yet EURUSD fails to fall much further or even shows resilience and bounces back to current levels or higher.Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strength.Yesterday’s action didn’t do much to alter recent trends, though note the Swedish krona biting hard to the downside…Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Watching how USD pairs shaped up in the wake of the churning back and forth yesterday, and as we watch the nature of the consolidation after the huge EURUSD rally off the lows.Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1030 – Russia Central Bank Key Rate Announcement (expected to hike 100 bps to 9.50%) 1500 – US Feb. Preliminary University of Michigan Sentiment  
The Swing Overview - Week 6 2022

The Swing Overview - Week 6 2022

Purple Trading Purple Trading 13.02.2022 23:00
The Swing Overview - Week 6 The record inflation rate in the US over the past 40 years sparked another wave of volatility in the markets on fears of more aggressive Fed action against an overheated economy. Unexpectedly strong US labour market data also came as a shock to markets. As a consequence, yields in the US 10-year bonds rose and broke the 2% mark. Equity indices, on the other hand, weakened towards the end of the week and we will see whether strong supports will be tested again under the influence of these fundamentals. Rising bond yields are not good news for gold either, which has so far responded to the strengthening dollar and rising yields by weakening. The macroeconomic data from the US Inflation and labour market data were clearly among the most anticipated macroeconomic events last week. Year-on-year inflation in the US rose to 7.5% in January 2022. This is the highest reading since February 1982 and is also higher than analysts' estimates, that had expected inflation to be around 7.3%. The reasons for the higher inflation are rising energy costs, a tight labor market and disruptions in supply chains, which are multiplied by strong demand in a recovering economy. The biggest contributors to rising inflation were energy prices, which rose by 27%, and fuel prices, which rose by 40%. Figure 1: The inflation in the US In terms of the labour market, the US economy created 467,000 new jobs in January. This was much more than the analysts' forecast, who estimated that, given the spread of the Omicron variant, only 150 thousand new jobs would be created in the US in January. Figure 2: The US jobs growth (NFP) This very strong data means one thing. The Fed will tighten the economy and probably at a much faster pace than the market expects. And this is also the reason for the further rise in the US 10-year bond yields, which have surpassed the 2% mark and reached their highest level since August 2019. Along with this, the dollar index, which had made a correction last week, has also started to strengthen.   Figure 3: 10-year government bond yield on the 4H chart and the USD index on the daily chart A strong dollar, rising yields and the economy tightening at a faster pace than the market expects are clearly negative news for equity indices and also gold.   The NASDAQ and the SP500 Earnings season continues in the US. Of the well-known companies, Pfizer (NYSE:PFE) reported results last week. While the company's earnings were higher than expectations, the pharmaceutical giant also reported that it expects revenue for 2022 to be USD 32 billion, below analysts' expectations, who were hoping for growth of around USD 33.8 billion.  Facebook continues to lose ground after last week's washout, causing the share price to drop from USD 320 to USD 220 in one week.   Figure 4: The NASDAQ index on H4 and D1 chart The NASDAQ started last week with a rise and the price approached the resistance according to the H4 chart. The information about record inflation had a strong negative impact on technology stocks and the price was moving near the support at the end of the week, which is in the range near 14,392 - 14,530 according to the H4 chart. Significant support is in the area at 13,750-13,950 according to the daily chart. The nearest resistance according to the H4 chart is at 15,050 - 15,080.   Figure 5: The SP 500 on H4 and D1 chart   There has been a very similar pattern on the SP 500 index to the NASDAQ. The price got to the resistance which is defined by the horizontal resistance area at 4,580 - 4,600. At the same time, there is a confluence with the broken trend line of the rising channel below which the index is moving. Support according to the H4 chart is at 4440 - 4454. According to the daily chart, significant support is at 4,225 - 4,300.   German DAX index Figure 6: The DAX on H4 and daily chart There is no clear direction on this index recently. We can probably say that the index is moving in a sideways trend which according to the daily chart is defined by the strong resistance at 16,300 (all-time high) and the support which has already been tested several times in the area between 14,850 - 15,000. The current move shows that the rising channel has been broken to the downside and also that the moving averages on the H4 chart EMA 50 and SMA 100 are in a bearish constellation. This together with the higher inflation data and also the recently announced hawkish ECB policy would suggest more of a move down to the aforementioned support. The nearest horizontal resistance according to the H4 chart is at 15,532 - 15,620. The next resistance according to the H4 chart is at 15,727 - 15,757.   The EUR/USD near strong resistance The EURUSD approached the strong 1.15 level but after the US inflation data was announced, the pair started to fall strongly. Thus, according to the H4 chart, a false break of the resistance arose, which is in the band around 1.1480 which tends to be a strong signal for further weakening. Figure 7: EURUSD on H4 and daily chart The possibility of a weakening is also indicated by the development of the interest rate differential that is present in the yields between the 10-year bonds of Germany and the US. This has recently been very strongly correlated with developments on the EURUSD. Figure 8: Correlation of the interest rate differential between German and US 10-year bonds with the EURUSD currency pair on H4   The interest rate differential is starting to decline and this should suggest that the EURUSD might weaken. The nearest resistance is at the 1.1460 - 1.1480 band. The nearest support according to the H4 chart is at 1.1360 - 1.1370. The next one is at 1.1270 - 1.1280.   Gold Gold is taken by many investors as a hedge against inflation. But lately, gold seems to be losing in the battle for inflation protection to US Treasuries, which carry some yield, while gold does not deliver any yield. Gold is most responsive to the value of the US dollar. If the dollar rises, gold tends to depreciate and vice versa. Recent developments in the USD index suggest that the dollar could strengthen again this week, which should mean a test of support for gold. Figure 9: Gold on H4 and D1 charts   The nearest resistance according to the H4 chart is in the area of 1,835 - 1,841. Then the next resistance according to the daily chart is at 1,847 - 1,852. The nearest support is at 1 788 - 1 795 and then 1 780 - 1 784 USD per troy ounce of gold.  
Swissquote MarketTalk: A Look At XAUUSD, Swiss Secrets, Tesla And More

Reviewing Effects Of Easing The Conflict And Awaiting US PPI

Swissquote Bank Swissquote Bank 15.02.2022 13:24
There is a certain relief in the Ukraine-Russia crisis as the two sides seem willing to continue their diplomatic efforts to avoid a military action. The latter could help reversing a part of yesterday’s aggressive selloff in the European markets, and the FTSE 100 could outperform its peers on the back of firm energy and oil prices. Base case: no war Ukrainian president criticized news giving a date for a potential Russian invasion and said that it could eventually drop its dream to become part of NATO, as a powerful sign of its commitment to de-escalate the tensions at its Russian border. US producer prices: The S&P500 slid 0.38% and closed just near the 4400 mark, the Dow dropped near 0.50%, as Nasdaq closed Monday’s session flat. Today, the inflation talk continues with the US producer prices due later in the session. Analysts expect a certain easing in the PPI index to 9.1% from last month’s surprise to 9.7%. Given the rise in oil and commodity prices, there is a higher chance of seeing a positive than a negative surprise. Any positive surprise could send the PPI index above the 10% psychological mark and keep the bears in charge of the market, regardless of a more hopeful mood due to the diplomatic efforts between Russia and Ukraine. Watch the full episode to find out more! 0:00 Intro 0:24 Market update 2:48 FTSE led higher by energy, mining stocks 4:54 S&P500, Nasdaq futures rebound, but PPI data is a risk 7:23 Super Bowl advertisements pointed at cryptocurrencies! 8:21 EURUSD: opportunity for ECB hawks? Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
Speaking Of nVidia Stock, S&P500 (SPX), The Conflict In Eastern Europe And GBP State

Look At This XAUUSD Slide. Did GBPUSD Find Its Straight Line?

John Benjamin John Benjamin 16.02.2022 08:43
EURUSD bounces off support The US dollar retreats as the Fed’s half-point hike in March remains uncertain. The euro’s break above the daily resistance at 1.1480 boosted buyers’ confidence after a sell-off in January. It bounced off 1.1280 at the base of the recent bullish breakout. The support also is right next to the 61.8% Fibonacci retracement level (1.1265) making it an area of congestion. A close above the intermediate resistance (1.1370) would attract more buying interest. Then an extension above 1.1490 may fuel a rally towards 1.1600. GBPUSD awaits breakout The sterling holds well as Britain’s wage growth beats expectations in December. The current rebound came under pressure in the supply zone around 1.3660 which was the origin of a sharp drop in late January. An overbought RSI led to some profit-taking but the pound has found support above 1.3480. The bears’ failed attempts to push lower indicates strong demand. A bullish close above 1.3640 would lift offers towards last month’s high at 1.3750. The daily support at 1.3370 is a key floor in keeping the rally intact. XAUUSD seeks support Gold drifts lower on signs of de-escalation in Ukraine. A break above last November’s high at 1875 may have put the precious metal back on track. However, the rally ran out of steam in the short term with the RSI shooting into the overbought territory. The price is taking a breather and buyers may see a pullback as an opportunity to stake in. A drop below 1852 may wash out weak hands and deepen the correction towards 1830. 1880 is now a fresh resistance and its breach could propel bullion to last June’s high at 1910.
Markets News: Crude Oil, Gold, EuroStoxx 600, Copper

Analysing Macro, The Conflict In Eastern Europe, Standard And Poor 500 And US100

Purple Trading Purple Trading 21.02.2022 12:53
The Swing Overview – Week 7 Macroeconomic events last week had a secondary impact on market volatility. The "big story" that is currently moving the markets is the situation in Ukraine. Equity indices weakened and retested their strong supports. Last week's winner, on the other hand, is the gold, which, due to these geopolitical uncertainties, surprisingly strengthened to USD 1,900 per ounce, where it last traded in June 2021.   Macroeconomic data from the US  US industrial inflation on an annual basis came in at 9.7%, up from 9.8% in the previous month. This is the first decline in industrial inflation since April 2020. Retail sales reported very strong data, rising 3.8% in January (previous month was down 2.5%).  In the labor market, there was an unexpected increase in initial jobless claims of 248k (expectations were for a 219k increase). FOMC meeting minutes released on Wednesday did not indicate that the Fed was seriously considering a 0.50% rate hike in March. This gave the markets and risk currencies a temporary boost, but the main driver of the markets last week was the situation in Ukraine. Geopolitical tensions in Ukraine Last week Friday, when Jake Sullivan, the White House national security adviser, warned that Russia could attack Ukraine "any day now", sent stock indices into the red and investors focused on so-called "save havens" such as the US bonds and the gold, which rallied strongly. In contrast, commodity currencies, stock indices and cryptocurrencies, which are seen as risky assets, weakened. This suggests what might happen if an invasion actually took place. At the moment, however, both sides seem to be open to diplomatic solution of the crisis. This brings some relief and cautious optimism even though further developments are unclear.  Let’s have a look at how the US bond yields are reacting to the situation: Figure 1: 10 year government bond yield on the 4H chart and the USD index on the daily chart Demand for these bonds has been rising as investors view the US government bonds as a "save haven" in times of uncertainty. This increases the price of these bonds. Since there is an inverse relationship between the price of bonds and their interest yield, a rise in the price of bonds then pushes down their yields. This explains why the yield on these bonds fell on Friday last week as a result of the news of a possible Russian attack.   Overall, however, yields on these bonds continue to rise as investors anticipate a rise in the US interest rates. This in turn has had a negative effect on the technology stocks in the NASDAQ index in particular.   NASDAQ a SP500 Figure 2: The US NASDAQ index on H4 and D1 chart The NASDAQ started last week on Friday with a significant decline as the other indices.  Then there was a correction of this decline as news emerged that Russia was withdrawing some of its troops from the Ukrainian border and that military exercises were over. However, the next report was that the US was not seeing any change at the border with Ukraine and the NASDAQ index fell again. The current situation is that both sides have agreed to further negotiations.  It can be seen from this how sensitive the indices are to such news. We therefore recommend that our clients keep an eye on any breaking news that emerges in relation to the situation in Ukraine.  The nearest resistance according to the H4 chart is at 14,606 - 14,673. The next resistance is then 15050 - 15100.  Support according to the H4 chart is at 14,050 - 14,100.  Significant support according to the daily chart is at 13,750-13,950.  As for the US SP 500 index, the situation is similar here.   Figure 3: SP 500 on H4 and D1 chart The nearest resistance is at 4,471 – 4,491. The next strong resistance is in the area at 4,580 - 4,600.  Support according to the H4 chart is at 4,357 – 4,367. According to the daily chart, significant support is at 4,225 - 4,300.   German DAX index Germany reported ZEW economic sentiment, which came in at 54.3 (previous month 51.7). This indicates an improving outlook for the German economy over the next six months. However, this index was under pressure last week as were the US indices.  Figure 4: The DAX on H4 and daily chart  On February 14, the index fell to 14,841, where the previous support is. The zone of this strong support according to the daily chart is quite wide: 14,800 - 15,000. The nearest resistance according to the H4 chart is 15,440 - 15,530. The next resistance then immediately follows this zone and is in the 15 534 - 15 617 range.   The EUR/USD under pressure The EURUSD has shown that in times of political uncertainty, this pair tends to weaken. The decline was justified in terms of technical analysis by the false break of the resistance, which is in the area of 1.1465 - 1.1480. Figure 5: EURUSD on H4 and daily chart The nearest resistance according to the H4 chart is in the area of 1.1380 - 1.1400. Support according to the H4 chart is at 1.1280 - 1.1300. Very strong support according to the daily chart is then at 1.1120 - 1.1140.   The Gold The gold surprised last week with unexpected strength based on the situation around Ukraine. News that Russia may attack Ukraine any day has caused the gold price to rise. It eventually reached $1,900 per troy ounce, where it last traded in June 2021.  Figure 6: The gold on the H4 and D1 chart The nearest resistance according to the daily chart is USD 1,900 - 1,916 per troy ounce of gold.  The nearest support is 1,872 - 1,878. The most significant support is then at 1 845 - 1 852 USD per troy ounce. Once geopolitical tensions calm down and US government bond yields continue to rise, this should be negative news for gold. 
Positions of large speculators according to the COT report as at 15/2/2022

Positions of large speculators according to the COT report as at 15/2/2022

Purple Trading Purple Trading 22.02.2022 11:48
Positions of large speculators according to the COT report as at 15/2/2022 Total net speculator positions in the USD index rose by 1,621 contracts last week. This change is the result of an increase in long positions by 1,979 contracts and an increase in short positions by 358 contracts. Growth in total net speculator positions occurred last week in the euro, the British pound and the New Zealand dollar. Decrease in total net positions occurred in the Australian dollar, the Japanese yen, the Canadian dollar, and the Swiss franc. In the event of a Russian invasion to Ukraine, markets would move into risk-off sentiment. This means that investors would sell risk assets, which include stock indices, and shift their resources into assets that are considered as safe havens in such situations, which include US government bonds and gold. In currency terms, this means that the US dollar, the Japanese yen and the Swiss franc in particular could then appreciate in such a situation. Commodity currencies (especially AUD, NZD) might weaken. The positions of speculators in individual currencies The total net positions of large speculators are shown in table 1: If the value is positive then the large speculators are net long. If the value is negative, the large speculators are net short. Table 1: Total net positions of large speculators Date USD Index EUR GBP AUD NZD JPY CAD CHF Feb 15, 2022 35386 47581 2237 -86694 -9333 -66162 12170 -9715 Feb 08, 2022 33765 38842 -8545 -85741 -10366 -59148 14886 -9399 Feb 01, 2022 34571 29716 -23605 -79829 -11698 -60640 18264 -8239 Jan 25, 2022 36861 31560 -7763 -83273 -10773 -68273 12317 -8796 Jan 18, 2022 36434 24584 -247 -88454 -8331 -80879 7492 -10810 Jan 11, 2022 37892 6005 -29166 -91486 -8604 -87525 -7376 -7660 Note: The explanation of COT methodolody is at the end of this report. Notes: Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. ​The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.   Detailed analysis of selected currencies   Explanations:   Purple line and histogram: this is information on the total net position of large speculators. This information shows the strength and sentiment of an ongoing trend. It is the indicator r_COT Large Speculators (by Kramsken) in www.tradingview.com. Information on the positions of so-called hedgers is not shown in the chart, due to the fact that their main goal is not speculation, but hedging. Therefore, this group usually takes the opposite positions than the large speculators. For this reason, the positions of hedgers are inversely correlated with the movement of the price of the underlying asset. However, this inverse correlation shows the ongoing trend less clearly than the position of large speculators.​ We show moving average SMA 100 (blue line) and EMA 50 (orange line) on daily charts. ​Charts are made with the use of www.tradingview.com. The source of numerical data is www.myfxbook.com Euro   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Feb 15, 2022 702047 217899 170318 47581 1949 -1074 -9813 8739 Bullish Feb 08, 2022 700098 218973 180131 38842 14667 5410 -3716 9126 Bullish Feb 01, 2022 685431 213563 183847 29716 2479 155 1999 -1844 Weak bullish Jan 25, 2022 682952 213408 181848 31560 -8930 1507 -5469 6976 Bullish Jan 18, 2022 691882 211901 187317 24584 9589 7540 -11039 18579 Bullish Jan 11, 2022 682293 204361 198356 6005 4075 5288 -2271 7559 Bullish         Total change 23829 18826 -30309 49135     Figure 1: The euro and COT positions of large speculators on a weekly chart and the EURUSD on D1 The total net positions of speculators reached 47,581 contracts last week, up by 8,739 contracts compared to the previous week. This change is due to a decrease in long positions by 1,074 contracts and a decrease in short positions by 9,813 contracts. Total net speculators positions have increased by 49,135 contracts over the past 6 weeks. This change is due to speculators closing 30,309 short positions and adding 18,826 long positions. This data suggests continued bullish sentiment for the euro. However, the rising open interest, which increased by 1,949 contracts in the last week, shows the opposite, as the euro fell down last week and this decline is supported by the rising number of open interest contracts. So more bearish traders were in the market. So we have conflicting information here. The euro weakened slightly last week on fears of an escalation of the conflict between Russia and Ukraine. Long-term resistance: 1.1461 – 1.15 Support: 1.1280 - 1.1300. Next support is near 1.1220 - 1.1240. A strong support is in 1.1120-1.1140. The British Pound   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Feb 15, 2022 195302 50151 47914 2237 -2646 5442 -5340 10782 Bullish Feb 08, 2022 197948 44709 53254 -8545 13941 15112 52 15060 Weak bearish Feb 01, 2022 184007 29597 53202 -23605 1967 -7069 8773 -15842 Bearish Jan 25, 2022 182040 36666 44429 -7763 -1194 -3094 4422 -7516 Bearish Jan 18, 2022 183234 39760 40007 -247 -17259 9254 -19665 28919 Weak bearish Jan 11, 2022 200493 30506 59672 -29166 486 4526 -5479 10005 Weak bearish         Total change -4705 24171 -17237 41408     Figure 2: The GBP and COT positions of large speculators on a weekly chart and the GBPUSD on D1 The total net positions of speculators reached 2,237 contracts last week, up by 10,782 contracts compared to the previous week. This change is due to an increase in long positions of 5,442 contracts and a decrease in short positions of 5,340 contracts. Total net positions have increased by 41,408 contracts over the past 6 weeks. This change is due to speculators exiting 17,237 short positions and adding 24,171 long positions. This data suggests bullish sentiment for the pound. Open interest, which fell by 2,646 contracts last week, is indicating that the bullish price action that occurred in the pound last week was not supported by volume and therefore it is weak. Risk off sentiment in US equities could have a negative effect on the Pound as well as the Euro, which could then send the Pound towards support which is at 1.3380. Long-term resistance: 1.3620-1.3640. Next resistance is near 1.3680 – 1.3750. Support: 1.3490 – 1.3520. A next support is near 1.3320 – 1.3380 and then mainly in the zone near 1.3200. The Australian dollar   Date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Feb 15, 2022 192578 11692 98386 -86694 -3825 -5631 -4678 -953 Bearish Feb 08, 2022 196403 17323 103064 -85741 -510 -1512 4400 -5912 Bearish Feb 01, 2022 196913 18835 98664 -79829 6893 3714 270 3444 Weak bearish Jan 25, 2022 190020 15121 98394 -83273 8884 6070 889 5181 Weak bearish Jan 18, 2022 181136 9051 97505 -88454 -4317 -3332 -6364 3032 Weak bearish Jan 11, 2022 185453 12383 103869 -91486 5346 -249 1871 -2120 Bearish         Total change 12471 -940 -3612 2672     Figure 3: The AUD and COT positions of large speculators on a weekly chart and the AUDUSD on D1 Total net speculator positions last week reached -86,694 contracts, down 953 contracts from the previous week. This change is due to a decrease in long positions of 5,631 contracts and a decrease in short positions of 4,678 contracts. This data suggests continued bearish sentiment on the Australian dollar, which is confirmed by the downtrend. Total net positions have increased by 2,672 contracts over the past 6 weeks. This change is due to speculators exit of 3,612 short contracts while exiting 940 long contracts at the same time. However, last week saw a decrease in open interest of 3,825 contracts. This means that the upward price action that occurred last week was weak in terms of volume because new money did not flow into the market. The Australian dollar is very sensitive to the international geopolitical situation. If the conflict between Russia and Ukraine escalates, we can expect it to weaken especially on the AUDUSD pair and also the AUDJPY. Long-term resistance: 0.7200-0.7250 and especially near 0.7270-0.7310. Long-term support: 0.7085-0.7120. A strong support is near 0.6960 – 0.6990. The New Zealand dollar   Date Open Interest Specs Long Specs Short Specs Net positions Change Open Interest Change Long Change Short Change Net Positions Sentiment Feb 15, 2022 64105 24923 34256 -9333 9228 7755 6722 1033 Weak bearish Feb 08, 2022 54877 17168 27534 -10366 -3590 -2037 -3369 1332 Weak bearish Feb 01, 2022 58467 19205 30903 -11698 5151 3257 4182 -925 Bearish Jan 25, 2022 53316 15948 26721 -10773 8589 4336 6778 -2442 Bearish Jan 18, 2022 44727 11612 19943 -8331 2661 652 379 273 Weak bearish Jan 11, 2022 42066 10960 19564 -8604 1764 1543 1302 241 Weak bearish         Celková změna 23803 15506 15994 -488     Figure 4: The NZD and the position of large speculators on a weekly chart and the NZDUSD on D1 The total net positions of speculators reached a negative value last week - 9,333 contracts, having increased by 1,033 contracts compared to the previous week. This change is due to an increase in long positions by 7,755 contracts and an increase in short positions by 6,722 contracts. This data suggests that the bearish sentiment for the New Zealand Dollar continues, but has started to weaken over the past week. Total net positions have declined by 488 contracts over the past 6 weeks. This change is due to speculators adding 15,994 short positions and adding 15,506 long positions. Open interest rose significantly last week, increasing by 9,228 contracts. The rise in the NZDUSD price action that occurred last week is therefore supported by volume and therefore the move was strong. The reason for the NZD strengthening last week is that the Reserve Bank of New Zealand is likely to raise interest rates to 1% on Feb 23, 2022. However, if the conflict in Ukraine escalates further, the NZDUSD could more likely weaken. The reason for the NZDUSD's decline from a technical analysis perspective could also be that the NZDUSD price has reached horizontal resistance and also the upper downtrend line from the daily chart. Long-term resistance: 0.6700 – 0.6740 and then 0.6850 – 0.6890. Long-term support: 0.6590-0.6600 and the next support is at 0.6500 – 0.6530. Explanation to the COT report The COT report shows the positions of major participants in the futures markets. Futures contracts are derivatives and are essentially agreements between two parties to exchange an underlying asset for a predetermined price on a predetermined date. They are standardised, specifying the quality and quantity of the underlying asset. They are traded on an exchange so that the total volume of these contracts traded is known.   Open interest: open interest is the sum of all open futures contracts (i.e. the sum of short and long contracts) that exist on a given asset. OI increases when a new futures contract is created by pairing a buyer with a seller. The OI decreases when an existing futures contract expires at a given expiry time or by settlement. Low or no open interest means that there is no interest in the market. High open interest indicates high activity and traders pay attention to this market. A rising open interest indicates that there is demand for the currency. That is, a rising OI indicates a strong current trend. Conversely, a weakening open interest indicates that the current trend is not strong. Open Interest Price action Interpretation Notes Rising Rising Strong bullish market New money flow in the particular asset, more bulls entered the market which pushes the price up. The trend is strong. Rising Falling Strong bearish market Price falls, more bearish traders entered the market which pushes the price down. The trend is strong. Falling Rising Weak bullish market Price is going up but new money do not flow into the market. Existing futures contracts expire or are closed. The trend is weak. Falling Falling Weak bearish market Price is going down, but new money do not flow into the market. Existing futures expire or are closed, the trend is weak.   Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. Traders should try to trade in the direction of these large speculators. The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. The COT data are usually reported every Friday and they show the status on Tuesday of the week. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.
Tension Beetween Ukraine And Russia Definetely Shaped News In Recent Days

EURGBP - Does The Single Currency Strengthen? Bearish GER 40 Ahead?

John Benjamin John Benjamin 23.02.2022 08:52
EURUSD bounces off support The euro surged over signs that Moscow may remain open to diplomacy. The pair found support at the base of the previous rally (1.1290), indicating the bulls’ commitment to keeping the rebound intact. The RSI’s oversold situation attracted a slew of bargain hunters betting on a lengthy rebound. A break above 1.1390 would prompt sellers to cover and pave the way for a sustained recovery. The recent peak and daily resistance at 1.1490 is a major hurdle. Its breach could extend the rally to 1.1600. EURGBP attempts reversal The sterling whipsawed after BOE officials’ comment about a “modest” rate hike over the coming months. The euro saw strong bids at the base of the February breakout rally (0.8310). A break above 0.8370 wiped out some selling interest, a prerequisite for a meaningful recovery. 0.8400 is the next resistance and its breach would further boost buyers’ confidence and propel the single currency to the recent high at 0.8475. On the downside, a bearish breakout would invalidate the rebound pattern and cause a sell-off below 0.8280. GER 40 breaks floor Trepid sentiment continues to weigh on the Dax. The plunge below the 9-month long consolidation area (14850) may foreshadow a bear market. As traders grew wary, trapped bulls would look to get out of their positions while the bears saw any rebound as an opportunity to sell into strength. An oversold RSI brought in some bids and 14850 is the immediate resistance. However, the index would remain under unless it lifts offers around 15200. Otherwise, the psychological level of 14000 would be the next stop.
Positions of large speculators according to the COT report as at 22/2/2022

Positions of large speculators according to the COT report as at 22/2/2022

Purple Trading Purple Trading 02.03.2022 21:33
Positions of large speculators according to the COT report as at 22/2/2022 Total net speculator positions in the USD index rose by 698 contracts last week. This change is the result of an increase in long positions by 1,377 contracts and an increase in short positions by 679 contracts. The increase in total net speculator positions occurred last week in the euro, the Australian dollar and the Japanese yen. The decline in total net positions occurred in the British pound, the New Zealand dollar, the Canadian dollar and the Swiss franc.  Following Russia's invasion of Ukraine, markets shifted into risk-off sentiment. From a currency perspective, this means that the euro, pound, Australian dollar and New Zealand dollar could weaken. However, the situation is changing very quickly depending on various political statements. The positions of speculators in individual currencies The total net positions of large speculators are shown in Table 1: If the value is positive then the large speculators are net long. If the value is negative, the large speculators are net short. Table 1: Total net positions of large speculators Date USD Index EUR GBP AUD NZD JPY CAD CHF Feb 22, 2022 36084 59306 -5809 -84080 -11551 -63187 9253 -10987 Feb 15, 2022 35386 47581 2237 -86694 -9333 -66162 12170 -9715 Feb 08, 2022 33765 38842 -8545 -85741 -10366 -59148 14886 -9399 Feb 01, 2022 34571 29716 -23605 -79829 -11698 -60640 18264 -8239 Jan 25, 2022 36861 31560 -7763 -83273 -10773 -68273 12317 -8796 Jan 18, 2022 36434 24584 -247 -88454 -8331 -80879 7492 -10810 Note: The explanation of COT methodolody is at the end of this report. Notes: Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. ​The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.   Detailed analysis of selected currencies   Explanations:   Purple line and histogram: this is information on the total net position of large speculators. This information shows the strength and sentiment of an ongoing trend. It is the indicator r_COT Large Speculators (by Kramsken) in www.tradingview.com. Information on the positions of so-called hedgers is not shown in the chart, due to the fact that their main goal is not speculation, but hedging. Therefore, this group usually takes the opposite positions than the large speculators. For this reason, the positions of hedgers are inversely correlated with the movement of the price of the underlying asset. However, this inverse correlation shows the ongoing trend less clearly than the position of large speculators.​ We show moving average SMA 100 (blue line) and EMA 50 (orange line) on daily charts. ​Charts are made with the use of www.tradingview.com. The source of numerical data is www.myfxbook.com The Euro   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Feb 22, 2022 696682 214195 154889 59306 -5365 -3704 -15429 11725 Bullish Feb 15, 2022 702047 217899 170318 47581 1949 -1074 -9813 8739 Bullish Feb 08, 2022 700098 218973 180131 38842 14667 5410 -3716 9126 Bullish Feb 01, 2022 685431 213563 183847 29716 2479 155 1999 -1844 Weak bullish Jan 25, 2022 682952 213408 181848 31560 -8930 1507 -5469 6976 Bullish Jan 18, 2022 691882 211901 187317 24584 9589 7540 -11039 18579 Bullish         Total change 14389 9834 -43467 53301     Figure 1: The euro and COT positions of large speculators on a weekly chart and the EURUSD on D1   The total net positions of speculators reached 59 306 contracts last week, up by 11 725 contracts compared to the previous week. This change is due to a decrease in long positions by 3,704 contracts and a decrease in short positions by 15,429 contracts. Total net positions have increased by 53,301 contracts over the past 6 weeks. This change is due to the fact that large speculators ended 43,467 short positions and addded 9,834 long positions.  This data suggests continued bullish sentiment for the euro. Open interest, which fell by 5,465 contracts in the past week, shows that the downward movement that occurred in the euro last week was not supported by the volume and therefore it was a weak decline as there were fewer bearish traders in the market.  The euro weakened strongly last week under the influence of the war in Ukraine and reached strong support at 1.1120. Long-term resistance: 1.1280 – 1.1300. Next resistance is near 1.1370 – 1.1400. Support: 1.1100-1.1140   The British pound   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Feb 22, 2022 188443 42249 48058 -5809 -6859 -7902 144 -8046 Bearish Feb 15, 2022 195302 50151 47914 2237 -2646 5442 -5340 10782 Bullish Feb 08, 2022 197948 44709 53254 -8545 13941 15112 52 15060 Weak bearish Feb 01, 2022 184007 29597 53202 -23605 1967 -7069 8773 -15842 Bearish Jan 25, 2022 182040 36666 44429 -7763 -1194 -3094 4422 -7516 Bearish Jan 18, 2022 183234 39760 40007 -247 -17259 9254 -19665 28919 Weak bearish         Total Change -12050 11743 -11614 23357     Figure 2: The GBP and COT positions of large speculators on a weekly chart and the GBPUSD on D1 The total net positions of speculators last week amounted to - 5,809 contracts, down by 8,046 contracts compared to the previous week. This change is due to a decrease in long positions by 7,902 contracts and an increase in short positions by 144 contracts. Total net positions have increased by 23,357 contracts over the past 6 weeks. This change is due to speculators exiting 11,614 short positions and adding 11,743 long positions. The decline in total net positions of large speculators into negative territory indicates bearish sentiment for the pound. Open interest, which fell by 6,859 contracts last week, indicates that the decline in the pound that occurred last week was not supported by volume and was therefore weak. The pound, just as the euro, might be negatively impacted by risk-off sentiment which could then send the pound towards support which is at 1.3300 or possibly 1.3200. Long-term resistance: 1.3620-1.3640.  Next resistance is near 1.3680 – 1.3750. The resistance is also in the zone 1.3490 – 1.3520. Support is near 1.3270 – 1.3300 and then mainly in the zone 1.3200.     The Australian dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Feb 22, 2022 192579 11553 95633 -84080 1 -139 -2753 2614 Bullish Feb 15, 2022 192578 11692 98386 -86694 -3825 -5631 -4678 -953 Bearish Feb 08, 2022 196403 17323 103064 -85741 -510 -1512 4400 -5912 Bearish Feb 01, 2022 196913 18835 98664 -79829 6893 3714 270 3444 Weak bearish Jan 25, 2022 190020 15121 98394 -83273 8884 6070 889 5181 Weak bearish Jan 18, 2022 181136 9051 97505 -88454 -4317 -3332 -6364 3032 Weak bearish         Total Change 7126 -830 -8236 7406     Figure 3: The AUD and COT positions of large speculators on a weekly chart and the AUDUSD on D1 Total net speculator positions last week reached -84,080 contracts, up 2,614 contracts from the previous week. This change is due to a decrease in long positions by 139 contracts and a decrease in short positions by 2,753 contracts. This data suggests a weakening of the bearish sentiment for the Australian dollar, which is confirmed by the downtrend. Total net positions have increased by 7,406 contracts over the past 6 weeks. This change is due to speculators exiting 8,236 short contracts while exiting 830 long contracts. However, there was an increase in open interest of 1 contract last week. This means that the upward movement that occurred last week was weak in terms of volume because new money did not flow into the market. The Australian dollar is very sensitive to the international geopolitical situation. In the event of geopolitical instability, it can usually be expected to weaken especially in the AUDUSD pair and also the AUDJPY. However, last week the Australian dollar surprisingly strengthened and approached the resistance band. Long-term resistance: 0.7270-0.7310                                                                                                            Long-term support: 0.7085-0.7120.  A strong support is near 0.6960 – 0.6990.   The New Zealand dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Feb 22, 2022 56636 17343 28894 -11551 -7469 -7580 -5362 -2218 Bearish Feb 15, 2022 64105 24923 34256 -9333 9228 7755 6722 1033 Weak bearish Feb 08, 2022 54877 17168 27534 -10366 -3590 -2037 -3369 1332 Weak bearish Feb 01, 2022 58467 19205 30903 -11698 5151 3257 4182 -925 Bearish Jan 25, 2022 53316 15948 26721 -10773 8589 4336 6778 -2442 Bearish Jan 18, 2022 44727 11612 19943 -8331 2661 652 379 273 Weak bearish         Total Change 14570 6383 9330 -2947     Figure 4: The NZD and the position of large speculators on a weekly chart and the NZDUSD on D1 The total net positions of speculators reached a negative value last week - 11,551 contracts, having fallen by 2,218 contracts compared to the previous week. This change is due to a decrease in long positions by 7,580 contracts and a decrease in short positions by 7,580 contracts. This data suggests that the bearish sentiment on the NZ dollar continues. Total net positions have declined by 2,947 contracts over the past 6 weeks. This change is due to speculators adding 9,330 short positions and adding 6,383 long positions. Last week, open interest fell significantly by 7,469 contracts. Therefore, the upward movement in NZDUSD that occurred last week is not supported by volume and therefore the move was weak. The strengthening of the NZDUSD that occurred last week is somewhat surprising given the geopolitical tensions in Ukraine. This upward movement is forming a channel pattern, which may be a correction in the current downtrend trend that we can see on the daily or weekly chart. Long-term resistance: 0.6850 – 0.6890 Long-term support: 0.6590-0.6600 and the next support is at 0.6500 – 0.6530.   Explanation to the COT report The COT report shows the positions of major participants in the futures markets. Futures contracts are derivatives and are essentially agreements between two parties to exchange an underlying asset for a predetermined price on a predetermined date. They are standardised, specifying the quality and quantity of the underlying asset. They are traded on an exchange so that the total volume of these contracts traded is known.   Open interest: open interest is the sum of all open futures contracts (i.e. the sum of short and long contracts) that exist on a given asset. OI increases when a new futures contract is created by pairing a buyer with a seller. The OI decreases when an existing futures contract expires at a given expiry time or by settlement. Low or no open interest means that there is no interest in the market. High open interest indicates high activity and traders pay attention to this market. A rising open interest indicates that there is demand for the currency. That is, a rising OI indicates a strong current trend. Conversely, a weakening open interest indicates that the current trend is not strong. Open Interest Price action Interpretation Notes Rising Rising Strong bullish market New money flow in the particular asset, more bulls entered the market which pushes the price up. The trend is strong. Rising Falling Strong bearish market Price falls, more bearish traders entered the market which pushes the price down. The trend is strong. Falling Rising Weak bullish market Price is going up but new money do not flow into the market. Existing futures contracts expire or are closed. The trend is weak. Falling Falling Weak bearish market Price is going down, but new money do not flow into the market. Existing futures expire or are closed, the trend is weak.   Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. Traders should try to trade in the direction of these large speculators. The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. The COT data are usually reported every Friday and they show the status on Tuesday of the week. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.
USOIL Became A Rocketship, EURUSD Trades Ca. 1.110 And USDCAD Hits 7-Day-Low

USOIL Became A Rocketship, EURUSD Trades Ca. 1.110 And USDCAD Hits 7-Day-Low

Jing Ren Jing Ren 03.03.2022 08:54
EURUSD sees limited bounce The euro retreats as the ECB may dial back normalization amid the Ukraine crisis. A fall below the daily support at 1.1130 was an invalidation of the February rebound and forced buyers to bail out. The lack of support means that short-term sentiment has turned bearish once again. An oversold RSI may lift the pair temporarily due to profit-taking, but trend followers could be looking to sell into strength. 1.1230 is the closest resistance. A new round of sell-off may push the euro beyond 1.1050. USDCAD breaks support The Canadian dollar jumped after the Bank of Canada raised its key interest rate to 0.5%. A break below the demand zone, around 1.2680, has put buyers on the defensive. The daily support at 1.2640 was a major level. And its breach could trigger a sell-off towards 1.2560, threatening the rally from late January. Further south, January’s low at 1.2450 is a key floor to keep the greenback afloat. An oversold RSI may lead short-term sellers to exit, driving up the price briefly, but a rebound may be capped by 1.2700. USOIL bounces higher WTI crude skyrocketed as the war in Ukraine could drag on pushing up energy prices. The rally accelerated after it broke above the psychological tag of 100.00. The RSI’s overbought situation in both hourly and daily charts indicates overextension. Profit-taking may drive the price back down and let the bulls take a breather. 104.00 is the immediate support in this case. Sentiment is overwhelmingly bullish and pullbacks could be limited. 120.00 would be the next stop when volatility comes around again.
Positions of large speculators according to the COT report as at 1/3/2022

Positions of large speculators according to the COT report as at 1/3/2022

Purple Trading Purple Trading 07.03.2022 21:35
Positions of large speculators according to the COT report as at 1/3/2022 Total net speculator positions in the USD index fell 1,310 contracts last week. This change is the result of 35 contracts increase in long positions and a 1,345 contracts increase in short positions. Growth in total net speculator positions occurred last week in the euro, the British pound, the Australian dollar, and the Canadian dollar. Decreases in total net positions occurred in the New Zealand dollar, the Japanese yen, and the Swiss franc.   Following Russia's invasion to Ukraine, markets shifted into risk-off sentiment. This means that especially the euro and the pound are weakening. The Australian dollar and New Zealand dollar are strengthening due to rising prices of commodities that these countries export. The positions of speculators in individual currencies The total net positions of large speculators are shown in Table 1: If the value is positive then the large speculators are net long. If the value is negative, the large speculators are net short. Table 1: Total net positions of large speculators DatE USD Index EUR GBP AUD NZD JPY CAD CHF Mar 01, 2022 34774 64939 -337 -78336 -14172 -68732 14140 -15248 Feb 22, 2022 36084 59306 -5809 -84080 -11551 -63187 9253 -10987 Feb 15, 2022 35386 47581 2237 -86694 -9333 -66162 12170 -9715 Feb 08, 2022 33765 38842 -8545 -85741 -10366 -59148 14886 -9399 Feb 01, 2022 34571 29716 -23605 -79829 -11698 -60640 18264 -8239 Jan 25, 2022 36861 31560 -7763 -83273 -10773 -68273 12317 -8796 Note: The explanation of COT methodolody is at the the end of the report.   Notes: Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. ​The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.   Detailed analysis of selected currencies   Explanations:   Purple line and histogram: this is information on the total net position of large speculators. This information shows the strength and sentiment of an ongoing trend. It is the indicator r_COT Large Speculators (by Kramsken) in www.tradingview.com. Information on the positions of so-called hedgers is not shown in the chart, due to the fact that their main goal is not speculation, but hedging. Therefore, this group usually takes the opposite positions than the large speculators. For this reason, the positions of hedgers are inversely correlated with the movement of the price of the underlying asset. However, this inverse correlation shows the ongoing trend less clearly than the position of large speculators.​ We show moving average SMA 100 (blue line) and EMA 50 (orange line) on daily charts. ​Charts are made with the use of www.tradingview.com. The source of numerical data is www.myfxbook.com The Euro   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 01, 2022 719975 228385 163446 64939 23293 14190 8557 5633 Bullish Feb 22, 2022 696682 214195 154889 59306 -5365 -3704 -15429 11725 Bullish Feb 15, 2022 702047 217899 170318 47581 1949 -1074 -9813 8739 Bullish Feb 08, 2022 700098 218973 180131 38842 14667 5410 -3716 9126 Bullish Feb 01, 2022 685431 213563 183847 29716 2479 155 1999 -1844 Weak bullish Jan 25, 2022 682952 213408 181848 31560 -8930 1507 -5469 6976 Bullish         Total change 28093 16484 -23871 40355     Figure 1: The euro and COT positions of large speculators on a weekly chart and the EURUSD on D1   The total net positions of speculators reached 64,939 contracts last week, which is an increase by 5,633 contracts compared to the previous week. This change is due to an increase in long positions by 14,190 contracts and an increase in short positions by 8,557 contracts. These data suggest continued bullish sentiment in the euro. Open interest, which has increased by 23,293 contracts in the last week, shows that the downward movement that occurred in the euro last week was supported by volume and is therefore strong. The euro is weakening sharply under the influence of the war in Ukraine and we can see that support levels have not been respected in such a strong trend. In a strong downtrend it is very risky to try to catch the bottom and open bullish long positions.  Long-term resistance: 1.0980 – 1.1010. Next resistance is near 1.1120 – 1.1150. Support: 1.0640-1.0700 The British pound date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 01, 2022 211869 47679 48016 -337 23426 5430 -42 5472 Weak bearish Feb 22, 2022 188443 42249 48058 -5809 -6859 -7902 144 -8046 Bearish Feb 15, 2022 195302 50151 47914 2237 -2646 5442 -5340 10782 Bullish Feb 08, 2022 197948 44709 53254 -8545 13941 15112 52 15060 Weak bearish Feb 01, 2022 184007 29597 53202 -23605 1967 -7069 8773 -15842 Bearish Jan 25, 2022 182040 36666 44429 -7763 -1194 -3094 4422 -7516 Bearish         Total change 28635 7919 8009 -90     Figure 2: The GBP and COT positions of large speculators on a weekly chart and the GBPUSD on D1   The total net positions of speculators last week reached to -337 contracts, having increased by 5,472 contracts compared to the previous week. This change is due to an increase in long positions by 5,430 contracts and a decrease in short positions by 42 contracts. This suggests bearish sentiment, but it is weak as the total net positions of large speculators increased. Open interest, which rose by 23,426 contracts last week, means that the fall in the pound that occurred last week was supported by volume and is therefore strong. Risk off sentiment due to the war in Ukraine continues to weigh on the pound as well as the euro and therefore the pound is weakening strongly. Long-term resistance: 1.3270-1.3300.  Next resistance is near 1.3420 – 1.3440. The resistance is also in the zone 1.3490 – 1.3520. Support is near 1.3150 – 1.3200.     The Australian dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 01, 2022 189667 12720 91056 -78336 -2912 1167 -4577 5744 Weak bearish Feb 22, 2022 192579 11553 95633 -84080 1 -139 -2753 2614 Weak bearish Feb 15, 2022 192578 11692 98386 -86694 -3825 -5631 -4678 -953 Bearish Feb 08, 2022 196403 17323 103064 -85741 -510 -1512 4400 -5912 Bearish Feb 01, 2022 196913 18835 98664 -79829 6893 3714 270 3444 Weak bearish Jan 25, 2022 190020 15121 98394 -83273 8884 6070 889 5181 Weak bearish         Total change 8531 3669 -6449 10118     Figure 3: The AUD and COT positions of large speculators on a weekly chart and the AUDUSD on D1   The total net positions of speculators last week reached to - 78,336 contracts, up by 5,744 contracts compared to the previous week. This change is due to an increase in long positions by 1,167 contracts and a decrease in short positions by 4,577 contracts. This data suggests a weakening of bearish sentiment in the Australian dollar. However, last week we saw a decline in open interest by 2,912 contracts. This means that the upward movement that occurred last week in the AUDUSD was weak because new money did not flow into the market. The Australian dollar has been strengthening strongly recently, which is explained by the rise in the prices of commodities that Australia exports. These commodities include coal, gas and gold.  Long-term resistance: 0.7520-0.7560                                                                                                              Long-term support: 0.7085-0.7120.  A strong support is near 0.6960 – 0.6990.   The New Zealand dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 01, 2022 50389 10485 24657 -14172 -6247 -6858 -4237 -2621 Bearish Feb 22, 2022 56636 17343 28894 -11551 -7469 -7580 -5362 -2218 Bearish Feb 15, 2022 64105 24923 34256 -9333 9228 7755 6722 1033 Weak bearish Feb 08, 2022 54877 17168 27534 -10366 -3590 -2037 -3369 1332 Weak bearish Feb 01, 2022 58467 19205 30903 -11698 5151 3257 4182 -925 Bearish Jan 25, 2022 53316 15948 26721 -10773 8589 4336 6778 -2442 Bearish         Total change 5662 -1127 4714 -5841     Figure 4: The NZD and the position of large speculators on a weekly chart and the NZDUSD on D1     The total net positions of speculators last week reached a value of - 14,172 contracts, having fallen by 2,621 contracts compared to the previous week. This change is due to a decrease in long positions by 6,858 contracts and a decrease in short positions by 4,237 contracts. This data suggests that the bearish sentiment for the NZD continues. Last week, open interest fell significantly by 6,247 contracts. Therefore, the upward movement in the NZDUSD that occurred last week is not supported by volume and therefore the price action was weak. The strengthening of the NZDUSD that occurred last week is somewhat surprising given the geopolitical tensions in Ukraine and risk off sentiment. What helped the NZD rise are rising prices of commodities  such as milk, which New Zealand produces. Long-term resistance: 0.6850 – 0.6890 Long-term support: 0.6590-0.6600 and the next support is at 0.6500 – 0.6530.   Explanation to the COT report The COT report shows the positions of major participants in the futures markets. Futures contracts are derivatives and are essentially agreements between two parties to exchange an underlying asset for a predetermined price on a predetermined date. They are standardised, specifying the quality and quantity of the underlying asset. They are traded on an exchange so that the total volume of these contracts traded is known.   Open interest: open interest is the sum of all open futures contracts (i.e. the sum of short and long contracts) that exist on a given asset. OI increases when a new futures contract is created by pairing a buyer with a seller. The OI decreases when an existing futures contract expires at a given expiry time or by settlement. Low or no open interest means that there is no interest in the market. High open interest indicates high activity and traders pay attention to this market. A rising open interest indicates that there is demand for the currency. That is, a rising OI indicates a strong current trend. Conversely, a weakening open interest indicates that the current trend is not strong. Open Interest Price action Interpretation Notes Rising Rising Strong bullish market New money flow in the particular asset, more bulls entered the market which pushes the price up. The trend is strong. Rising Falling Strong bearish market Price falls, more bearish traders entered the market which pushes the price down. The trend is strong. Falling Rising Weak bullish market Price is going up but new money do not flow into the market. Existing futures contracts expire or are closed. The trend is weak. Falling Falling Weak bearish market Price is going down, but new money do not flow into the market. Existing futures expire or are closed, the trend is weak.   Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. Traders should try to trade in the direction of these large speculators. The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. The COT data are usually reported every Friday and they show the status on Tuesday of the week. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.
Forex Pairs Analysis: EURJPY, EURUSD And GBPUSD

Forex Pairs Analysis: EURJPY, EURUSD And GBPUSD

Jason Sen Jason Sen 09.03.2022 14:56
EURJPY holding the longer term 50% Fibonacci at 124.30/25 so I was wrong not to buy here! The pair beat minor resistance at 125.60/70 for the next target & strong resistance at 126.40/50. However the strongest resistance today is at 126.90/127.10. Shorts need stops above 127.50. Holding strong resistance at 126.40/50 this morning targets 15.70/60. If we continue lower look for 125.00 before a retest of the longer term 50% Fibonacci at 124.30/25. EURUSD meets strong resistance at 1.0975/95. Shorts need stops above 1.1015. A break higher meets very strong resistance at 1.1070/90. Shorts need stops above 1.1110. Holding below 1.0910 keeps the pressure on for 1.0860/50 before a retest of important 5 year trend line support at 1.0820/00. HOWEVER WE ALSO HAVE 37 YEAR TREND LINE SUPPORT AT 107.50/00. YES YOU READ THAT RIGHT - 37 YEARS, DATING BACK TO 1985!!! MOST OF YOU WERE PROBABLY NOT EVEN BORN. (2 YEARS LATER I STARTED TRADING!!) IF THIS LEVEL WERE TO BREAK IT WOULD ONLY BE THE START OF THE EURUSD COLLAPSE. INITIALLY WE TARGET 104.000/103.50 THEN 102.00/101.70. IF THIS LEVEL BREAKS WE ARE LIKELY TO FALL EVEN FASTER THAN WE HAVE OVER THE PAST MONTH. GBPUSD best support revised a little lower to 1.3150/20 (from the weekly chart). Longs need stops below 1.3090. A sustained break lower is a very significant longer term sell signal. Initially we target 1.300 then 1.3010/00 & 1.2980/60. Longs at 1.3150/20 target 1.3175/85 then first resistance at 1.3220/30. We should struggle to beat this level here initially, but shorts may be too risky. If we continue higher look for strong resistance at 1.3300/20. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
EURUSD Rallies, GBPUSD Moves Up A Little, USOIL Goes Back To "Normal" (?) Levels

EURUSD Rallies, GBPUSD Moves Up A Little, USOIL Goes Back To "Normal" (?) Levels

Jing Ren Jing Ren 10.03.2022 08:43
EURUSD bounces back The euro rallies on news that the EU may issue a joint bond to fund energy and defense. The pair found bids near May 2020’s lows (1.0810). An oversold RSI on the daily chart prompted sellers to take profit, easing the downward pressure. A rally above the immediate resistance at 1.0940 and a bullish MA cross may improve sentiment in the short term. However, buyers will need to clear the support-turned-resistance at 1.1160 before they could hope for a meaningful rebound. 1.0910 is the support in case of a pullback. GBPUSD inches higher The sterling claws back losses as risk appetite makes a timid return across the board. Following a three-month-long rebound on the daily chart, a lack of support at 1.3200 and a bearish MA cross shows strong selling pressure. A bounce-back above 1.3200 may only offer temporary relief as sellers potentially look to fade the rebound. 1.3350 is a key hurdle that sits along the 20-day moving average. 1.3080 is fresh support and its breach could trigger a new round of sell-off below the next daily support at 1.2880. USOIL breaks support WTI crude tumbled after the UAE said consider boosting production. The parabolic climb came to a halt at 129.00 and pushed the RSI into an extremely overbought condition on the daily chart. A bearish RSI divergence suggested a loss of momentum and foreshadowed a correction as traders would be wary of chasing the rally. A fall below 115.00 led buyers to bail out, triggering a wave of liquidation. 105.00 is the next support and a breakout could bring the price back to 95.00 near the 30-day moving average.
The Swing Overview – Week 10 2022

The Swing Overview – Week 10 2022

Purple Trading Purple Trading 14.03.2022 15:05
The Swing Overview – Week 10 The war in Ukraine has been going on for more than two weeks and there is no end in sight. However, the markets seem to have started to adapt to the new situation and the decline in the indices has stopped. Meanwhile, inflation in the Czech Republic rose to 11.1% and the ECB left rates unchanged as expected. There is extreme volatility in oil. After reaching 2008 price levels there has been a larger correction. The conflict in Ukraine   The high-profile meeting between Russian Foreign Minister Lavrov and his Ukrainian counterpart Kuleba did not bring a solution to end the war.  Russia continues to expect Ukraine to recognise Crimea as part of Russia, to recognise the independence of republics declared by pro-Russian separatists in eastern Ukraine, and not to join NATO. Kuleba commented that Ukraine will not surrender. So, unfortunately, the war continues.   The sanctions, which have caused the Russian economy a shock and which are being extended, should help to end the war. The US announced that it stopped taking Russian oil. However, European leaders have not agreed to stop taking Russian energy because of their current dependence on it. As a lesson from this war, the EU is preparing a plan to stop taking Russian gas by 2027.   Meanwhile, the markets have calmed down a bit and although a resolution to the conflict is nowhere in sight, the markets seem to have come to accept the war as a regional issue that will have a negative but limited impact on global economic growth. This can be seen in US 10-year bond rates, which have started to rise again.   Figure 1: 10-year government bond yield on the 4H chart and USD index on the daily chart   The US inflation at highest levels in 40 years Annual inflation in the US for February was 7.9%, the highest since January 1982. The biggest contributor to inflation is energy, which saw inflation reaching 25.6%, while gasoline prices were up 38%. These figures do not include recent developments in Europe. Continued supply-side logistics problems and strong demand, together with a tight labour market mean that higher inflation will last for a longer period. Figure 2: The inflation in the US   Next week, the US Fed will meet to respond to rising inflation. Interest rates are generally expected to rise by at least 0.25%.    The SP500 index Long-term investors in the SP 500 index track an indicator of the number of companies whose stock prices are above the 50-day average. Figure 3: The SP 500 Index and an indicator of the number of companies in the SP 500 Index above the 50-day moving average   This indicator has recently fallen to a value of 20. In the past, as the figure shows, reaching a value of 20 was mostly followed by an increase in the index. It is therefore likely that investors will now start buying the shares. Amazon shares gained significantly after the company announced a 20:1 stock split. The stock can thus be afforded by more retail investors. As for the current trend in the SP 500 index, it has been moving down recently. This may be a correction to the overall uptrend shown in Figure 3. In Figure 4 we have a short-term view.     Figure 4: SP 500 on H4 and D1 chart   From a technical analysis perspective, the moving averages suggest that the index is moving down. Investor interest in buying a dip has slowed this decline, which can be seen on the H4 chart where a higher low has formed.  Support is at 4,140 - 4,152. Resistance is at 4,288 - 4,300. The next resistance is at 4,385 - 4,415. The moving averages also serve as resistance.   The inflation in the Czech Republic has surpassed 11% Annual inflation in the Czech Republic for February 2022 was 11.1% (9.9% in January), higher than market expectations (10.3% was expected). This is the highest inflation in the Czech Republic since 1998. The largest contributors to inflation are housing (16%), electricity (22.6%) and gas (28.3%). This figure is likely to force the CNB to raise rates further. The Czech koruna has stalled against the euro at resistance around 25.80 - 25.90. The reason for the weakening of the koruna was geopolitical uncertainty regarding the war in Ukraine. Now it seems that the markets have absorbed this situation and this may be the reason for the appreciation of the koruna that occurred last week. If the war in Ukraine does not escalate further into new unexpected dimensions (such as the disruption of gas supplies to Europe from Russia), then the interest rate differential could again be an important factor, which, due to higher interest rates on the koruna, could lead to the koruna appreciation towards January levels.   Figure 5: EURCZK on the daily chart   Resistance: 25.80 - 25.90.  Support: 24.50 - 24.60 and then around 24.10   ECB and the euro The ECB left interest rates unchanged at 0%. At the same time, it surprised the market by ending its bond buying program in Q3, earlier than previous forecasts. The reaction to the news was a strong appreciation of the euro and it jumped to 1.1120 against the dollar. Eventually, however, the euro ended the session at around 1.10. The reason for this reversal is that tightening at a time when the economy is slowing could lead to stagflation. Strong US inflation data also contributed to the euro sell-off. The US is also much less vulnerable to sanctions against Russia than Europe.   Figure 6: EURUSD on the H4 and daily charts   From a technical point of view, we can see that the EURUSD has stalled right at the resistance band, which is at the 1.11-1.1130 level. The nearest support is 1.08-1.0850.   Crude Oil Brent crude oil reached $136 earlier this week, the highest level since July 2008. This was due to fears of a shortage of black liquid due to the conflict in Ukraine. However, Russia , which produces 7% of global demand, has announced that it will meet its contractual obligations. At the same time, Chevron said there was no shortage of oil and some other producers were ready to increase production if necessary. The EU has also announced that it will not impose an embargo on Russian oil imports, which would otherwise shock the market at a time when oil stocks are reaching multi-year lows, and will not join the US and the UK. Following this, oil began to retreat from its highs.   Figure 7: Brent crude oil on monthly and daily charts Resistance is in the 132-135 range. The nearest support is 103 - 105 USD per barrel. The next support is then in the band around USD 85 - 87 per barrel.  
Positions of large speculators according to the COT report as at 8/3/2022

Positions of large speculators according to the COT report as at 8/3/2022

Purple Trading Purple Trading 14.03.2022 16:01
Positions of large speculators according to the COT report as at 8/3/2022 Total net speculator positions in the USD index fell by 730 contracts last week. This change is the result of an increase in long positions by 2,270 contracts and an increase in short positions by 3,000 contracts. The decrease in total net speculator positions occurred last week in the euro, the British pound, and the Canadian dollar. The increase in total net positions occurred in the New Zealand dollar, the Australian dollar, the Japanese yen and the Swiss franc.     The positions of speculators in individual currencies The total net positions of large speculators are shown in Table 1: If the value is positive then the large speculators are net long. If the value is negative, the large speculators are net short. Table 1: Total net positions of large speculators DatE USD Index EUR GBP AUD NZD JPY CAD CHF Mar 08, 2022 34044 58844 -12526 -78195 -12379 -55856 7646 -9710 Mar 01, 2022 34774 64939 -337 -78336 -14172 -68732 14140 -15248 Feb 22, 2022 36084 59306 -5809 -84080 -11551 -63187 9253 -10987 Feb 15, 2022 35386 47581 2237 -86694 -9333 -66162 12170 -9715 Feb 08, 2022 33765 38842 -8545 -85741 -10366 -59148 14886 -9399 Feb 01, 2022 34571 29716 -23605 -79829 -11698 -60640 18264 -8239 Note: The explanation of COT methodolody is at the the end of the report.   Notes: Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. ​The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.   Detailed analysis of selected currencies   Explanations:   Purple line and histogram: this is information on the total net position of large speculators. This information shows the strength and sentiment of an ongoing trend. It is the indicator r_COT Large Speculators (by Kramsken) in www.tradingview.com. Information on the positions of so-called hedgers is not shown in the chart, due to the fact that their main goal is not speculation, but hedging. Therefore, this group usually takes the opposite positions than the large speculators. For this reason, the positions of hedgers are inversely correlated with the movement of the price of the underlying asset. However, this inverse correlation shows the ongoing trend less clearly than the position of large speculators.​ We show moving average SMA 100 (blue line) and EMA 50 (orange line) on daily charts. ​Charts are made with the use of www.tradingview.com. The source of numerical data is www.myfxbook.com date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 08, 2022 738990 242683 183839 58844 19015 14298 20393 -6095 Weak bullish Mar 01, 2022 719975 228385 163446 64939 23293 14190 8557 5633 Bullish Feb 22, 2022 696682 214195 154889 59306 -5365 -3704 -15429 11725 Bullish Feb 15, 2022 702047 217899 170318 47581 1949 -1074 -9813 8739 Bullish Feb 08, 2022 700098 218973 180131 38842 14667 5410 -3716 9126 Bullish Feb 01, 2022 685431 213563 183847 29716 2479 155 1999 -1844 Weak bullish         Total Change 56038 29275 1991 27284     Figure 1: The euro and COT positions of large speculators on a weekly chart and the EURUSD on D1 The total net positions of speculators reached 58,844 contracts last week, down by 6,095 contracts from the previous week. This change is due to an increase in long positions by 14,198 contracts and an increase in short positions by 20,393 contracts. These data suggest a weakening of the bullish sentiment for the euro. Open interest, which rose by 19,015 contracts in the past week, shows that the downward price action movement that occurred in the euro last week was supported by volume and it was  therefore a strong trend. The euro continues to weaken under the influence of the war in Ukraine and we can see that support levels have not been respected in such a strong trend. The ECB's announcement last week to end the bond purchases in 3Q 2022 also contributed to the euro’s weakness. This hawkish statement at a time when economic growth is slowing sparked fears of stagflation in the market and therefore the euro weakened following the ECB announcement.   Long-term resistance: 1.1120 – 1.1150. Support: 1.080-1.0850. The next support is at 1.0640-1.0700.   The British pound date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 08, 2022 246312 50982 63508 -12526 34443 3303 15492 -12189 Bearish Mar 01, 2022 211869 47679 48016 -337 23426 5430 -42 5472 Weak bearish Feb 22, 2022 188443 42249 48058 -5809 -6859 -7902 144 -8046 Bearish Feb 15, 2022 195302 50151 47914 2237 -2646 5442 -5340 10782 Bullish Feb 08, 2022 197948 44709 53254 -8545 13941 15112 52 15060 Weak bearish Feb 01, 2022 184007 29597 53202 -23605 1967 -7069 8773 -15842 Bearish         Total Change 64272 14316 19079 -4763     Figure 2: The GBP and COT positions of large speculators on a weekly chart and the GBPUSD on D1 The total net positions of speculators last week reached - 12,526 contracts, having fallen by 12,189 contracts compared to the previous week. This change is due to the growth in long positions by 3,303 contracts and the growth in short positions by 15,492 contracts. This suggests bearish sentiment as the total net speculators positions  are negative while there has been a further decline as well. Open interest, which rose by 34,443 contracts last week, means that the fall in the pound that occurred last week was supported by the volume and it was therefore a strong price action. Risk off sentiment due to the war in Ukraine continues to weigh on the pound as well as the euro and therefore the pound is weakening strongly. Long-term resistance: 1.3180-1.3210.  Next resistance is near 1.3270 – 1.3330. Support is near 1.3000.     The Australian dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 08, 2022 197094 19521 97716 -78195 7427 6801 6660 141 Weak bearish Mar 01, 2022 189667 12720 91056 -78336 -2912 1167 -4577 5744 Weak bearish Feb 22, 2022 192579 11553 95633 -84080 1 -139 -2753 2614 Weak bearish Feb 15, 2022 192578 11692 98386 -86694 -3825 -5631 -4678 -953 Bearish Feb 08, 2022 196403 17323 103064 -85741 -510 -1512 4400 -5912 Bearish Feb 01, 2022 196913 18835 98664 -79829 6893 3714 270 3444 Weak bearish         Total Change 7074 4400 -678 5078     Figure 3: The AUD and COT positions of large speculators on a weekly chart and the AUDUSD on D1 The total net positions of speculators last week reached 78,195 contracts, up by 141 contracts compared to the previous week. This change is due to the growth in long positions by 6,801 contracts and the growth in short positions by 6,660 contracts. This data suggests a weakening of the bearish sentiment for the Australian dollar. Last week we saw an increase in open interest of 7,427 contracts. This means that the downward movement that occurred last week was supported by volume as new money flowed into the market. The Australian dollar weakened quite significantly last week. This may be explained by the fact that there has been a fall in prices in commodities that Australia exports (e.g. gold, coal). The decline in commodity prices also reflects efforts to find a diplomatic solution to the war in Ukraine.  Long-term resistance: 0.7370-0.7440                                                                                                              Long-term support: 0.7085-0.7120.  A strong support is near 0.6960 – 0.6990.   The New Zealand dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 08, 2022 53250 15775 28154 -12379 2861 5290 3497 1793 Weak bearish Mar 01, 2022 50389 10485 24657 -14172 -6247 -6858 -4237 -2621 Bearish Feb 22, 2022 56636 17343 28894 -11551 -7469 -7580 -5362 -2218 Bearish Feb 15, 2022 64105 24923 34256 -9333 9228 7755 6722 1033 Weak bearish Feb 08, 2022 54877 17168 27534 -10366 -3590 -2037 -3369 1332 Weak bearish Feb 01, 2022 58467 19205 30903 -11698 5151 3257 4182 -925 Bearish         Total Change -66 -173 1433 -1606     Figure 4: The NZD and the position of large speculators on a weekly chart and the NZDUSD on D1 The total net positions of speculators reached a negative value last week - 12,379 contracts, having increased by 1,793 contracts compared to the previous week. This change is due to an increase in long positions by 5,290 contracts and an increase in short positions by 3,497 contracts. This data suggests that the bearish sentiment on the NZ dollar has weakened over the past week. Open interest rose significantly by 2,861 contracts last week. The downward movement in the NZDUSD that occurred last week was therefore supported by volume and therefore the move was strong. The weakening in the NZDUSD that occurred last week can be explained by the decline in the prices of commodities that New Zealand produces. Long-term resistance: 0.6850 – 0.6920 Long-term support: 0.6590-0.6600 and the next support is at 0.6500 – 0.6530.   Explanation to the COT report The COT report shows the positions of major participants in the futures markets. Futures contracts are derivatives and are essentially agreements between two parties to exchange an underlying asset for a predetermined price on a predetermined date. They are standardised, specifying the quality and quantity of the underlying asset. They are traded on an exchange so that the total volume of these contracts traded is known.   Open interest: open interest is the sum of all open futures contracts (i.e. the sum of short and long contracts) that exist on a given asset. OI increases when a new futures contract is created by pairing a buyer with a seller. The OI decreases when an existing futures contract expires at a given expiry time or by settlement. Low or no open interest means that there is no interest in the market. High open interest indicates high activity and traders pay attention to this market. A rising open interest indicates that there is demand for the currency. That is, a rising OI indicates a strong current trend. Conversely, a weakening open interest indicates that the current trend is not strong. Open Interest Price action Interpretation Notes Rising Rising Strong bullish market New money flow in the particular asset, more bulls entered the market which pushes the price up. The trend is strong. Rising Falling Strong bearish market Price falls, more bearish traders entered the market which pushes the price down. The trend is strong. Falling Rising Weak bullish market Price is going up but new money do not flow into the market. Existing futures contracts expire or are closed. The trend is weak. Falling Falling Weak bearish market Price is going down, but new money do not flow into the market. Existing futures expire or are closed, the trend is weak.   Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. Traders should try to trade in the direction of these large speculators. The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. The COT data are usually reported every Friday and they show the status on Tuesday of the week. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.
EURUSD Has Climbed A Bit, DAX (GER40) Has Moved Up Slightly, AUDUSD Chart Shows A Small Downtrend

EURUSD Has Climbed A Bit, DAX (GER40) Has Moved Up Slightly, AUDUSD Chart Shows A Small Downtrend

Jing Ren Jing Ren 15.03.2022 08:02
EURUSD struggles to rebound The US dollar bounces across the board as the Fed may possibly raise interest rates on Wednesday. The pair found support near May 2020’s lows around 1.0800. The RSI’s oversold condition on the daily chart prompted the bears to take some chips off the table, alleviating the pressure. 1.1110 is a fresh resistance and its breach could lift offers to 1.1270. In fact, this could turn sentiment around in the short term. Failing that, a break below 1.0830 could trigger a new round of sell-off towards March 2020’s lows near 1.0650. AUDUSD lacks support The Australian dollar slipped after dovish RBA minutes. The pair continues to pull back from its recent top at 0.7430. A drop below the demand zone at 0.7250 further puts the bulls on the defensive. The former support has turned into a resistance level. 0.7170 at the origin of a previous breakout is key support. An oversold RSI may raise buyers’ interest in this congestion area. A deeper correction could invalidate the recent rebound and send the Aussie to the daily support at 0.7090. GER 40 attempts to rebound The Dax 40 edges higher as Russia and Ukraine hold a fourth round of talks. The index bounced off the demand zone (12500) from the daily chart, a sign that price action could be stabilizing. The supply zone around the psychological level of 14000 sits next to the 20-day moving average, making it an important hurdle. A tentative breakout may have prompted sellers to cover. 14900 would be the target if the rebound gains momentum. On the downside, 13300 is fresh support, and 12720 is the second line of defense.
Forex Pairs: EUR/USD, USD/CAD - Video Analysis

Forex Pairs: EUR/USD, USD/CAD - Video Analysis

Jason Sen Jason Sen 21.03.2022 09:04
EURUSD could be forming a bear flag, meaning eventually we will break lower & make a new low below 1.0800 USDCAD remains very much in an erratic & random 9 month sideways trend. A scalpers market as I do not think we can hold trades for long before prices reverse. On Friday we made a high for the day exactly at strong support at 1.2600/1.2580. Longs need stops below 1.2550. Update daily by 05:00 GMT Today's Analysis. EURUSD beat first resistance at 1.1065/85 to target 1.1150/70 but reversed from 13 pips below here. First support at 1.0980/65. Longs need stops below 1.0955. A break lower is a sell signal targeting 1.0910/00. This is not a support so if we continue lower look for 1.0850 before a retest of the March low & important 5 year trend line support at 1.0825/05. Longs need stops below 1.0780. Key resistance at 1.1140/60. Shorts need stops above 1.1170. A break higher targets strong resistance at 1.1230/50. USDCAD tests strong support at 1.2600/1.2580. Longs need stops below 1.2550. A break lower is a sell signal targeting 1.2485/75. Longs at strong support at 1.2600/1.2580 target 1.2670/80 then first resistance at 1.2700/20 for profit taking before the weekend. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Markets are betting the Fed has it wrong again

[VIDEO] Forex Pairs - AUD/USD, GBP/USD, EUR/USD And USD/CAD Analysis

Jason Sen Jason Sen 23.03.2022 14:06
AUDUSD beat strong resistance at the March high at 7430/40 to test very strong resistance at 7480/90. Shorts need stops above 7510. A break higher is a medium term buy signal. Shorts at 7480/90 target 7440/30, perhaps as far as 7380/60. GBPUSD break above 1.3215/25 was our buy signal targeting 1.3300/20 - hit over night as I write. Eventually we could reach as far as resistance at 1.3400. A pull back to the neck line at 1.3230/20 is a buying opportunity with stop below 1.3300. EURUSD holding first resistance at 1.1.1045/1.1060 is a sell signal targeting 1.0975/65 then 1.0910/00. This is not a support so if we continue lower look for 1.0850 before a retest of the March low & important 5 year trend line support at 1.0825/05. Longs need stops below 1.0780. Shorts at 1.1045/60 stop above 1.1080. A break higher targets resistance at 1.1120/40. USDCAD tests strong support at 1.2600/1.2580. Longs need stops below 1.2550. A break lower is a sell signal targeting 1.2485/75. Longs at strong support at 1.2600/1.2580 target 1.2670/80 then first resistance at 1.2700/20 for profit taking before the weekend. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
The Swing Overview - Week 11 2022

The Swing Overview - Week 11 2022

Purple Trading Purple Trading 23.03.2022 16:13
The Swing Overview - Week 11 The fall in the indices that we have seen in recent days has stopped. The indices strengthened on expectations of a diplomatic solution to the war in Ukraine, which has been going on for more than three weeks. However, these negotiations have not led to any significant breakthrough yet, so the upside potential for the indices could be limited. In addition, the Fed has started its own war against inflation and raised interest rates for the first time in three years, which is rather negative news for equity indices in the short term. However, the statistics say that in the long run it does not mean a trend reversal for the SP 500 index. The Bank of England also raised rates, but the pound surprisingly weakened. The reason for this is in our article. The war in Ukraine   The war in Ukraine has been going on for more than three weeks now and there is still no end in sight. Sentiment has started to improve after reports on negotiations for a diplomatic solution to the war. However, Russia continues to make unrealistic demands that Ukraine cannot agree to. Negotiations have therefore have not led to a solution yet.   Meanwhile, the economic situation in Russia continues to deteriorate rapidly as a result of the sanctions. The credit rating agency Standard & Poor's has downgraded Russia's credit rating from the current grade CCC- to CC. Russia has already announced that it is having difficulty repaying its bonds. However, Russia managed to pay the coupon payments that were due this week, averting the country's imminent bankruptcy for now.   The war in Ukraine will have a negative impact on the global economy. World economic growth for 2022 is expected to fall from 4% to 3.2%. Apart from Russia and Ukraine, Europe and the UK will be hardest hit, where there is a significant risk of recession.   The Fed has raised interest rates The US Fed has launched a war on inflation and raised interest rates for the first time since December 2018. The current rate is 0.50% and further increases will continue. The Fed disclosed that rates are expected to rise to 2.80% within a year.  Figure 1: The evolution of interest rates in the US   The evolution of interest rates, over the last 25 years, is shown in Figure 1.   Jerome Powell commented that the Fed's main goal is to achieve price stability and maximum employment. He expects inflation, which has now reached 7.9%, to reach the target of 2%, but this will take longer than originally expected.    The problem is a persistent labour shortage, which is putting upward pressure on wages. However, the situation is already starting to normalise in some sectors, suggesting that this should not be an uncontrollable spiral wage growth that would strongly support inflation.   According to Powell, the US economy is in good shape and ready for monetary policy normalisation. Therefore, the Fed will start in May to reduce the bonds in its balance sheet, which has grown considerably to almost $9 trillion thanks to the support of the economy during the covid pandemic.   The Index SP500 As far as the impact of interest rate hikes is concerned, this should not change the long-term bullish market. Statistics confirm that over the following 12 months from the date of the hike, the index has reached higher levels in every case since 1983. Figure 2: The impact of the first interest rate hike on the performance of the SP 500 index. Source: Bloomberg     However, the statistics also show that in the short term, there were declines in the index within 3 months and this cannot be ruled out now as well. As for the current developments on the SP 500 index, it has recently bounced off its supports. The reason for this was the hope for a diplomatic solution to the war in Ukraine. However, this has stalled. The Fed also gave optimism to the indices with its statement about the economy doing well. Figure 3: SP 500 on H4 and D1 chart   Overall, the index is currently in a downtrend. In terms of technical analysis, the price has reached the resistance level which is at 4,383 - 4,420. According to the daily chart, the price has reached the EMA 50 moving average, which also serves as resistance. Support according to the H4 chart is at 4,328 - 4,334.  Significant support according to the daily chart is at 4 105 - 4 152.  German DAX index Figure 4: The German DAX index on H4 and daily chart   There was a significant deterioration in economic sentiment in Germany in March, as shown by the ZEW index, which reached a negative reading of -39.3. However, the DAX index, which is much more affected by the war in Ukraine than the US indices, strengthened last week.  The reason for the index's rise was mainly due to signs of a diplomatic solution to the conflict. The price climbed up to the resistance level on the H4 chart last week, which is in the area near the 14,500 price. The strong resistance according to the daily chart is in the range between 14,800 - 15,000.  The closest support according to the H4 chart is at 14,030 - 14,100.   The euro strengthened after the Fed announcement The euro price retested the resistance area which is in the area near 1.1130 - 1.1150 according to the daily chart. However, the Euro remains under pressure and although the ECB was surprisingly hawkish at the last meeting, it is still lagging behind compared to the US Fed. Moreover, the war in Ukraine, and according to some, the looming recession in the Eurozone, does not give much room for the Euro to strengthen. Therefore, it would not be surprising if the EURUSD falls to levels around 1. 0890 - 1. 0900, where the nearest support level is.     Figure 5: The EURUSD on the H4 and daily charts.   From a technical point of view, we can see that EURUSD is still in a downtrend according to the daily chart, so the current pullback may be an opportunity for trades in the short direction.   The Bank of England also raised interest rates The Bank of England raised its key interest rate by 0.25%.  Therefore, the rate is currently at 0.75%. By raising interest rates, the central bank is responding to rising inflation, which is expected to hit 8% in June 2022. But the pound surprisingly weakened sharply after the rate announcement. This was because the central bank was much more cautious in its expectations for the future of the economy. There are already signs that the war in Ukraine is having a negative impact on consumer confidence and is also having a negative impact on household incomes. This would slow economic activity. That is why the central bank has moved away from its previous aggressive hawkish tone.   Figure 6: The British Pound on H4 and daily chart.   A resistance is in the area of 1.3170 - 1.3200, where the price has halted. A support is at 1.3000.  
Positions of large speculators according to the COT report as at 15/3/2022

Positions of large speculators according to the COT report as at 15/3/2022

Purple Trading Purple Trading 23.03.2022 19:52
Positions of large speculators according to the COT report as at 15/3/2022 Total net speculator positions in the USD index fell by 5,664 contracts last week. This change is the result of a decrease in long positions by 6,264 contracts and a decrease in short positions by 600 contracts. The decline in total net speculator positions occurred last week in the euro, the British pound and the Japanese yen. The increase in total net positions occurred in the New Zealand dollar, the Australian dollar, the Canadian dollar and the Swiss franc. The significant growth in positions of large speculators in the commodity currencies AUD, NZD and CAD can be explained by the rising prices of commodities exported by these countries. A large number of options and futures contracts expired last week, which explains the large decline in open interest for each currency. The positions of speculators in individual currencies The total net positions of large speculators are shown in Table 1: If the value is positive then the large speculators are net long. If the value is negative, the large speculators are net short. Table 1: Total net positions of large speculators Date USD Index EUR GBP AUD NZD JPY CAD CHF Mar 15, 2022 28380 18794 -29061 -44856 3653 -62340 17740 -5229 Mar 08, 2022 34044 58844 -12526 -78195 -12379 -55856 7646 -9710 Mar 01, 2022 34774 64939 -337 -78336 -14172 -68732 14140 -15248 Feb 22, 2022 36084 59306 -5809 -84080 -11551 -63187 9253 -10987 Feb 15, 2022 35386 47581 2237 -86694 -9333 -66162 12170 -9715 Feb 08, 2022 33765 38842 -8545 -85741 -10366 -59148 14886 -9399   Note: The explanation of COT methodolody is at the the end of the report.   Notes: Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. ​The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.   Detailed analysis of selected currencies   Explanations:   Purple line and histogram: this is information on the total net position of large speculators. This information shows the strength and sentiment of an ongoing trend. It is the indicator r_COT Large Speculators (by Kramsken) in www.tradingview.com. Information on the positions of so-called hedgers is not shown in the chart, due to the fact that their main goal is not speculation, but hedging. Therefore, this group usually takes the opposite positions than the large speculators. For this reason, the positions of hedgers are inversely correlated with the movement of the price of the underlying asset. However, this inverse correlation shows the ongoing trend less clearly than the position of large speculators.​ We show moving average SMA 100 (blue line) and EMA 50 (orange line) on daily charts. ​Charts are made with the use of www.tradingview.com. The source of numerical data is www.myfxbook.com The Euro date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 15, 2022 666010 202040 183246 18794 -72980 -40643 -593 -40050 Weak bullish Mar 08, 2022 738990 242683 183839 58844 19015 14298 20393 -6095 Weak bullish Mar 01, 2022 719975 228385 163446 64939 23293 14190 8557 5633 Bullish Feb 22, 2022 696682 214195 154889 59306 -5365 -3704 -15429 11725 Bullish Feb 15, 2022 702047 217899 170318 47581 1949 -1074 -9813 8739 Bullish Feb 08, 2022 700098 218973 180131 38842 14667 5410 -3716 9126 Býčí         Total Change -19421 -11523 -601 -10922     Figure 1: The euro and COT positions of large speculators on a weekly chart and the EURUSD on D1   The total net positions of speculators reached 18 794 contracts last week and they are down by 40 050 contracts compared to the previous week. This change is due to a decrease in long positions by 40,643 contracts and an increase in short positions by 593 contracts. These data suggest a weakening of the bullish sentiment in the euro. The open interest, which fell by 72,980 contracts in the last week, shows that the upward movement that occurred in the euro last week was not supported by a volume and it is therefore a weak price action. The euro continues to weaken under the influence of the war in Ukraine. Last week it returned to a resistance level which could be an opportunity to trade short in the event of a downtrend.  Long-term resistance: 1.1120 – 1.1150. Support: 1.080-1.0850. The next support is at 1.0640-1.0700.   The British pound date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 15, 2022 188323 32442 61503 -29061 -57989 -18540 -2005 -16535 Bearish Mar 08, 2022 246312 50982 63508 -12526 34443 3303 15492 -12189 Bearish Mar 01, 2022 211869 47679 48016 -337 23426 5430 -42 5472 Weak bearish Feb 22, 2022 188443 42249 48058 -5809 -6859 -7902 144 -8046 Bearish Feb 15, 2022 195302 50151 47914 2237 -2646 5442 -5340 10782 Bullish Feb 08, 2022 197948 44709 53254 -8545 13941 15112 52 15060 Weak bearish         Total Change 4316 2845 8301 -5456     Figure 2: The GBP and COT positions of large speculators on a weekly chart and the GBPUSD on D1   The total net positions of speculators last week amounted to -29,061 contracts and they are down by 16,535 contracts compared to the previous week. This change is due to a decrease in long positions by 18,540 contracts and a decrease in short positions by 2,005 contracts. This suggests bearish sentiment as the total net positions of large speculators are negative while there is also their further decline. Open interest, which fell by 57,989 contracts last week, means that the rise in the pound price that occurred last week was not supported by volume and it is therefore a weak price action. Risk off sentiment due to the war in Ukraine continues to weigh on the pound and therefore the pound is weakening strongly. Although the Bank of England raised interest rates by 0.25% to 0.75% last week, it also warned of a decline in economic growth as a result of the war in Ukraine. The change in central bank rhetoric is a bearish signal for the pound. Long-term resistance: 1.3180-1.3210.  Next resistance is near 1.3270 – 1.3330. Support is near 1.3000.     The Australian dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 15, 2022 124521 24281 69137 -44856 -72573 4760 -28579 33339 Weak bearish Mar 08, 2022 197094 19521 97716 -78195 7427 6801 6660 141 Weak bearish Mar 01, 2022 189667 12720 91056 -78336 -2912 1167 -4577 5744 Weak bearish Feb 22, 2022 192579 11553 95633 -84080 1 -139 -2753 2614 Weak bearish Feb 15, 2022 192578 11692 98386 -86694 -3825 -5631 -4678 -953 Bearish Feb 08, 2022 196403 17323 103064 -85741 -510 -1512 4400 -5912 Bearish         Total Change -72392 5446 -29527 34973     Figure 3: The AUD and COT positions of large speculators on a weekly chart and the AUDUSD on D1     The total net positions of speculators last week reached - 44 856 contracts, having increased by 33 339 contracts compared to the previous week. This change is due to an increase in long positions by 4,706 contracts and a decrease in short positions by 28,579 contracts. This data suggests a weakening of bearish sentiment in the Australian dollar. Last week we saw a decline in open interest of 72,573 contracts. This means that the upward move that occurred last week was not supported by a volume and it was therefore a weak move as new money did not flow into the market. The Australian dollar strengthened strongly again last week and reached a resistance level. Long-term resistance: 0.7370-0.7440 Long-term support: 0.7160-0.7180.  A strong support is near 0.7080 – 0.7120.   The New Zealand dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 15, 2022 39200 21493 17840 3653 -14050 5718 -10314 16032 Bullish Mar 08, 2022 53250 15775 28154 -12379 2861 5290 3497 1793 Weak bearish Mar 01, 2022 50389 10485 24657 -14172 -6247 -6858 -4237 -2621 Bearish Feb 22, 2022 56636 17343 28894 -11551 -7469 -7580 -5362 -2218 Bearish Feb 15, 2022 64105 24923 34256 -9333 9228 7755 6722 1033 Weak bearish Feb 08, 2022 54877 17168 27534 -10366 -3590 -2037 -3369 1332 Weak bearish         Total Change -19267 2288 -13063 15351     Figure 4: The NZD and the position of large speculators on a weekly chart and the NZDUSD on D1   The total net positions of speculators reached 3,653 contracts last week and they are up by 16,032 contracts compared to the previous week. This change is due to an increase in long positions by 5,718 contracts and a decrease in short positions by 10,314 contracts. This data suggests that there was bullish sentiment on the New Zealand dollar last week. Open interest fell significantly by 14,050 contracts last week. Therefore, the upward movement in the NZDUSD that occurred last week was not supported by volume and therefore the move was weak. The NZDUSD strengthened strongly last week and reached the resistance level. Long-term resistance: 0.690 – 0.6930 Long-term support: 0.6730-0.6740 and the next support is at 0.6590 – 0.6600.   Explanation to the COT report The COT report shows the positions of major participants in the futures markets. Futures contracts are derivatives and are essentially agreements between two parties to exchange an underlying asset for a predetermined price on a predetermined date. They are standardised, specifying the quality and quantity of the underlying asset. They are traded on an exchange so that the total volume of these contracts traded is known.   Open interest: open interest is the sum of all open futures contracts (i.e. the sum of short and long contracts) that exist on a given asset. OI increases when a new futures contract is created by pairing a buyer with a seller. The OI decreases when an existing futures contract expires at a given expiry time or by settlement. Low or no open interest means that there is no interest in the market. High open interest indicates high activity and traders pay attention to this market. A rising open interest indicates that there is demand for the currency. That is, a rising OI indicates a strong current trend. Conversely, a weakening open interest indicates that the current trend is not strong. Open Interest Price action Interpretation Notes Rising Rising Strong bullish market New money flow in the particular asset, more bulls entered the market which pushes the price up. The trend is strong. Rising Falling Strong bearish market Price falls, more bearish traders entered the market which pushes the price down. The trend is strong. Falling Rising Weak bullish market Price is going up but new money do not flow into the market. Existing futures contracts expire or are closed. The trend is weak. Falling Falling Weak bearish market Price is going down, but new money do not flow into the market. Existing futures expire or are closed, the trend is weak.   Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. Traders should try to trade in the direction of these large speculators. The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. The COT data are usually reported every Friday and they show the status on Tuesday of the week. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.
Euro (EUR), Japanese Yen And Dollar (USD) Interactions. Dollar Index (DXY) Looks Quite Fine. A Year Full Of Fed Decisions...

Euro (EUR), Japanese Yen And Dollar (USD) Interactions. Dollar Index (DXY) Looks Quite Fine. A Year Full Of Fed Decisions...

Alex Kuptsikevich Alex Kuptsikevich 28.03.2022 12:44
There has been a lot of talk lately about the decline of the US dollar's reserve status. However, investors and traders should separate long-term trends from short-term market impulses. Reserve fund managers often prefer to refrain from active selling so as not to cause unnecessary market turbulence, so all reserve trends are stretched out over decades. As long as there is no real threat to the existence of the dollar and the solvency of the US government, managers will avoid making active moves to sell dollar assets. And all the revolutionary changes, such as switching to national currencies, will only result in CBs buying fewer new dollars. But it has little effect on the exchange rate. Right now, we are seeing the opposite picture, as the main competitors are under pressure. Investors are getting rid of the Japanese yen as the Bank of Japan accelerates its currency printing to buy bonds out of the market to stem rising yields. The local government is overburdened with debt, and the economy is still stalling. The only market solution is a devaluation of the yen, which would make exports from Japan more competitive and boost domestic spending. The single currency is suffering from a spike in energy prices and economic problems related to the war in Ukraine. Trading below 1.1000, the EURUSD pair is now where it was heading for the last six months before the pandemic. The medium-term outlook for the dollar is largely influenced by the extent to which the Fed will be able to implement policy tightening. More accurately, how Fed policy compares with the policy of the Bank of Japan, the ECB, or another major central bank. The Fed is clearly acting with greater amplitude, setting itself up for 7 rate hikes this year, which is far more than one would expect from Japan or the eurozone. Moreover, the US remains much further away from the war in Ukraine in business and trade terms than its biggest competitors, which means it can continue to benefit from capital inflows as a haven.
EUR/USD - EUR Has Strengthened Significantly, US OIL Has Plunged, What About CAD?

EUR/USD - EUR Has Strengthened Significantly, US OIL Has Plunged, What About CAD?

Jing Ren Jing Ren 31.03.2022 07:41
EURUSD attempts reversal The US dollar weakened after the Q4 GDP failed to impress. The euro gained momentum after it broke above 1.1130 which sits next to the 30-day moving average. 1.1230 at the origin of the March sell-off is a major resistance where medium-term sellers might be waiting to double down. Further pressure could be expected if intraday buyers take profit as the RSI shows a double top in the overbought area. 1.1070 is a fresh support. 1.0980 at the base of the current breakout is an important level to safeguard the rebound. USDCAD breaks daily support The Canadian dollar inched higher on expectations of aggressive tightening by the Bank of Canada. The US counterpart has given up all its gains from earlier this year. In turn, this indicates a lack of commitment from the buy-side. A tentative rally above 1.2590 has failed to secure follow-ups, further undermining the US dollar. 1.2400 is the next target after a drop below 1.2450 and a deeper correction would send the price to October’s lows around 1.2300. A rebound could be capped by fresh resistance at 1.2520. USOIL bounces off psychological level WTI crude rallies as the EIA shows a larger-than-expected fall in inventories. The price saw solid support in the demand area between the psychological level of 100.00 and the 30-day moving average (103.00). A bullish RSI divergence in this congestion zone suggests a loss of momentum in the retracement. A follow-up close above 107.00 would prompt sellers to cover, easing short-term pressure in the process. 114.00 is the next resistance and a breakout could lift offers to 129.00. 94.00 is a critical support to keep the rally intact.
Economic Indicators To Affect US Dollar Rate Today. Awaiting Jobs Data

Economic Indicators To Affect US Dollar Rate Today. Awaiting Jobs Data

Alex Kuptsikevich Alex Kuptsikevich 01.04.2022 10:37
On Friday, markets have gone into wait-and-see mode ahead of the US labour market data release later. Average market forecasts suggest that the economy created around 500K jobs in March, of which 480K came from the private sector. Such data would narrow the gap between the peak before the pandemic to 1.5 million. Given that some job seekers have left the job market during this time, it becomes clear how tight the market remains. And this will intensify the struggle of employers. From the new data, analysts, on average, expect a further acceleration of the wage growth to 5.5% YoY against 5.1% a month earlier and a 5.4% growth of the personal consumption price index in February. Thus, the labour market has an additional pro-inflationary effect on prices as more money is available in the US economy and competition for goods tightens. If the labour market does manage to add more than half a million jobs in March, we should expect a severe tightening of the rhetoric of the US monetary authorities in the coming weeks. It will not be surprising if we see more willingness of FOMC officials to hike the interest rate by 50 points at once on the 05th of May. For the speculative currency market, robust US employment data has the potential to put the Dollar back on the upside, making the US the only economy capable of such a sharp monetary policy tightening in the coming months. The dollar index has been moving in an upward channel since the middle of last year, adding more than 11% from the bottom to the peak. Earlier in the week, the DXY pulled back after the Russia-Ukraine talks in Istanbul. However, monetary policy could provide continued and sustained support for the US currency, very soon returning the Dollar to renew its two-year highs in the area above 100. For EURUSD, this could mean a consolidation under 1.1000 and GBPUSD under 1.3000.
Record low consumer sentiment and lower stock prices

GBP Loses! EUR Gains! NFP (Non Farm Payrolls) Is Released And We Know How Have Forex Pairs Reacted To This Week's Events!

Mikołaj Marcinowski Mikołaj Marcinowski 01.04.2022 23:37
It was another week full of events, geopolitical news and economic indicators releases. As the Forex pairs charts show the fluctuation weren’t always slight and developed an interesting outlook ahead of April which has just begun. EUR/USD gained over 0.5% Let’s begin with EUR/USD. Of course this pair is significantly affected by the slowly ceasing (?) conflict between Russia and Ukraine. As we can see on the chart there was a huge rise on Tuesday as the tensions were reported to loose its momentum. Cease fire has been said to come shortly and this optimism seems to had remained till the end of the week. There’s no doubt today’s fluctuations were caused by the release of NFP. The following week’s FOMC Meeting Minutes will surely let us have a closer look of dollar’s rate future. EUR/GBP gained ca. 1.1% EUR has been fighting all the week to finally beat British pound. It seems that the single currency needs to be triggered, but only a little, to rise significantly. Naturally these supporters were positive news about cease fire in the eastern Europe. In the following week BoE’s Bailey speaks and we can expect that it will be an introduction to next monetary policy decisions. USD/CHF – Swiss franc strengthened… The beginning of the week wasn’t so optimistic for CHF. Before the news coming from Ukraine it was losing the fight with dollar. The situation got better after positive news about possible cease fire. USD/PLN – Zloty feels good Poland lies close to the area where the conflict takes place. Because of corelations and other factors Polish zloty was hit several times. After tightening of monetary policy (next decisions to come shortly) and optimistic signals from Ukraine zloty strenghthened again gaining 1.6% over the week. Source/Data: TradingView.com Charts: Courtesy of TradingView.com
Positions of large speculators according to the COT report as at 22/3/2022

Positions of large speculators according to the COT report as at 22/3/2022

Purple Trading Purple Trading 03.04.2022 21:41
Positions of large speculators according to the COT report as at 22/3/2022 Total net speculator positions in the USD index rose by 1,355 contracts last week. This change is the result of an increase in long positions of 3,794 contracts and an increase in short positions of 2,539 contracts. There was a significant decrease in the total net positions of large speculators in the Canadian dollar last week, which fell by 22,690 contracts. At the same time, total net positions of large speculators moved from bullish to overall bearish sentiment for the first time in 10 weeks. The rise in total net positions of large speculators occurred only in the euro last week. There was a decline in total net positions in the other currencies monitored. The positions of speculators in individual currencies The total net positions of large speculators are shown in Table 1: If the value is positive then the large speculators are net long. If the value is negative, the large speculators are net short.   Table 1: Total net positions of large speculators DatE USD Index EUR GBP AUD NZD JPY CAD CHF Mar 22, 2022 29635 23843 -37244 -51189 2520 -78482 -4940 -8424 Mar 15, 2022 28380 18794 -29061 -44856 3653 -62340 17740 -5229 Mar 08, 2022 34044 58844 -12526 -78195 -12379 -55856 7646 -9710 Mar 01, 2022 34774 64939 -337 -78336 -14172 -68732 14140 -15248 Feb 22, 2022 36084 59306 -5809 -84080 -11551 -63187 9253 -10987 Feb 15, 2022 35386 47581 2237 -86694 -9333 -66162 12170 -9715   Note: The explanation of COT methodolody is at the the end of the report.   Notes: Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. ​The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.   Detailed analysis of selected currencies   Explanations:   Purple line and histogram: this is information on the total net position of large speculators. This information shows the strength and sentiment of an ongoing trend. It is the indicator r_COT Large Speculators (by Kramsken) in www.tradingview.com. Information on the positions of so-called hedgers is not shown in the chart, due to the fact that their main goal is not speculation, but hedging. Therefore, this group usually takes the opposite positions than the large speculators. For this reason, the positions of hedgers are inversely correlated with the movement of the price of the underlying asset. However, this inverse correlation shows the ongoing trend less clearly than the position of large speculators.​ We show moving average SMA 100 (blue line) and EMA 50 (orange line) on daily charts. ​Charts are made with the use of www.tradingview.com. The source of numerical data is www.myfxbook.com The Euro   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 22, 2022 658817 207051 183208 23843 -7193 5011 -38 5049 Bullish Mar 15, 2022 666010 202040 183246 18794 -72980 -40643 -593 -40050 Weak bullish Mar 08, 2022 738990 242683 183839 58844 19015 14298 20393 -6095 Weak bullish Mar 01, 2022 719975 228385 163446 64939 23293 14190 8557 5633 Bullish Feb 22, 2022 696682 214195 154889 59306 -5365 -3704 -15429 11725 Bullish Feb 15, 2022 702047 217899 170318 47581 1949 -1074 -9813 8739 Bullish         Total Change -41281 -11922 3077 -14999     Figure 1: The euro and COT positions of large speculators on a weekly chart and the EURUSD on D1   The total net positions of speculators reached 23,843 contracts last week, up by 5,049 contracts compared to the previous week. This change is due to an increase in long positions by 5,011 contracts and a decrease in short positions by 38 contracts. These data suggest bullish sentiment for the euro. Open interest fell by 7,193 contracts last week. This shows that the downward movement that occurred in the euro last week was not supported by the volume and is therefore a weak trend. The euro continues to move in a downtrend. It returned to a resistance level last week, which could be an opportunity to trade short.  Long-term resistance: 1.1120 – 1.1150. Support: 1.080-1.0850. The next support is at 1.0650-1.0700. The support can b also a value around 1.0900.   The British pound   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 22, 2022 195712 32753 69997 -37244 7389 311 8494 -8183 Bearish Mar 15, 2022 188323 32442 61503 -29061 -57989 -18540 -2005 -16535 Bearish Mar 08, 2022 246312 50982 63508 -12526 34443 3303 15492 -12189 Bearish Mar 01, 2022 211869 47679 48016 -337 23426 5430 -42 5472 Weak bearish Feb 22, 2022 188443 42249 48058 -5809 -6859 -7902 144 -8046 Bearish Feb 15, 2022 195302 50151 47914 2237 -2646 5442 -5340 10782 Bullish         Total Change -2236 -11956 16743 -28699     Figure 2: The GBP and COT positions of large speculators on a weekly chart and the GBPUSD on D1   The total net positions of speculators last week reached - 37,244 contracts, down by 8,183 contracts compared to the previous week. This change is due to the growth of long positions by 311 contracts and the growth of short positions by 8,494 contracts. This suggests bearish sentiment as the total net positions of large speculators are negative while there has been a further decline. Open interest rose by 7,389 contracts last week. This means that the modest rise in the pound that occurred last week was supported by the volume and is therefore strong. However, the pound's growth was not significant. In addition, a pin bar formed on the weekly chart which would suggest more of a further weakening in line with sentiment. Long-term resistance: 1.3270 – 1.3300. Support is near 1.3000.     The Australian dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 22, 2022 127767 23747 74936 -51189 3246 -534 5799 -6333 Bearish Mar 15, 2022 124521 24281 69137 -44856 -72573 4760 -28579 33339 Weak bearish Mar 08, 2022 197094 19521 97716 -78195 7427 6801 6660 141 Weak bearish Mar 01, 2022 189667 12720 91056 -78336 -2912 1167 -4577 5744 Weak bearish Feb 22, 2022 192579 11553 95633 -84080 1 -139 -2753 2614 Weak bearish Feb 15, 2022 192578 11692 98386 -86694 -3825 -5631 -4678 -953 Bearish         Total Change -68636 6424 -28128 34552     Figure 3: The AUD and COT positions of large speculators on a weekly chart and the AUDUSD on D1   The total net positions of speculators last week reached - 51,189 contracts, down by 6,333 contracts compared to the previous week. This change is due to a decrease in long positions by 534 contracts and an increase in short positions by 5,799 contracts. This data suggests a continuation of bearish sentiment in the Australian dollar. Last week there was an increase in open interest of 3,246 contracts. This means that the upward move that occurred last week was supported by the volume and was therefore strong as new money flowed into the market. The Australian dollar strengthened strongly again last week and reached a significant resistance level. Long-term resistance: 0.7510-0.7560                                                                                                               Long-term support: 0.7370-0.7440.  A strong support is near 0.7160 – 0.7180.   The New Zealand dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 22, 2022 35256 17156 14636 2520 -3944 -4337 -3204 -1133 Weak bullish Mar 15, 2022 39200 21493 17840 3653 -14050 5718 -10314 16032 Bullish Mar 08, 2022 53250 15775 28154 -12379 2861 5290 3497 1793 Weak bearish Mar 01, 2022 50389 10485 24657 -14172 -6247 -6858 -4237 -2621 Bearish Feb 22, 2022 56636 17343 28894 -11551 -7469 -7580 -5362 -2218 Bearish Feb 15, 2022 64105 24923 34256 -9333 9228 7755 6722 1033 Weak bearish         Total Change -19621 -12 -12898 12886     Figure 4: The NZD and the position of large speculators on a weekly chart and the NZDUSD on D1   The total net positions of speculators reached 2,520 contracts last week, down by 1,133 contracts from the previous week. This change is due to a decrease in long positions by 4,337 contracts and a decrease in short positions by 3,204 contracts. This data suggests that there was a weakening of bullish sentiment in the New Zealand dollar last week. Open interest fell by 3,944 contracts last week. Therefore, the upward movement in the NZDUSD that occurred last week was not supported by the volume and therefore the move was weak. The NZDUSD strengthened strongly last week and reached the resistance level. Long-term resistance: 0.6980 – 0.7000 Long-term support: 0.6860-0.6920 and the next support is at 0.6730 – 0.6740.   Explanation to the COT report The COT report shows the positions of major participants in the futures markets. Futures contracts are derivatives and are essentially agreements between two parties to exchange an underlying asset for a predetermined price on a predetermined date. They are standardised, specifying the quality and quantity of the underlying asset. They are traded on an exchange so that the total volume of these contracts traded is known.   Open interest: open interest is the sum of all open futures contracts (i.e. the sum of short and long contracts) that exist on a given asset. OI increases when a new futures contract is created by pairing a buyer with a seller. The OI decreases when an existing futures contract expires at a given expiry time or by settlement. Low or no open interest means that there is no interest in the market. High open interest indicates high activity and traders pay attention to this market. A rising open interest indicates that there is demand for the currency. That is, a rising OI indicates a strong current trend. Conversely, a weakening open interest indicates that the current trend is not strong. Open Interest Price action Interpretation Notes Rising Rising Strong bullish market New money flow in the particular asset, more bulls entered the market which pushes the price up. The trend is strong. Rising Falling Strong bearish market Price falls, more bearish traders entered the market which pushes the price down. The trend is strong. Falling Rising Weak bullish market Price is going up but new money do not flow into the market. Existing futures contracts expire or are closed. The trend is weak. Falling Falling Weak bearish market Price is going down, but new money do not flow into the market. Existing futures expire or are closed, the trend is weak.   Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. Traders should try to trade in the direction of these large speculators. The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. The COT data are usually reported every Friday and they show the status on Tuesday of the week. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.
EURUSD And XAUUSD Trade Lower Than Before. UK100 Gains Gradually

EURUSD And XAUUSD Trade Lower Than Before. UK100 Gains Gradually

Jing Ren Jing Ren 04.04.2022 07:34
EURUSD seeks support The US dollar rallied after March’s average hourly wages jumped by 5.6%. The euro came to a halt in the supply zone at the origin of the March sell-off (1.1180). A bearish RSI divergence pointed to softness in the rebound. A fall below 1.1120 then 1.1070 prompted buyers to bail out, further weighing on overall sentiment. 1.0980 at the base of the recent bullish impetus is major support. Its breach could invalidate the recovery and trigger a new round of sell-offs. The bulls need to clear 1.1120 to regain the upper hand. XAUUSD builds support Gold retreats as the US dollar finds support from a fall in the jobless rate. On the daily chart, price action still holds above the demand zone between 1890 and 1900 which is a sign of strong buying interest. A break above 1940 forced sellers out. This may also foreshadow a reversal. Sentiment would improve if the precious metal stays above 1915. A bullish close above 1960 could extend the rally to the psychological level of 2000. On the downside, 1890 is a critical level to maintain the bulls’ optimism. UK 100 consolidates gains The FTSE 100 treads water dragged by weaker energy stocks. A bullish MA cross on the daily chart suggests that the index could be back on track in the medium term. The intraday direction is still up despite its choppiness. A close above 7590 would extend the rally to this year’s high at 7690. Trend followers may see pullbacks as a bargain opportunity. The RSI’s oversold condition attracted some buying interest over 7460. A deeper correction would send the index to 7380 which coincides with the moving averages.
Positions of large speculators according to the COT report as at 29/3/2022

Positions of large speculators according to the COT report as at 29/3/2022

Purple Trading Purple Trading 11.04.2022 06:40
Positions of large speculators according to the COT report as at 29/3/2022 Total net speculator positions in the USD index rose by 1,306 contracts last week. This change is the result of an increase in long positions by 1,409 contracts and an increase in short positions by 103 contracts. Growth in total net positions occurred last week in the euro, the Australian dollar and the Canadian dollar. There were declines in the total net positions of large speculators in the British pound, the New Zealand dollar, the Japanese yen and the Swiss franc. In the Japanese yen, in particular, the decline in total net positions of large speculators has been very strong. Over the past five weeks, total net positions have decreased by 38 944 contracts. The total net positions of large speculators are the most bearish for the yen in the last 20 weeks. This may be due to the Bank of Japan's continuing dovish monetary policy to support Japanese economic growth. The positions of speculators in individual currencies The total net positions of large speculators are shown in Table 1: If the value is positive then the large speculators are net long. If the value is negative, the large speculators are net short.   Table 1: Total net positions of large speculators DatE USD Index EUR GBP AUD NZD JPY CAD CHF Mar 29, 2022 30941 21374 -40070 -49606 -867 -102131 1535 -11579 Mar 22, 2022 29635 23843 -37244 -51189 2520 -78482 -4940 -8424 Mar 15, 2022 28380 18794 -29061 -44856 3653 -62340 17740 -5229 Mar 08, 2022 34044 58844 -12526 -78195 -12379 -55856 7646 -9710 Mar 01, 2022 34774 64939 -337 -78336 -14172 -68732 14140 -15248 Feb 22, 2022 36084 59306 -5809 -84080 -11551 -63187 9253 -10987   Note: The explanation of COT methodolody is at the the end of the report.   Notes: Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. ​The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.   Detailed analysis of selected currencies   Explanations:   Purple line and histogram: this is information on the total net position of large speculators. This information shows the strength and sentiment of an ongoing trend. It is the indicator r_COT Large Speculators (by Kramsken) in www.tradingview.com. Information on the positions of so-called hedgers is not shown in the chart, due to the fact that their main goal is not speculation, but hedging. Therefore, this group usually takes the opposite positions than the large speculators. For this reason, the positions of hedgers are inversely correlated with the movement of the price of the underlying asset. However, this inverse correlation shows the ongoing trend less clearly than the position of large speculators.​ We show moving average SMA 100 (blue line) and EMA 50 (orange line) on daily charts. ​Charts are made with the use of www.tradingview.com. The source of numerical data is www.myfxbook.com   The Euro   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 29, 2022 662415 200043 178669 21374 3598 -7008 -4539 2469 Weak bullish Mar 22, 2022 658817 207051 183208 23843 -7193 5011 -38 5049 Bullish Mar 15, 2022 666010 202040 183246 18794 -72980 -40643 -593 -40050 Weak bullish Mar 08, 2022 738990 242683 183839 58844 19015 14298 20393 -6095 Weak bullish Mar 01, 2022 719975 228385 163446 64939 23293 14190 8557 5633 Bullish Feb 22, 2022 696682 214195 154889 59306 -5365 -3704 -15429 11725 Bullish         Total Change -39632 -17856 8351 -26207     Figure 1: The euro and COT positions of large speculators on a weekly chart and the EURUSD on D1   The total net positions of speculators reached 21,374 contracts last week, down by 2,469 contracts compared to the previous week. This change is due to a decrease in long positions by 7,008 contracts and a decrease in short positions by 4,539 contracts. This data indicates weak bullish sentiment for the euro. Open interest has risen by 3 598 contracts in the last week. This shows that the upward movement that occurred in the euro last week was supported by a volume and is therefore strong price action. The euro continues to move in a downtrend. Last week it returned to the resistance level from which it bounced downwards. Long-term resistance: 1.1160 – 1.1180 Support: 1.0950-1.0980 and the next support is at 1.080-1.0850.   The British pound   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 29, 2022 224365 30624 70694 -40070 28653 -2129 697 -2826 Bearish Mar 22, 2022 195712 32753 69997 -37244 7389 311 8494 -8183 Bearish Mar 15, 2022 188323 32442 61503 -29061 -57989 -18540 -2005 -16535 Bearish Mar 08, 2022 246312 50982 63508 -12526 34443 3303 15492 -12189 Bearish Mar 01, 2022 211869 47679 48016 -337 23426 5430 -42 5472 Weak bearish Feb 22, 2022 188443 42249 48058 -5809 -6859 -7902 144 -8046 Bearish         Total Change 29063 -19527 22780 -42307     Figure 2: The GBP and COT positions of large speculators on a weekly chart and the GBPUSD on D1   The total net positions of speculators last week reached - 37,244 contracts, down by 8,183 contracts compared to the previous week. This change is due to the growth of long positions by 311 contracts and the growth of short positions by 8,494 contracts. This suggests bearish sentiment as the total net positions of large speculators are negative while there has been a further decline. Open interest rose by 7,389 contracts last week. This means that the modest rise in the pound that occurred last week was supported by the volume and is therefore strong. However, the pound's growth was not significant. In addition, a pin bar formed on the weekly chart which would suggest more of a further weakening in line with sentiment. Long-term resistance: 1.3270 – 1.3300. Support is near 1.3000.     The Australian dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 29, 2022 143007 33960 83566 -49606 15240 10213 8630 1583 Weak bearish Mar 22, 2022 127767 23747 74936 -51189 3246 -534 5799 -6333 Bearish Mar 15, 2022 124521 24281 69137 -44856 -72573 4760 -28579 33339 Weak bearish Mar 08, 2022 197094 19521 97716 -78195 7427 6801 6660 141 Weak bearish Mar 01, 2022 189667 12720 91056 -78336 -2912 1167 -4577 5744 Weak bearish Feb 22, 2022 192579 11553 95633 -84080 1 -139 -2753 2614 Weak bearish         Total change -49571 22268 -14820 37088     Figure 3: The AUD and COT positions of large speculators on a weekly chart and the AUDUSD on D1   The total net positions of speculators reached 49,606 contracts last week, having grown by 1,583 contracts compared to the previous week. This change is due to the growth of long positions by 10,213 contracts and the growth of short positions by 8,630 contracts. This data suggests weak bearish sentiment for the Australian dollar as the total net positions of large speculators are negative, but they increased last week. There was an increase in open interest of 15,240 contracts last week. This means that the sideways movement that occurred last week was supported by the volume and was therefore strong as new money flowed into the market. The Australian dollar moved near a strong resistance level last week. If it is validly broken then a further bullish movement may be seen.  Long-term resistance: 0.7510-0.7560                                                                                                              Long-term support: 0.7370-0.7440.  A next support is near 0.7160 – 0.7180.   The New Zealand dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Mar 29, 2022 34881 15504 16371 -867 -375 -1652 1735 -3387 Bearish Mar 22, 2022 35256 17156 14636 2520 -3944 -4337 -3204 -1133 Weak bullish Mar 15, 2022 39200 21493 17840 3653 -14050 5718 -10314 16032 Bullish Mar 08, 2022 53250 15775 28154 -12379 2861 5290 3497 1793 Weak bearish Mar 01, 2022 50389 10485 24657 -14172 -6247 -6858 -4237 -2621 Bearish Feb 22, 2022 56636 17343 28894 -11551 -7469 -7580 -5362 -2218 Bearish Mar 29, 2022 34881 15504 16371 -867 -375 -1652 1735 -3387 Bearish         Total Change -29224 -9419 -17885 8466     Figure 4: The NZD and the position of large speculators on a weekly chart and the NZDUSD on D1   The total net positions of speculators last week amounted to - 867 contracts, having fallen by 3,387 contracts compared to the previous week. This change is due to a decrease in long positions by 1,652 contracts and an increase in short positions by 1,735 contracts. This data suggests that there was a bearish sentiment for the New Zealand dollar over the past week as the total net positions of large speculators got negative. Open interest fell by 375 contracts last week.  Therefore, the sideways move in the NZDUSD that occurred last week was not supported by a volume and therefore the move was weak. The NZDUSD strengthened strongly last week and got to the resistance level. Long-term resistance: 0.6980 – 0.7000 Long-term support: 0.6860-0.6880 and the next support is at 0.6730 – 0.6740.   Explanation to the COT report The COT report shows the positions of major participants in the futures markets. Futures contracts are derivatives and are essentially agreements between two parties to exchange an underlying asset for a predetermined price on a predetermined date. They are standardised, specifying the quality and quantity of the underlying asset. They are traded on an exchange so that the total volume of these contracts traded is known.   Open interest: open interest is the sum of all open futures contracts (i.e. the sum of short and long contracts) that exist on a given asset. OI increases when a new futures contract is created by pairing a buyer with a seller. The OI decreases when an existing futures contract expires at a given expiry time or by settlement. Low or no open interest means that there is no interest in the market. High open interest indicates high activity and traders pay attention to this market. A rising open interest indicates that there is demand for the currency. That is, a rising OI indicates a strong current trend. Conversely, a weakening open interest indicates that the current trend is not strong. Open Interest Price action Interpretation Notes Rising Rising Strong bullish market New money flow in the particular asset, more bulls entered the market which pushes the price up. The trend is strong. Rising Falling Strong bearish market Price falls, more bearish traders entered the market which pushes the price down. The trend is strong. Falling Rising Weak bullish market Price is going up but new money do not flow into the market. Existing futures contracts expire or are closed. The trend is weak. Falling Falling Weak bearish market Price is going down, but new money do not flow into the market. Existing futures expire or are closed, the trend is weak.   Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. Traders should try to trade in the direction of these large speculators. The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. The COT data are usually reported every Friday and they show the status on Tuesday of the week. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.
The Swing Overview - Week 14 2022

The Swing Overview - Week 14 2022

Purple Trading Purple Trading 11.04.2022 06:41
The Swing Overview - Week 14 Equity indices weakened last week on news of rising interest rates and a tightening of the US economy. The euro is also weakening not only because it is under pressure from the ongoing war in Ukraine and sanctions against Russia, but also from the uncertainty of the upcoming French presidential election. The outbreak of the coronavirus in China has fuelled negative sentiment in oil, where the market fears an excess of supply over demand. The US dollar was the clear winner in this environment.  The USD index strengthens along with US bond yields According to the US Fed meeting minutes released on Wednesday, the Fed is prepared to reduce its balance sheet by the USD 95 billion per month from May this year.  In addition, the Fed is ready to raise interest rates at a pace of 0.50%. Thus, at the next meeting, which will take place in May, we can expect a rate increase from the current 0.50% to 1.00%. This option is already included in asset prices.     As a result of this the yields on US 10-year bonds continued to rise and has already reached 2.64%. The US dollar in particular is benefiting from this development and is approaching the level 100. Figure 1: US 10-year bond yields and USD index on the daily chart   Equity indices under pressure from high interest rates The prospect of aggressive interest rate hikes is having a negative impact on investor sentiment, particularly for growth stocks. However, it is positive for financial sector stocks. High yields on the US bonds are attractive to investors, who will thus prefer this yield to, for example, investments in gold, which does not yield any interest. Figure 2: SP 500 on H4 and D1 chart   The US SP 500 index is currently moving in a downward correction, which is shown on the H4 chart. Prices could move in a downward channel that is formed by a lower high and a lower low. The SP 500 according to the H4 chart is below the SMA 100 moving average, which also indicates bearish tendencies.   The nearest resistance according to the H4 chart is in the range of 4,513 - 4,520. The next resistance is around 4,583 - 4,600. A support is at 4 450 - 4 455.   German DAX index A declining channel has also formed for the DAX index. The price is below the SMA 100 moving average on the H4 chart, where at the same time the SMA 100 got below the EMA 50, which is a strong bearish signal. Figure 3: German DAX index on H4 and daily chart According to the H4 chart, the nearest resistance is in the range between 14,340 - 14,370. There is also a confluence with the moving average EMA 50 here. The next resistance is at 14,590 - 14,630. A support is at 14,030 - 14,100.   The DAX is influenced by the upcoming French presidential election, the outcome of which could have a major impact on the European economy.    The euro remains in a downtrend The Euro is negatively affected by the sanctions against Russia, which will also have a negative impact on the European economy. In addition, uncertainty has arisen regarding the French presidential election. Although the victory of the far-right candidate Marine Le Pen over the defending President Emmanuel Macron is still unlikely, the polls suggest that it is within the statistical margin of error. And this makes markets nervous.   A Le Pen victory would be bad for the economy and France's overall international image. It would weaken the European Union. That's why this news sent the euro below 1.09. The first round of elections will be held on Sunday April 10 and the second round on April 24, 2022.    Figure 4: EURUSD on H4 and daily chart. The nearest resistance according to the H4 chart is at 1.0930 - 1.0950. The significant resistance according to the daily chart is 1.1160 - 1.1190.  A support is at 1.080 - 1.0850.   According to the technical analysis, the euro is in a downtrend, but as it is currently at significant support levels, any short speculation could be considered only after the current support is broken and retested to validate the break.   The crude oil continues to descend The oil prices fell for a third straight day after the Paris-based International Energy Agency (IEA) announced it would release 60 million barrels of its members' reserves to the open market, adding to an earlier reserve release of 180 million barrels announced by the United States. In total, 240 million barrels would be delivered to the market over six months, resulting in a net inflow of 1.33 million barrels a day.   That would be more than triple the monthly production additions of 400,000 barrels per day by the world's oil producers under the OPEC+ alliance led by Saudi Arabia and controlled by Russia.   Adding to the negative sentiment on oil was a coronavirus outbreak in Shanghai, the largest in two years, which forced a more than week-long closure of China's second-largest city. This raises concerns about demand among oil consumers in the Chinese economy, which has a significant impact on prices. Figure 5: Brent crude oil on the H4 and daily charts. Brent crude oil is thus approaching support, which according to the H4 chart is at around USD 97-99 per barrel. The nearest resistance according to the H4 chart is at the price of USD 106 per barrel. The more significant resistance is at USD 111-112 per barrel of the Brent crude.   
The Swing Overview - Week 13 2022

The Swing Overview - Week 13 2022

Purple Trading Purple Trading 11.04.2022 06:41
The Swing Overview - Week 13 Equity indices closed the first quarter of 2022 in a loss under the influence of geopolitical tensions. The Czech koruna strengthened as a result of the CNB raising interest rates to 5%, the highest since 2001. The US supports the oil market by releasing 180 million barrels from its strategic reserves. War in Ukraine   The war in Ukraine has been going on for more than a month and there is still no end in sight. Ongoing diplomatic negotiations have not led to a result yet. Meanwhile, Russian President Putin has decided that European countries will pay for Russian gas in rubles. This has been described as blackmailing from Europe's point of view and is not in line with the gas supply contracts that have been concluded. A way around this is to open an account with Gazprombank where the gas can be paid for in euros. Geopolitical tensions are therefore still ongoing and are having a negative effect on stock markets.   Equity indices have had their worst quarter since 2020 US and European equities posted their biggest quarterly loss since the beginning of 2020, when the COVID-19 pandemic broke out and the global economy was in crisis. Portfolio rebalancing at the end of the quarter boosted demand for bonds and kept yields lower.   On Tuesday, the yield curve briefly inverted, meaning that short-term bonds yields were higher than  long-term bonds. An inverted yield curve is a signal of a recession according to many economists. It means that future corporate profits should be rather behind expectations and stock prices might reflect it.    On Thursday, the S&P 500 index fell 1.6%. The Dow Jones industrial index also fell by 1.6% and the Nasdaq Composite index fell by 1.5%. The European STOXX 600 index closed down by 0.94%. Even after last week's rally, as investors celebrated signs of progress in peace talks between Russia and Ukraine, the S&P 500 index is still down 5% for the first three months, its worst quarterly performance in two years.  Figure 1: SP 500 on H4 and D1 chart   The SP 500 index reached the resistance level at 4,600, which it broke, but then closed below it. This indicates a false break. The new nearest resistance is in the range of 4,625 - 4,635. Support is at 4,453 and then significant support is at 4,386 - 4,422.   German DAX index The DAX index has rallied since March 8 and has reached the resistance level which is in the 14,800 - 15,000 range.  However, the index started to weaken in the second half of the week. The news that Russia will demand payments for gas in rubles, which Western countries refuse, contributed to the index's weakening. The fear of gas supply disruption then caused a sell-off.    Figure 2: German DAX index on H4 and daily chart Resistance is between 14,800 - 15,000 according to the daily chart. The nearest support according to the H4 chart is at 14,100 - 14,200.   The euro remains in a downtrend The euro was supported at the beginning of the week by hopes for peace in Ukraine. However, by the end of the week, the Ukrainian President warned that Russia was preparing for more attacks and the Euro started to weaken. News of Russia's demand to pay for gas in rubles had a negative effect on the euro as well. Figure 3: The EURUSD on the H4 and daily charts. From a technical point of view, we can see that the EURUSD according to the daily chart has reached the resistance formed by EMA 50 (yellow line). The new horizontal resistance is in the area of 1.1160 - 1.1180. Support is at 1.0950 - 1.0980. The euro still remains in a downtrend.   CNB raised the interest rate In the fight against the inflation, the CNB decided to further raise the interest rate by 0.50%. Currently, the base rate is at 5%, where it was last in 2001. The interest rate hike is aimed at slowing inflation by slowing demand through higher borrowing costs.   Figure 4: Interest rate developments in the Czech Republic In addition, a strong koruna should support the slowdown in inflation. The koruna could appreciate especially against the euro due to higher interest rates. However, the strengthening of the koruna is conditional on the war in Ukraine not escalating further.  We can see that the koruna against the euro is approaching a support around 24.30. The low of this year was 24.10 korunas for one euro. Figure 5: USD/CZK and EUR/CZK on the daily chart. The koruna is also strengthening against the US dollar. Here, however, the situation is slightly different in that the US Fed is also raising rates and is expected to continue raising rates until the end of the year. Therefore, the interest rate differential between the koruna and the dollar is less favourable than between the koruna and the euro. The appreciation of the koruna against the dollar is therefore slower.   Currently, the koruna is at the support of 22 koruna per dollar. The next support is at 21.70 and then 21.10 koruna per dollar, where this year's low is.   Oil has weakened Oil prices saw the deep losses after the news that the United States will release up to 180 million barrels from its strategic petroleum reserves as part of measures to reduce fuel prices. US crude oil fell 5.4% and Brent crude oil fell 6.6% on Thursday after the news. Figure 6: Brent crude oil on a monthly and daily chart We can see that a strong bearish pinbar was formed on a  monthly chart. The nearest support is in the zone 103 – 106 USD per barel. A strong support is around 100 USD per barel which will be closely watched.  
The French elections: effects on euro

The French elections: effects on euro

Alex Kuptsikevich Alex Kuptsikevich 11.04.2022 14:06
Politics is once again temporarily becoming the main driver for the single currency. EURUSD returned to 1.0925 on Monday, gaining 0.8% from Friday's lows on reports that incumbent Macron is ahead of far-right Le Pen and will potentially get even more votes in the second round on April 24th as the majority of those voting for alternative candidates lean towards Macron. The lowering of political risks is attracting buyers of the single currency as EURUSD fell late last week to 1.0850 - near the lows of March and a support area in the pair between February and May 2020. In 1997, the EURUSD (then still non-cash) was gaining support near this level, but a return to 1.08 two years later triggered a capitulation. The EURUSD sell-off then had only halted two years later after the single currency had lost a quarter of its value and only after ECB interventions. The French elections and the events in Ukraine have enough potential to trigger a historic euro move away from that line. A strong pullback under 1.0800 opens the direct road to 1.05 (pandemic lows), but it may only be the first step in a long term slide of the single currency towards 0.8500. The opposite is also true: the political détente in the coming weeks may fundamentally change the attitude towards the single currency, making purchases attractive in the long term from the current levels. Investors and traders should pay close attention to the EURUSD in the coming weeks because the following dynamics will be decisive for the number one currency and the entire forex market for many months.
Positions of large speculators according to the COT report as at 5/4/2022

Positions of large speculators according to the COT report as at 5/4/2022

Purple Trading Purple Trading 11.04.2022 22:12
Positions of large speculators according to the COT report as at 5/4/2022 Total net speculator positions in the USD index rose by 911 contracts last week. This change is the result of a decrease in long positions by 3,932 contracts and a decrease in short positions by 4,843 contracts. The growth in total net positions occurred last week in the euro, the Australian dollar and the Canadian dollar. There were declines in the total net positions of large speculators in the British pound, the New Zealand dollar, the Japanese yen and the Swiss franc. Interest rate decisions will be made by the central banks of New Zealand and Canada (Wednesday) and the ECB on Thursday this week. The published monetary policy of these banks will be the decisive driver for the NZD, the CAD and the EUR this week. The positions of speculators in individual currencies The total net positions of large speculators are shown in Table 1: If the value is positive then the large speculators are net long. If the value is negative, the large speculators are net short. Table 1: Total net positions of large speculators DatE USD Index EUR GBP AUD NZD JPY CAD CHF Apr 05, 2022 31852 27370 -41758 -37513 -1569 -103829 6923 -12393 Mar 29, 2022 30941 21374 -40070 -49606 -867 -102131 1535 -11579 Mar 22, 2022 29635 23843 -37244 -51189 2520 -78482 -4940 -8424 Mar 15, 2022 28380 18794 -29061 -44856 3653 -62340 17740 -5229 Mar 08, 2022 34044 58844 -12526 -78195 -12379 -55856 7646 -9710 Mar 01, 2022 34774 64939 -337 -78336 -14172 -68732 14140 -15248   Note: The explanation of COT methodolody is at the the end of the report.   Notes: Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. ​The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.   Detailed analysis of selected currencies   Explanations:   Purple line and histogram: this is information on the total net position of large speculators. This information shows the strength and sentiment of an ongoing trend. It is the indicator r_COT Large Speculators (by Kramsken) in www.tradingview.com. Information on the positions of so-called hedgers is not shown in the chart, due to the fact that their main goal is not speculation, but hedging. Therefore, this group usually takes the opposite positions than the large speculators. For this reason, the positions of hedgers are inversely correlated with the movement of the price of the underlying asset. However, this inverse correlation shows the ongoing trend less clearly than the position of large speculators.​ We show moving average SMA 100 (blue line) and EMA 50 (orange line) on daily charts. ​Charts are made with the use of www.tradingview.com. The source of numerical data is www.myfxbook.com   The Euro   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Apr 05, 2022 663589 210914 183544 27370 1174 10871 4875 5996 Bullish Mar 29, 2022 662415 200043 178669 21374 3598 -7008 -4539 2469 Weak bullish Mar 22, 2022 658817 207051 183208 23843 -7193 5011 -38 5049 Bullish Mar 15, 2022 666010 202040 183246 18794 -72980 -40643 -593 -40050 Weak bullish Mar 08, 2022 738990 242683 183839 58844 19015 14298 20393 -6095 Weak bullish Mar 01, 2022 719975 228385 163446 64939 23293 14190 8557 5633 Bullish         Total change -33093 -3281 28655 -31936     Figure 1: The euro and COT positions of large speculators on a weekly chart and the EURUSD on D1 The total net positions of large speculators reached 27 370 contracts last week and they were up by 5 996 contracts compared to the previous week. This change is due to an increase in long positions by 10,871 contracts and an increase in short positions by 4,875 contracts. These data indicates a bullish sentiment for the euro. Open interest has risen by 1,174 contracts in the last week. This shows that the downward movement that occurred in the euro last week was supported by a volume and it was therefore a strong price action. The euro keeps moving in a downtrend. Last week it again reached a strong support in the area around 1.0850. Long-term resistance: 1.0950 – 1.0980.  The next resistance is in the zone 1.1160 – 1.1180. Support: 1.080-1.0850   The British pound   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Apr 05, 2022 238266 35873 77631 -41758 13901 5249 6937 -1688 Bearish Mar 29, 2022 224365 30624 70694 -40070 28653 -2129 697 -2826 Bearish Mar 22, 2022 195712 32753 69997 -37244 7389 311 8494 -8183 Bearish Mar 15, 2022 188323 32442 61503 -29061 -57989 -18540 -2005 -16535 Bearish Mar 08, 2022 246312 50982 63508 -12526 34443 3303 15492 -12189 Bearish Mar 01, 2022 211869 47679 48016 -337 23426 5430 -42 5472 Weak bearish         Total change 49823 -6376 29573 -35949     Figure 2: The GBP and COT positions of large speculators on a weekly chart and the GBPUSD on D1   The total net positions of speculators last week reached 41,758 contracts and thez were down by 1,688 contracts compared to the previous week. This change is due to the growth in long positions by 5,249 contracts and the growth in short positions by 6,937 contracts. This suggests bearish sentiment as the total net positions of large speculators are negative while there has been their further decline. Open interest rose by 13,901 contracts last week. This means that the downward movement in the pound that occurred last week was supported by a volume and it is therefore strong. Long-term resistance: 1.3050 – 1.3070. The next resistance is in the zone 1.3270 – 1.3300. Support is near 1.3000. The next support is near 1.2900   The Australian dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Apr 05, 2022 148898 34871 72384 -37513 5891 911 -11182 12093 Weak bearish Mar 29, 2022 143007 33960 83566 -49606 15240 10213 8630 1583 Weak bearish Mar 22, 2022 127767 23747 74936 -51189 3246 -534 5799 -6333 Bearish Mar 15, 2022 124521 24281 69137 -44856 -72573 4760 -28579 33339 Weak bearish Mar 08, 2022 197094 19521 97716 -78195 7427 6801 6660 141 Weak bearish Mar 01, 2022 189667 12720 91056 -78336 -2912 1167 -4577 5744 Weak bearish         Total change -43681 23318 -23249 46567     Figure 3: The AUD and COT positions of large speculators on a weekly chart and the AUDUSD on D1   The total net positions of speculators last week reached - 37,513 contracts, growing by 12,093 contracts compared to the previous week. This change is due to the growth in long positions by 911 contracts and a decrease in short positions by 11,182 contracts. This data suggests weak bearish sentiment for the Australian dollar as the total net positions of large speculators are negative, but there was an increase in the previous week. There was an increase in open interest of 5,891 contracts last week. This means that the downward movement that occurred last week was supported by a volume and it was therefore a strong price action as new money flowed into the market. The Australian dollar formed a strong bearish pin bar last week. This could indicate further weakening of the AUD/USD pair. However, the pair is in a support area, so to speculate in the short direction it is necessary to wait for the pair to break this support and for a valid retest of the break. Long-term resistance: 0.7580-0.7660                                                                                                              Long-term support: 0.7370-0.7440.  A next support is near 0.7160 – 0.7180.   The New Zealand dollar   date Open Interest Specs Long Specs Short Specs Net positions change Open Interest change Long change Short change Net Positions Sentiment Apr 05, 2022 35788 15428 16997 -1569 907 -76 626 -702 Bearish Mar 29, 2022 34881 15504 16371 -867 -375 -1652 1735 -3387 Bearish Mar 22, 2022 35256 17156 14636 2520 -3944 -4337 -3204 -1133 Weak bullish Mar 15, 2022 39200 21493 17840 3653 -14050 5718 -10314 16032 Bullish Mar 08, 2022 53250 15775 28154 -12379 2861 5290 3497 1793 Weak bearish Mar 01, 2022 50389 10485 24657 -14172 -6247 -6858 -4237 -2621 Bearish         Total change -20848 -1915 -11897 9982     Figure 4: The NZD and the position of large speculators on a weekly chart and the NZDUSD on D1   The total net positions of speculators last week reached to - 1 569 contracts, falling by 702 contracts compared to the previous week. This change is due to a decrease in long positions by 76 contracts and an increase in short positions by 626 contracts. This data suggests that bearish sentiment has set in in the New Zealand dollar over the past week, as the total net positions of large speculators are negative and they continue to fall Open interest rose by 907 contracts last week.  It means that the downward movement in NZDUSD that occurred last week was supported by a volume and therefore this price action was strong. Long-term resistance: 0.6860 – 0.6880. The next resistance is near 0.6980 – 0.7030 Long-term support: 0.6730 – 0.6740.   Explanation to the COT report The COT report shows the positions of major participants in the futures markets. Futures contracts are derivatives and are essentially agreements between two parties to exchange an underlying asset for a predetermined price on a predetermined date. They are standardised, specifying the quality and quantity of the underlying asset. They are traded on an exchange so that the total volume of these contracts traded is known.   Open interest: open interest is the sum of all open futures contracts (i.e. the sum of short and long contracts) that exist on a given asset. OI increases when a new futures contract is created by pairing a buyer with a seller. The OI decreases when an existing futures contract expires at a given expiry time or by settlement. Low or no open interest means that there is no interest in the market. High open interest indicates high activity and traders pay attention to this market. A rising open interest indicates that there is demand for the currency. That is, a rising OI indicates a strong current trend. Conversely, a weakening open interest indicates that the current trend is not strong. Open Interest Price action Interpretation Notes Rising Rising Strong bullish market New money flow in the particular asset, more bulls entered the market which pushes the price up. The trend is strong. Rising Falling Strong bearish market Price falls, more bearish traders entered the market which pushes the price down. The trend is strong. Falling Rising Weak bullish market Price is going up but new money do not flow into the market. Existing futures contracts expire or are closed. The trend is weak. Falling Falling Weak bearish market Price is going down, but new money do not flow into the market. Existing futures expire or are closed, the trend is weak.   Large speculators are traders who trade large volumes of futures contracts, which, if the set limits are met, must be reported to the Commodity Futures Trading Commission. Typically, this includes traders such as funds or large banks. These traders mostly focus on trading long-term trends and their goal is to make money on speculation with the instrument. Traders should try to trade in the direction of these large speculators. The total net positions of large speculators are the difference between the number of long contracts and the number of short contracts of large speculators. Positive value shows that large speculators are net long. Negative value shows that large speculators are net short. The data is published every Friday and is delayed because it shows the status on Tuesday of the week. The total net positions of large speculators show the sentiment this group has in the market. A positive value of the total net positions of speculators indicates bullish sentiment, a negative value of total net positions indicates bearish sentiment. When interpreting charts and values, it is important to follow the overall trend of total net positions. The turning points are also very important, i.e. the moments when the total net positions go from a positive value to a negative one and vice versa. Important are also extreme values ​​of total net positions as they often serve as signals of a trend reversal. The COT data are usually reported every Friday and they show the status on Tuesday of the week. Sentiment according to the reported positions of large players in futures markets is not immediately reflected in the movement of currency pairs. Therefore, information on sentiment is more likely to be used by traders who take longer trades and are willing to hold their positions for several weeks or even months.
Chart of the Week - Gold Miners vs Energy Producers - 20.04.2022

NAS100, SPX, EuroStoxx 50, Gold (XAUUSD), US Treasuries And More - "Financial Markets Today: Quick Take" – April 13, 2022

Saxo Strategy Team Saxo Strategy Team 13.04.2022 11:07
Macro 2022-04-13 08:25 6 minutes to read Summary:  Markets are waking up about where they left off yesterday, as a US equity market rally in the wake of slightly softer than expected core US inflation in March was reversed back to its starting point. Overnight, the New Zealand central bank hiked more than expected, but guided less hawkish, so NZD fell. The Bank of Canada is expected to beat the Fed to the punch today by hiking by 50 basis points for the first time since 2000.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - US equities tried to shift back to a positive stance yesterday in the wake of a slightly softer core CPI reading for March, but the rally was erased by the close, as attention is set to shift to earnings season which kicks off today in earnest. The Nasdaq 100 index has yet to break down through the 61.8% Fibonacci retracement level at 13,831, a break of which could usher in a full test of the 12,942.5 low. The less yield-sensitive S&P 500 index is farther above its respective 61.8% retracement level (4,299) but posted a weak session to new local lows yesterday, even as sentiment has recovered again overnight. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) were little changed.  Energy and mining stocks outperformed.  China’s Ministry of Transport has issued a notice to local governments to urge the latter to keep highways in operation in areas affected by lockdowns.  China is also piloting in eight cities to reduce the number of days required for quarantine from 14 days to 10 days.  China reported better than expected March export data (+14.7% YoY in USD terms) while imports declined (-0.1% YoY in USD terms). Trade surplus increased to USD47.4 billion (vs consensus $21.7bln, Feb $30.6bln). Stoxx 50 (EU50.I) – the Stoxx 50 index snapped back from new local lows yesterday –emphasizing the importance of the 3,800 area support – and is fairly sideways overnight in the futures, a somewhat better performance than the major US averages, where a rally attempt yesterday was fully wiped out.  A weak euro certainly helps exporters, but energy/power prices continue to weigh on Europe’s economic outlook. EURUSD and EUR pairs  – the euro continues to trade heavily and EURUDS has nearly touched the lows for the cycle around near 1.0800. It was rather disappointing for bulls that the pair failed to get more support from a consolidation lower in US yields yesterday in the wake of the slightly cooler than expected core inflation reading (more below). The ongoing unease as Russia looks set to widen its offensive in eastern Ukraine and concerns that the ECB will remain dovish tomorrow perhaps weighing. The next major level lower is the 1.0636 level posted during the pandemic outbreak panic. USDCAD is at pivotal levels in the 1.2650 area, ... ...about the half-way point of the recent  price range and near the 200-day moving average ahead of today’s Bank of Canada meeting, which is expected to bring a 50-basis point rate hike (to take the policy rate to 1.00%), which would be the first rate hike of more than 25 bps since 2000. But with the Fed seen likely matching the Bank of Canada’s pace of tightening by year-end, the BoC may need to guide hawkish, or CAD may need to find more support from rising oil prices and improving risk sentiment broadly if it is to stage a rally against the US dollar. The technical situation certainly looks pivotal. Gold (XAUUSD) The advance in gold prices was a bit more impressive yesterday as the move higher above the key 1,966 area stuck, though the real challenge remains a bid to retake the psychologically important 2,000 level. The dip in treasury yields yesterday and weak risk sentiment in equities provided some of the boost. Crude oil (OILUKJUN22 & OILUSMAY22)  A solid comeback for oil prices yesterday, as WTI crude joined Brent in trading back above 100/bbl ahead of weekly US crude oil and product inventories from the DoE today. China moving to ease some of the Shanghai covid lockdowns may have boosted sentiment on the demand side. And longer-term supply concerns are in clear evidence as long-dated crude for December of 2023, trades within two dollars of the highest daily close for the cycle back in early March. US Treasuries (IEF, TLT) and European Sovereign Debt. Treasury traders took the slightest easing of the pace of core March US inflation as a signal for consolidation yesterday, as yields dropped all along the curve, and more so at the front end as the market perhaps figures that as long as the pace of inflation rises moderates, it can stop the constant upward adjustments to the perceived path of Fed policy tightening this year. A US 10-year treasury auction saw tepid demand yesterday. Today sees a 30-year T-bond auction. EU yields also eased lower yesterday from new cycle- and multi-year highs. What is going on? New Zealand’s RBNZ surprises with 50-basis point hike, but guides less hawkish.  The market was looking for a 25-basis point move to take the Official Cash Rate to 1.25%, but instead got 50 basis points and a 1.50% policy rate. The argument in the statement was that the bank saw it prudent to bring hiking forward to reduce the risks of rising inflation expectations. At the same time, the statement frets the slowing pace of global economic activity. After an initial spike higher on the impact of the larger than expected hike, the NZD traded lower in the wake of the decision as the 2-year NZ rate dropped some 15 basis points. AUDNZD also retains an upward bias given the demand in resource-rich Australian assets. Australia’s business data also continues to hold up for now, while New Zealand is facing deteriorating business sentiment and chronic labor shortage. UK Mar. CPI out this morning – hotter than expected.  UK March CPI hit +1.1% MoM and +7.0% YoY on the headline (vs. +0.8% /+6.7% expected) and +5.7% YoY (vs. +5.3% expected) for the core CPI reading Crowdstrike (CRWD) rose 3.2% on a Goldman Sach upgrade to buy. Crowdstrikeis the world’s biggest cybersecurity company. The analyst community also likes Crowdstrike  with 93% of analysts rating the stock as a buy. Goldman Sachs expects Crowdstrike’s shares to rise to $285 in a year. USDJPY refuses to drop below 125.  USDJPY dropped below 125 following the US CPI release overnight, focusing on the less-than-expected core print and the fall in US treasury yields. This morning, the pair is trading close to the near-20 year high of 125.86. The move was however reversed suggesting sustained weakness in the yen, which will continue until we see stronger action from the Japanese authorities and not just verbal intervention. The prospect of stagflation remains for Germany.  This is the main takeaway from the ZEW index released yesterday. The economic sentiment index decreased to minus 41.0 in April versus prior minus 39.3 while the current conditions index dropped to minus 30.8 versus prior minus 21.4. The ZEW experts are therefore pessimistic about the current economic situation, and they expect that it will continue to deteriorate. The only glimpse of hope is the decline in inflation expectations.  U.S. Inflation is still uncomfortably high.  March CPI hit 8.5 % year-over-year. This is the hottest annual pace since 1981. The pace of Core CPI rises moderated a bit at +0.3% month-on-month and + 6.5% year-on-year. This is still the hottest pace since 1982. On a year-on-year basis, the sharpest increases are : fuel oil (70 %), gas (48 %), used cars (35 %), hotels (29 %), airfare (24 %) and utility gas (22 %). You can find the full list here (scroll to pdf page 9). It is clear that the U.S. Federal Reserve is behind the curve. Expect a 50-basis point interest rate hike at the May FOMC meeting. What are we watching next? Ukraine war developments as new Russian offensive operations are underway in eastern Ukraine and US President Biden promised a new round of $750 million in military aid and said Russian leader Putin is guilty of genocide. Earnings Watch. The Q1 earnings season kicks off in earnest today week with US mega-bank JP Morgan Chase reporting today, but the more Main Street-oriented banks reporting in coming days, including the largest of these, Wells Fargo, tomorrow, will be interesting for a check-up on credit demand. The UK’s largest grocer Tesco is also worth watching for a sense of the impact of inflation on margins and customer behaviour as a cost-of-living crisis has hit a large portion of the UK population. Today: Tesco, JPMorgan Chase & Co, BlackRock, Fastenal Thursday: China Northern Rare Earth Group, Fast Retailing, Ericsson, UnitedHealth, Wells Fargo, Morgan Stanley, Goldman Sachs, Citigroup, US Bancorp, PNC Financial Services, Coinbase, State Street Friday: Hangzhou Hikvision Digital Economic calendar highlights for today (times GMT) 1230 – US Mar. PPI 1400 – Canada Bank of Canada Rate Decision 1430 – US DoE Weekly Crude Oil and Product Inventories 1500 – Canada Bank of Canada’s Macklem press conference 1700 – US 30-year T-bond auction 2301 – UK Mar. RICS House Price Balance 0130 – Australia Mar. Employment Change / Unemployment Rate   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:    
Will Fuel Prices Shock Again? Crude Oil Price Almost Hit $120! Will EV Become More Popular Shortly?

(EUR) Euro Power!? (EURUSD) Euro To US Dollar Still Trades Really Low! Does AUDUSD Impose US Dollar Weakening? Shocking USD/NOK Rollercoaster

Jing Ren Jing Ren 15.04.2022 09:03
EURUSD breaks key support The euro fell after the ECB insisted that there is no rush to raise interest rates. The price has given up all gains from the March rebound. Even though a bullish RSI divergence shows a slowdown in the sell-off momentum, a break below 1.0810 put the single currency further on the defensive. A deeper correction would push the pair to 1.0700. 1.0920 is a fresh resistance and those who bought the dip may seek to bail out. Analysts expect more offers around the support-turned-resistance at 1.1000. AUDUSD seeks support The Australian dollar recovers as inflation expectations rise amid a tight labor market. The pair is seeking support after it broke above last October’s high at 0.7550. The pullback came across buying interest near 0.7400 which sits on the 30-day moving average. A bounce above 0.7490 would shave off some selling pressure and the bulls need to reclaim 0.7550 before the uptrend could resume. On the downside, a bearish breakout would force the latest buyers to bail out and trigger a sell-off towards 0.7300. USDNOK consolidates in channel The US dollar rallied as March retail sales came out in line with expectations. A previous break above 8.7900 prompted sellers to cover, easing the pressure on the greenback. The pair is in a rising channel and a series of higher lows indicates improved sentiment. 8.7000 is the current support as traders buy the dips. 8.8000 on the upper side would be the next target in the short term. Its breach could extend the recovery to the psychological level of 9.0000. A bearish breakout would send the pair to the daily support at 8.5600.
Chart of the Week - Gold Miners vs Energy Producers - 20.04.2022

You Should Follow These Events And Assets! Saxo Bank's QuickTake: NAS100, S&P 500, Stoxx 50, EURUSD, USDJPY, XAUUSD, Crude Oil, Russia-Ukraine War - And More

Saxo Bank Saxo Bank 19.04.2022 10:16
Macro 2022-04-19 08:34 6 minutes to read Summary:  Markets are trying to maintain an even keel as bond yields and oil prices continue to press higher. Europe returns from its long holiday weekend today as the war in Ukraine is heating up in the east and the hawkish Fed voter Bullard says he would not rule out a 75-basis-point hike at the May 4 FOMC meeting. Gold failed a bid to take the 2,000 dollar per ounce threshold yesterday.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  - US equities have been weak over the past week with negative reactions to earnings from US financials with JPMorgan Chase’s unexpected increase in credit provisions indicating credit conditions will worsen. This week major earnings releases in the US will dominate the reaction function and set the direction for the S&P 500 futures which are trading around the 4,400 level this morning with yesterday’s low at 4,355 being the key level to watch on the downside. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun   Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I)  Hang Seng Index retreated more than 2% after investors found the 25 bp reserve requirement ratio cut by the People’s Bank of China last Friday disappointing as they had been expecting a more typical 50 bp reduction and a 10 bp cut in the policy Medium-term Lending Facility (MLF) rate as well.  E-commerce names declined on report that the Chinse authority had asked e-commerce companies to a meeting and called on the latter to improve on practices on pricing and delivery of necessities to consumers during lockdowns. Alibaba and Meituan fell 3% to 5%. China Merchant Bank fell 11% following the abrupt departure of the Chinese bank’s president. CSI300 saw a modest decline with coal miners, agricultural chemicals and fertilizer producers, and energy sector seeing demand. Stoxx 50 (EU50.I)  – Stoxx 50 futures are stuck in the mud ahead of a critical week with US Q1 earnings releases and Russia’s new offensive in Donbass marking the beginning of the next and more critical phase of the war in Ukraine. Stoxx 50 futures are trading around the 3,750 level this morning and is boxed into a tight trading range from 3,710 to 3,800. EURUSD  – the euro traded and closed below the prior cycle low of 1.0800 after an initial sell-off through that level in the wake of last week’s ECB meeting failed to stick. Yield spreads at the short end of the curve, relative to the US, have generally trended sideways for nearly a month, although longer yields have risen more aggressively in the US since late March. USD liquidity concerns as risk sentiment is poor and the market fears more aggressive Fed quantitative tightening may be the key driver here. Watching the next chart level at 1.0636, the low from early 2020. USDJPY and JPY crosses.  The JPY continues to run away to the downside, with USDJPY hitting 128.00 for the first time since 2002, as long US treasury yields notched a new cycle peak yesterday and will soon threaten the 3.00% level if they continue to rise, underlining the policy divergence with the Bank of Japan, that continues to stick with its yield-curve-control policy that caps 10-year JGB yields at 0.25%. Both the Bank of Japan and the Japanese Ministry of Finance have stepped up their verbal interventions against JPY volatility as recently as overnight, but until a policy shift is spotted, or real intervention is mobilized, the market is content to continue driving the JPY lower. The next major chart point is the early 2002 high near at 135.00. AUDJPY has also surged to fresh record highs of 94.50+ as the AUD was slightly firmer following the hawkish tilt in RBA minutes. Suzuki is heading for a bilateral meeting with the US and comments would be on watch. For you: Forex Rates: British Pound (GBP) Strengthening? Weak (EUR) Euro? GBP, NZD And AUD Supported By Monetary Policy? Gold (XAUUSD) attempted but failed to reach $2000, more a psychological than technical resistance level during Monday’s low liquidity session. Leveraged funds (futures) and asset managers (ETFs) both bought gold in the week to April 12, a sign the technical and fundamental outlook have – for now - aligned in support of the yellow metal. The World Bank cut its forecast for global economic growth while Fed’s Bullard talked up the prospect for a 75 basis point rate hikes given the need to raise rates to around 3.5% this year. While higher interest rates may weigh, worries about inflation, growth, and increased market volatility together with the geo-political uncertainties have maintain the upper hand. Support at $1965. Crude oil (OILUKJUN22 & OILUSMAY22) has extended its pre-Easter rally after Libya shuts its largest oil field amid protest, thereby draining an already undersupplied market further. Chinese fuel demand, currently estimated to be down 2 million barrels per day is likely to recover swiftly once lockdowns are lifted after China vowed to repair the economic damage. More than 500,000 barrels per day is currently offline in Libya and together with the EU attempts to phase out Russian oil imports, the market is expected to remain tight despite the announced release from strategic reserves held by the US and IEA members. Brent finding some resistance around $113.75 with a break potentially signaling a fresh push towards $120 per barrel. Copper (COPPERUSJUL22) reached its second highest ever close on Monday, as global mining disruptions continued to weigh on a market where exchange-monitored inventories are already at alarmingly low levels. Around 20% of Peru’s exports are out of action following local community protests. In addition, a Chinese government pledge to support the economy once lockdowns are lifted, and the increased urgency to reduced dependency on fossil fuels via electrification are likely to underpin the price further. Resistance at $4.86, a local high, and support at $4.65, the 50-day moving average. US Treasuries (IEF, TLT) and European Sovereign Debt. Despite the fresh hawkish talk from St. Louis Fed president Bullard, who is a voter at FOMC meetings this year, the short end of the US yield curve remains relatively steady, while long yields have continued to test higher as the US yield curve steepens. The next major obvious test for the long end is the 2018 high for the 10-year Treasury benchmark at 3.25% What is going on? World Bank downgrades global growth estimates. The World Bank cut its 2022 outlook to 3.2% from 4.1%, dragged down by Europe and Central Asia amid the Russian invasion of Ukraine. World Bank Chief Economist Carmen Reinhart said there is “exceptional uncertainty” in global markets and further downgrades cannot be ruled out. Get ready for more hawkish Fed talk this week. We had James Bullard on the wires yesterday, and he planted the seeds of a 75-basis points rate hike given that the Fed needs to get to neutral rate very soon. The base case for the May meeting is still a 50-basis points rate hike, and a final word on that should be watched from Fed Chair Powell on Thursday as he speaks at the IMF conference. Still, brace for more volatility in yields and further gains in the US dollar as Fed continues to raise the bar of its hawkishness. The Bloomberg Grains Subindex (AIGG:xlon) has returned to challenge to the March record high with the near month corn contract (CORNJUL22) exceeding $8 per bushel for the first time in almost a decade while wheat (WHEATJUL22) has also resumed its recent strong rally. Catalysts being the war in Ukraine, potentially reducing this year's corn crop by 40%, as well as drought and heat damage to crops in the US Midwest. In addition, the recent strong surge in US natural gas prices has further lifted the cost of fertilizer, thereby potentially seeing US farmers switch more acreage to less nutrient intensive soybeans from wheat and corn. What are we watching next? JPY intervention?  The verbal intervention from the Bank of Japan and the Japanese Ministry of Finance have failed to impress the market. At some point the Japan’s MoF may feel it is necessary to mobilize an actual intervention in the market, something it has a long history of doing, though in the past, ironically in the direction of avoiding further JPY strength, not weakness. These interventions may not achieve more than temporary success if the underlying policy and market dynamic don’t shift (I.e., the Bank of Japan sticking to its current policy while inflationary pressures and yields elsewhere continue higher). But the risk of tremendous two-way, intraday volatility should be appreciated. War in Ukraine developments as Ukrainian president Zelenskiy said that Russia is initiating an effort to take the Donbas region in Easter Ukraine. An isolated force of Ukrainian forces in Mariupol continues to hold out against Russian efforts to take the city. Earnings Watch.  The Q1 earnings season started last week with EPS beating in all cases but Schwab indicated that earnings momentum is intact among US financials. JPMorgan Chase’s earnings release showed higher than expected credit provisions which may be early signs that the credit cycle is moving into its next phase. This week the key focus is on Johnson & Johnson (today), Netflix (today), Lockheed Martin (today), Halliburton (today), ASML (Wed), Sandvik (Wed), Tesla (Wed), Procter & Gamble (Wed), CATL (Thu), Nidec (Thu), ABB (Thu), NextEra Energy (Thu), Snap (Thu). Tuesday: Shenzhen Mindray Bio-Medical, Johnson & Johnson, Netflix, Lockheed Martin, IBM, Halliburton,  Wednesday: China Mobile, China Telecom, ASML, Heineken, ASM International, Sandvik, Tesla, Procter & Gamble, Abbott Laboratories, Anthem, CSX, Lam Research, Kinder Morgan, Baker Hughes Thursday: Contemporary Amperex Technology (CATL), Sartorius Stedim Biotech, Nidec, Investor AB, ABB, Danaher, NextEra Energy, Philip Morris, Union Pacific, AT&T, Blackstone, Intuitive Surgical, Freeport-McMoRan, Snap, Dow, Nucor Economic calendar highlights for today (times GMT) 0800 – Switzerland SNB Weekly Sight Deposits 1215 – Canada Mar. Housing Starts 1230 – US Mar. Housing Starts and Building Permits 1605 – US Fed’s Evans (non-Voter) to speak 1630 – Switzerland SNB’s Jordan to speak 2350 – Japan Mar. Trade Balance 0115 – China Rate Decision Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:    
The Swing Overview - Week 16 2022

The Swing Overview - Week 16 2022

Purple Trading Purple Trading 22.04.2022 15:00
The Swing Overview - Week 16 Jerome Powell confirmed that the Fed will be aggressive in fighting the inflation and confirmed tighter interest rate hikes starting in May. Equity indices fell strongly after this news. Inflation in the euro area reached a record high of 7.4% in March. Despite this news, the euro continued to weaken. The sell-off also continued in the Japanese yen, which is the weakest against the US dollar in last 20 years.  The USD index strengthens along with US bond yields Fed chief Jerome Powell said on Thursday that the Fed could raise interest rates by 0.50% in May. The Fed could continue its aggressive pace of rate hikes in the coming months of this year. US 10-year bond yields have responded to this news by strengthening further and have already reached 2.94%. The US dollar has also benefited from this development and has already surpassed the value 100 and continues to move in an uptrend. Figure 1: US 10-year bond yields and USD index on the daily chart Earnings season is underway in equities Rising interest rates continue to weigh on equity indices, which gave back gains from the first half of the last week and weakened significantly on Thursday following the Fed’s information on the aggressive pace of interest rate hikes.   In addition, the earnings season, which is in full swing, is weighing on index movements. For example, Netflix and Tesla reported results last week.   While Netflix unpleasantly surprised by reducing the number of subscribers by 200,000 in 1Q 2022 and the company's shares fell by 35% in the wake of the news, Tesla, on the other hand, exceeded analysts' expectations and the stock gained more than 10% after the results were announced. Tesla has thus shown that it has been able to cope with the supply chain problems and higher subcontracting prices that are plaguing the entire automotive sector much better than its competitors.   The decline in Netflix subscribers can be explained by people starting to save more in an environment of rising prices. Figure 2: The SP 500 on H4 and D1 chart The SP 500 index continues to undergo a downward correction, which is shown on the H4 chart. The price has reached the resistance level at 4,514-4,520. The price continues to move below the SMA 100 moving average (blue line) on the daily chart which indicates bearish sentiment.  The nearest resistance according to the H4 chart is at 4,514 - 4,520. The next resistance is around 4,583 - 4,600. The support is at 4,360 - 4,365.   The German DAX index The DAX is also undergoing a correction and the last candlestick on the daily chart is a bearish pin bar which suggests that the index could fall further. Figure 3: The German DAX index on H4 and daily chart This index is also below the SMA 100 on the daily chart, confirming the bearish sentiment. The price has reached a support according to the H4 chart, which is at 14,340 - 14,370. However, this is very likely to be overcome quickly. The next support is 13 910 - 14 000. The nearest resistance is 14 592 - 14 632.   The DAX is affected by the French presidential election that is going to happen on Sunday April 24, 2022. According to the latest polls, Macron is leading over Le Pen and if the election turns out like this, it should not have a significant impact on the markets. However, if Marine Le Pen wins in a surprise victory, it can be very negative news for the French economy and would weigh on the DAX index as well.   The euro remains in a downtrend The Fed's hawkish policy and the ECB's dovish rhetoric at its meeting on Thursday April 14, 2022, which showed that the ECB is not planning to raise rates in the short term, put further pressure on the European currency. The French presidential election and, of course, the ongoing war in Ukraine are also causing uncertainty.  Figure 4: The EURUSD on the H4 and daily charts. The inflation data was reported last week, which came in at 7.4% on year-on-year basis. The previous month inflation was 5.9%. This rise in inflation caused the euro to strengthen briefly to the resistance level at 1.0930 - 1.0950. However, there was then a rapid decline from this level following the Fed's reports of a quick tightening in the economy. A support is at 1.0760 - 1.0780.   The sell-off in the Japanese yen is not over The Japanese yen is also under pressure. The US dollar has already reached 20-year highs against the Japanese yen (USD/JPY) and it looks like the yen's weakening against the US dollar could continue. This is because the Bank of Japan has the most accommodative monetary policy of any major central bank and continues to support the economy while the Fed will aggressively tighten the economy. Thus, this fundamental suggests that a reversal in the USD/JPY pair should not happen anytime soon. Figure 5: The USDJPY on the monthly chart In terms of technical analysis, the USD/JPY price broke through the strong resistance band around the price of 126.00 seen on the monthly chart. The currency pair thus has room to grow further up to the resistance, which is in the area near 135 yens per dollar.  
Global equities staged a notable rally | Saxo Bank

A Rocketship! Greenback Has Become A TGV! US Dollar (USD) - How High DXY Can Jump?

Alex Kuptsikevich Alex Kuptsikevich 25.04.2022 14:05
The dollar continues to push back against competitors in global markets, going on the offensive against a broader front of currencies and stock indices. Geopolitics is ceding to monetary policy its role as the primary driver. And that could be bad news for risk-sensitive assets, as there is still no light at the end of this tunnel. The dollar's main competitors, the euro and the yen, seem to have exhausted their downside potential, and now the volatility threatens the next, broader range of currencies. Read next (by FXPro): (BTC) Bitcoin Priceslips To The Lows Of The Year. Crypto Regulations: Confusing Discussion In The US And The EU. Ether (ETH) And Monero (XMR) Highlighted | FXMAG.COM The yen has stabilised at 20-year lows at 128 after a 12% slump since the start of March and a 25% drawdown since the 2021 start. EURUSD was one step away from 1.0700 at the start of the European session, having lost 4.4% since March and 13% from its peak in January 2021. The movement is not too sweeping but steadily lowers the euro traded back in 2003. Read next (by FXPro): Want To Exchange 100 GBP To USD? GBP/USD Below 1.3000! (GBP) British Pound Weakens! GBP To USD - 17-Months-Low! | FXMAG.COM However, we are now seeing a marked reduction in the yen and the euro amplitude, while in contrast, it is rising in other market sectors. The British pound is flying into the abyss for a second day, losing 0.77% on Monday after falling 1.6% on Friday. GBPUSD has capitulated, pulling back to 1.2740, where it last was in September 2020. GBPUSD has moved into the lower half of the trading range this week from after the pandemic hit. The tactical target for the bears, in this case, could be the 1.2600 area, with the final point being 1.2000, where the GBPUSD has repeatedly found support over the past six years. The Australian dollar has lost about 4% since Thursday. The decline for the fourth consecutive week took about 6% off its peak at the start of April, maybe just half of the potential decline towards 0.6700, a critical turning point in the last 24 years.
FX: GBP/USD: plan for the US session on June 27 (analysis of morning deals). The sellers of the pound are back in business.

Oh No! EUR/USD Hit 5-Year-Low! Probably Euro Is Not That Week, But US Dollar... Oh My It's A Monster!

Conotoxia Comments Conotoxia Comments 27.04.2022 15:36
The common currency does not seem to have a very successful time behind it. Only since the beginning of the year to the US dollar, the euro could lose almost 7%, and today we can observe the lowest EUR/USD exchange rate since 2017. Russia has stopped the flow of gas to Poland and Bulgaria and said it will remain cut off until those countries agree to pay in rubles The euro weakened to $1.065 and could be at its lowest level since April 2017. It seems that the Euro may be weakened by growth concerns and risks related to energy supplies from Russia. Russia has stopped the flow of gas to Poland and Bulgaria and said it will remain cut off until those countries agree to pay in rubles. Read next: Who's Gonna Stop Dollar (USD)!? EUR/USD Plunging Below 1.00? What A Surprise! Crude Oil Price Goes Down!| FXMAG.COM The latest data also showed that consumer sentiment in Europe's largest economy fell to a record low (the GfK consumer climate index in Germany fell to -26.5 by the end of April). Risk sentiment remains shaken by the war in Ukraine, rising inflation and policy tightening by central banks, which could translate into slowing global growth. French President Macron was re-elected with over 58% of the vote Money markets expect the Fed to raise interest rates by half a point at its next two meetings and the European Central Bank to raise rates by 25 basis points in July in an effort to tame inflation, which is currently hitting record levels in Europe and 40-year highs in the U.S. Meanwhile, incumbent French President Macron was re-elected with over 58% of the vote. His rival Marine Le Pen received over 41% of the vote, the highest share of the far-right in an election to date, which could also be a bit of a risk going forward for Europe. Read next: US Yields Have Declined! Gold Price (XAUUSD) Is Back In The Game! Gold Trades Near $1900, COVID In China Leave Investors Unsure| FXMAG.COM A weakening Eurozone currency could have the effect of importing inflation Later in the day, the market may still be waiting for Christine Lagarde's speech from the European Central Bank, which could also have a potential impact on the Euro. A weakening Eurozone currency could have the effect of importing inflation, which could make it harder to fight rising prices, so the market may be wondering to what level the EUR can still lose before the ECB intervenes. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The Swing Overview – Week 17 2022

The Swing Overview – Week 17 2022

Purple Trading Purple Trading 03.05.2022 11:04
The Swing Overview – Week 17 Major stock indices continued in their correction and tested strong support levels. In contrast, the US dollar strengthened strongly and is at its highest level since January 2017. The strengthening of the dollar had a negative impact on the value of the euro and commodities such as gold, which fell below the $1,900 per ounce. The Bank of Japan kept interest rates low and the yen broke the magic level 130 per dollar. The USD index strengthened again but the US GDP declined The US consumer confidence in the month of April came in at 107.3, a slight decline from the previous month when consumer confidence was 107.6.   The US GDP data was surprising. The US economy decreased by 1.4% in 1Q 2022 (in the previous quarter the economy grew by 6.4%). This sharp decline surprised even analysts who expected the economy to grow by 1.1%. This result is influenced by the Omicron, which caused the economy to shut down for a longer period than expected earlier this year.    The Fed meeting scheduled for the next week on May 4 will be hot. In fact, even the most dovish Fed officials are already leaning towards a 0.5% rate hike. At the end of the year, we can expect a rate around 2.5%.   The US 10-year bond yields continue to strengthen on the back of these expectations. The US dollar is also strengthening and is already at its highest level since January 2017, surpassing 103 level.  Figure 1: US 10-year bond yields and the USD index on the daily chart   Earnings season is underway in equities Earnings season is in full swing. Amazon's results were disappointing. While revenue was up 7% reaching $116.4 billion in the first quarter (revenue was $108.5 billion in the same period last year), the company posted an total loss of $8.1 billion, which translated to a loss of $7.56 per share. This loss, however, is not due to operating activities, but it is the result of the revaluation of the equity investment in Rivian Automotive.   Facebook, on the other hand, surprised in a positive way posting unexpectedly strong user growth, a sign that its Instagram app is capable of competing with Tik Tok. However, the revenue growth of 6.6% was the lowest in the company's history.    Apple was also a positive surprise, reporting earnings per share of $1.52 (analysts' forecast was $1.43) and revenue growth of $97.3 billion, up 8.6% from the same period last year. However, the company warned that the closed operations in Russia, the lockdown in China due to the coronavirus and supply disruptions will negatively impact earnings in the next quarter.   Figure 2: The SP 500 on H4 and D1 chart In terms of technical analysis, the US SP 500 index is in a downtrend and has reached a major support level on the daily chart last week, which is at 4,150. It has bounced upwards from this support to the resistance according to the 4 H chart which is 4,308 - 4,313. The next resistance according to the H4 chart is 4,360 - 4,365.  The strong resistance is at 4,500.   German DAX index German businessmen are optimistic about the development of the German economy in the next 6 months, as indicated by the Ifo Business Climate Index, which reached 91.8 for April (the expectation was 89.1). However, this did not have a significant effect on the movement of the index and it continued in its downward correction. Figure 3: German DAX index on H4 and daily chart The index is below the SMA 100 on both the daily chart and the H4 chart, confirming the bearish sentiment. The nearest support according to the H4 is 13,600 - 13,650. The resistance is 14,180 - 14,200. The next resistance is 14,592 - 14,632.   The euro has fallen below 1.05 The euro lost significantly last week. While the French election brought relief to the markets as Emmanuel Macron defended the presidency, geopolitical tensions in Ukraine continue to weigh heavily on the European currency. The strong dollar is also having an impact on the EUR/USD pair, pushing the pair down. The price has fallen below 1.05, the lowest level since January 2017.    Figure 4: EURUSD on H4 and daily chart The euro broke through the important support at 1.0650 - 1.071, which has now become the new resistance. The new support was formed in January 2017 and is around the level 1.0350 - 1.040.   Japan's central bank continues to support the fragile economy The Bank of Japan on Thursday reinforced its commitment to keep interest rates at very low levels by pledging to buy unlimited amounts of 10-year government bonds daily, sparking a fresh sell-off in the yen and reviving government bonds. With this commitment, the BOJ is trying to support a fragile economy, even as a surge in commodity prices is pushing the inflation up.   The decision puts Japan in the opposite position to other major economies, which are moving towards tighter monetary policy to combat soaring prices. Figure 5: The USD/JPY on the monthly and daily chart In fresh quarterly forecasts, the central bank has projected core consumer inflation to reach 1.9% in the current fiscal year and then ease to 1.1% in fiscal years 2023 and 2024, an indication that it views the current cost-push price increases as transitory.   In the wake of this decision, the Japanese yen has continued to weaken and has already surpassed the magical level 130 per dollar.   Strong dollar beats also gold Anticipation of aggressive Fed action against inflation, which is supporting the US dollar, is having a negative impact on gold. The rising US government bond yields are also a problem for the yellow metal. This has put gold under pressure, which peaked on Thursday when the price reached USD 1,872 per ounce of gold. But then the gold started to strengthen. Indeed, the decline in the US GDP may have been something of a warning to the Fed and prevent them from tightening the economy too quickly, which helped gold, in the short term, bounce off a strong support. Figure 6: The gold on H4 and daily chart Strong support for the gold is at $1,869 - $1,878 per ounce. There is a confluence of horizontal resistance and the SMA 100 moving average on the daily chart. The nearest resistance according to the H4 chart is 1 907 - 1 910 USD per ounce. The strong resistance according to the daily chart is then 1 977 - 2 000 USD per ounce of gold. Moving averages on the H4 chart can also be used as a resistance. The orange line is the EMA 50 and the blue line is the SMA 100.  
US dollar (USD) regains its losses. EUR/USD fell by 0.76%

US dollar (USD) regains its losses. EUR/USD fell by 0.76%

Jeffrey Halley Jeffrey Halley 06.05.2022 10:25
US dollar rebounds on risk aversion The US dollar reversed higher, unwinding all its post-FOMC losses as risk aversion swept other asset markets and US 10-year yields rose and closed above 3.0%. Support at 102.50 held beautifully on a closing basis, signalling more US dollar gains ahead. The dollar index rose by 1.01% to 103.55 overnight gaining another 0.11% to 103.66 in Asia. Support at 102.50 remains intact with immediate resistance at a double top just ahead of 104.00. A close above 104.00 will signal rapid gains to 105.00 and in the bigger picture, the technical picture still says a multi-month rally to above 120.00 is possible.   EUR/USD fell by 0.76% to 1.0540 overnight, easing to 1.0530 in Asia. EUR/USD has nearby support at 1.0470 and resistance at 1.0650. Overall, the EUR/USD technical picture remains extremely bearish. It remains well below its multi-decade breakout at 1.0800, and only a weekly close above there would suggest the downtrend is over for now. Rallies above 1.0700 will remain hard to sustain with risks skewed to a resumption lower. A Russian retaliation to the EU oil embargo targeting natural gas exports would see EUR/USD move toward parity very quickly.   Sterling collapsed overnight after the Bank of England hiked rates by 0.25%, but signalled a UK recession next year, marking 2023 growth down to -0.25%. Combined with US dollar strength, GBP/USD fell by 2.21% to 1.2355, edging up to 1.2360 in Asia. GBP/USD has immediate resistance at 1.2400 and then 1.2635. The technical picture is very negative now and failure of the overnight low at 1.2325 will signal another selloff to 1.2200. In the months ahead, GBP/USD could well test its Brexit and then March 2020 lows.   Japan has returned from holidays today, with USD/JPY rising 0.84% to 131.15 overnight as US 10-year yields shot up through 3.0% once again. Today, USD/JPY has gained 0.30$ to 131.60, with the yen getting no solace from higher than expected Tokyo inflation data. With the Bank of Japan showing no signs of adjusting its 0.25% JGB yield cap, and US rates continuing to climb as the Fed gets busy fighting inflation, downside pressure on the yen seems inevitable. A rally by USD/JPY through 132.35 sets the stage for a move to the 135.00 area next week.   Asian currencies, including the offshore yuan, reversed the previous day’s gains plus interest overnight as the risk aversion wave by equities, and higher US yields, saw investors pile into US dollars. With China officials affirming their commitment to covid-zero, China’s growth fears are providing another headwind to regional currencies. With more and more central banks globally capitulating on inflation denial and moving to a rate hiking stance, pressure on Asian currencies is set to ramp up in the months ahead.   A stronger yuan fixing today by the PBOC has had no notable impact on either USD/CNH or USD/CNY. USD/CNH has powered through resistance at 6.7000, on its way to 6.7150 today. USD/CNY has risen to 6.6740. China authorities are showing no signs of concern about the fall of the yuan, and until they do, Asian regional currencies will remain under pressure from a stronger US dollar and diverging monetary policies. Despite the RBI rate hike, USD/INR is testing resistance at 76.60 today, USD/MYR has risen 0.60% to 4.3750 and still has 4.4500 written all over it. ​ Meanwhile, it looks like the central bank in South Korea and the Philippines are around on the topside of USD/KRW and USD/PHP. USD/SGD is testing 1.3900 this morning and failure could see the pair move towards 1.4100 next week.     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Forex News: EURUSD, are we seeing a new breakout?

Forex News: EURUSD, are we seeing a new breakout?

8 eightcap 8 eightcap 12.05.2022 09:48
Risk markets are seeing another session of aggressive selling. The selling so far is across multiple asset classes. It’s a real good old fashioned risk-off day so far. Until today the EURUSD looked to be holding up the best out of the three main risk currencies, but that’s all changed in today’s European session after sellers finally broke through support. Until today the EURUSD continued to hold its line ignoring the AUD and GBP making lower moves to the USD. 1.0490 continued to hold for buyers and even in today’s Asian session, this level remained in play. The AUD and GBP continued to hit new lower lows while the EUR held on. We started to think, is it EU rate raise expectations holding it up? That didn’t make real sense as both currencies saw rate raises recently but continued to move lower. This all changed today after sellers broke support and confirmed a breakout of the descending triangle pattern. These patterns in downtrends are normally seen as trend continuation patterns and this case is no different. While price remains below support we will continue to look for further lower prices and with the ongoing inflation worries and global recession fears, this could be a factor that maintains selling. There is talk of parity with the USD, could this be the start of the move that realise these calls? EURUSD D1 Chart The post Forex News: EURUSD, are we seeing a new breakout? appeared first on Eightcap.
The Swing Overview - Week 18 2022

The Swing Overview - Week 18 2022

Purple Trading Purple Trading 16.05.2022 10:51
The Swing Overview - Week 18 In the war against rising inflation, central banks in the US, the UK and Australia raised interest rates this week. Britain, meanwhile, warned of the risk of a recession. The CNB also raised rates. They have thus reached their highest levels since 1999. The key interest rate in the Czech Republic is now 5.75%.   The main stock indices have weakened strongly in response to the monetary tightening policies of the major economies and are at significant support levels. The negative sentiment on the indices is confirmed by the VIX fear indicator, which is above 30. The US dollar, on the other hand, continues to ride on the winning wave. The Fed raised interest rates by 0.5% The Fed raised rates by 0.5% points on Wednesday as expected, the highest jump in 22 years. This took the interest rate to 1%. The Fed chief announced that further half a percentage point rate hikes will continue at the next meetings in June and July. Powell also stated that the US economy is doing well and that it can withstand interest rate hikes without the risk of a recession and a significant increase in unemployment.   In addition to the rate hike, the Fed announced that in June it would begin reducing the assets on the bank's balance sheet that the central bank had accumulated during the pandemic. In June, July and August, the Fed will sell $45 billion of assets a month, and starting in September it will sell $95 billion a month.   Although Powell ruled out a 0.75% rate hike at the next meetings, interest rate futures markets continue to expect that possibility with about an 80% probability. Figure 1: The CME Fed Watch tool projections of the target interest rate for the next Fed meeting on June 15, 2022 Based on these expectations, US 10-year Treasury yields continue to strengthen and have surpassed the 3% mark. The US dollar is also strengthening and it is at the highest level since January 2017 and approaching 104.  Figure 2: The US 10-year bond yields and the USD index on the daily chart   Equity indices remain under pressure The SP 500 index initially rallied strongly following the announcement of the rate hike, after Powell ruled out a 0.75% rate hike in subsequent meetings. However, markets gave back all the gains the following day as interest rate futures continue to estimate an 80% probability that the next rate hike, which will take place in June 2022, will be 0.75%.   Figure 3: SP 500 on H4 and D1 chart Thus, in terms of technical analysis, the US SP 500 index continues to move in a downtrend below both the SMA 100 and EMA 50 moving averages with resistance, according to the 4 H chart, at 4,308 - 4,313. The next resistance, according to the H4 chart, is 4,360 - 4,365.  Strong resistance is at 4,500. The current support is 4 070 - 4 100.   German DAX index German industrial orders fell by 4.7% in March, which is more than expected. A major contributor to this negative result was a reduction in orders from abroad as the war in Ukraine hit demand in the manufacturing sector. The outlook is negative and some analysts suggest that the German economy is heading into recession. The reasons are the war in Ukraine, problems in supply chains and high inflation. The Dax index confirms these negative outlooks with a downward trend. Figure 4: German DAX index on H4 and daily chart The index continues to move below the SMA 100 on the daily chart and on the H4 chart, confirming the bearish sentiment. The nearest support according to the H4 is 13,600 - 13,650. Resistance is 14,300 - 14,330. The next resistance is 14,592 - 14,632.   The outlook for the euro remains negative HSBC bank on Thursday significantly cut its forecast for the euro, saying it expects the euro to weaken to parity against the US dollar this year, the first major investment bank to make such a prediction.   The post-pandemic economic environment, which has been damaged by the ongoing war in Ukraine, looks challenging for the European economy, potentially forcing the European Central Bank to tighten policy slowly compared to the U.S. Federal Reserve, which has begun an aggressive rate-hiking cycle.  This has raised the prospect of the single currency falling to levels not seen in two decades. HSBC said it expects the move to happen by the fourth quarter of 2022.   ECB board member Isabel Schnabel said this week that rates may need to be raised as early as July. The precursor to any rate hike must be an end to bond purchases and that could come in late June. Markets are pricing in a 90 basis point tightening in rates this year.   Figure 5: The EURUSD on H4 and daily chart The EUR/USD pair is in a clear downtrend with resistance at 1.0650 - 1.071. The important support is 1.05, but it has already been tested several times and could be broken soon. The next support is from January 2017 at around 1.0350 - 1.040.   The Czech koruna got another injection in the form of an interest rate hike The CNB raised the interest rate by 0.75%, which exceeded analysts' expectations who projected a 0.50% rise. The current rate now stands at 5.75%, the highest since 1999. Consumer price growth continues to rise and by raising the interest rate the central bank is trying to dampen this growth by raising the interest rate. Inflation is expected to reach 15% by mid-year. The CNB has an inflation target of 2% and inflation is expected to reach these levels in 2024.   The problem is economic growth, which is slowing significantly.  But maintaining price stability is clearly more important than the negative effects of higher rates on the real economy.  Figure 6: The USD/CZK and the EUR/CZK on the daily chart The Czech koruna has so far done best on the pair with the euro, as interest rates are zero on the euro. The koruna has been weakening significantly on the USD pair in recent days. The current significant resistance on the USD/CZK is CZK 23.50 per dollar and on the EUR/CZK it is 24.70.    Bank of England warned of recession and more than 10% inflation The Bank of England sent out a strong warning that Britain faces the twin dangers of recession and inflation above 10% when it raised interest rates by a quarter percentage point to 1% on Thursday. The pound fell more than a cent against the US dollar and hit its lowest level since mid-2020, below $1.24, as the gloominess of the BoE's new forecasts for the world's fifth-largest economy caught investors off guard.    The BoE also said it was also concerned about the impact of renewed COVID-19 lockdowns in China, which threaten to hit supply chains again and increase inflationary pressures.    The BoE's rate hike was the fourth since December, the fastest pace of policy tightening in 25 years. The central bank also revised up its price growth forecasts, which suggest it will peak above 10% in the final three months of this year. Previously, it had expected it to peak at around 8% in April. Markets expect interest rates to reach 2-2.25% by the end of 2022.  Figure 7: The GBP/USD on weekly and daily charts In terms of technical analysis, the GBP/USD is in a downtrend. The pound is trading at levels below 1.24 pounds per dollar and has reached to the support of 1.225-1.2330. The nearest resistance according to the weekly chart is at 1.2700-1.2750.   
The Swing Overview - Week 19 2022

The Swing Overview - Week 19 2022

Purple Trading Purple Trading 16.05.2022 10:59
The Swing Overview - Week 19 Stock indices continued to weaken strongly last week, while the US dollar has already surpassed the mark 104 and is at 20-year highs. However, a set of important data is behind us, which could bring some temporary relief to the equity markets. The Czech koruna weakened sharply after the appointment of the new CNB Governor Ales Michl, who is a proponent of a dovish approach. Thus, the rise in interest rates in the Czech Republic appears to be close to its peak.   Macroeconomic data The US consumer inflation for April was reported on Wednesday, which came in at 8.3% on year-on-year basis. Analysts were expecting inflation to be 8.1%. Although the figure achieved was higher than expectations, it was still lower than the 8.5% inflation figure achieved in March. On a month-on-month basis, the price increase in April was 0.3%, significantly lower than in March when prices rose by 1.5%.   On Thursday, industrial inflation was reported at 8.8% year-on-year and 0.4% month-on-month for April.   The positive thing about this data is that inflation declined from previous readings. However, it is important to note that the year-on-year comparison is based on data where inflation was also higher in the previous year due to the recovery from the Covid-19 pandemic.   The Fed chief reiterated that he expects another 0.50% point rise in interest rates at the next two Fed meetings. He also mentioned that a higher rate hike cannot be ruled out if necessary.   The US 10-year bond yields came down from their peak and made a slight correction. However, the US dollar continued to strengthen and broke the resistance at 104. The dollar is thus at 20-year highs. Figure 1: US 10-year bond yields and USD index on the daily chart   Equity indices heavily oversold The strong dollar, rising US bond yields, the war in Ukraine and the effects of the lockdown in China were the main reasons for the decline in equity indices. The SP 500 index hit 3,860, the lowest level since March 2021. This is also where long-term support is. However, the important macro data is behind us and the market has processed all the available fundamental information. This could bring temporary relief to the markets and the index could make an upward correction. The fall in 10-year bond yields, gives this move some boost as well.   Figure 2: The SP 500 on H4 and D1 chart However, from a technical analysis perspective, the US SP 500 index remains in a current downtrend as the markets have formed lower low and is also below both the SMA 100 and EMA 50 moving averages on the H4 and daily charts. The nearest resistance is 4040 - 4070. The next resistance is at 4,140 and especially 4,293 - 4,300. The support is at 3,860 - 3,900.   German DAX index In macroeconomic data, the German ZEW Economic Sentiment for May was reported last week and showed a reading of -34.3, an improvement from the previous month's reading of -41.0. Inflation in Germany for April is at 7.4% on year-on-year basis and up 0.8% from March (the previous month's increase was 2.5%). Figure 3: German DAX index on H4 and daily chart The index continues to move in a downtrend along with the major world indices. The price has reached the SMA 100 moving average on the H4 chart, which tends to signal resistance in a downtrend. The price is moving below the SMA 100 on both the daily chart and the H4 chart, confirming the bearish sentiment. The nearest support according to the H4 is 13,600 - 13,650. The resistance is 14,300 - 14,330. The next resistance is 14,592 - 14,632.   The big sell-off in the euro continues The euro fell to 1.0356 against the dollar, the lowest value since January 2017. This value is also an area of significant support where price could stall. Fundamentally, the euro's depreciation is due to the strong dollar and the Fed's hawkish policy, which contrasts with the ECB's policy of not raising rates yet.    Figure 4: The EURUSD on H4 and daily chart Eurozone inflation data will be reported next week, which could be an important catalyst for further movement. The significant support is priced around 1.0350 - 1.040. The current resistance is at 1.05.   Czech koruna weakened strongly on the new governor appointment The President Miloš Zeman surprised with the appointment of Ales Michl for the governor of the CNB. Michl is known for his dovish views, having spoken out against raising interest rates at recent meetings. His appointment was welcomed in the markets by a strong depreciation of the Czech koruna. However, the bank later intervened in the markets by selling part of its foreign exchange reserves to prevent further depreciation of the Czech koruna.   It is important to know that the Bank's monetary policy is decided by the seven-member Bank Board. So far, the proportion for voting on rate hikes has been 5:2. But by the end of June, the president must appoint 3 new board members. This could significantly change the voting ratio on the board and set a new course for the bank's policy, which would mean a halt to the rise in interest rates. However, it is likely that at the June board meeting the board, still with the old composition, will decide on further interest rate increases. Figure 5: The USD/CZK and the EUR/CZK on the daily chart The Czech koruna has reached 24.36 against the dollar and 25.47 against the euro, from which it started to descend after the CNB interventions.  
The Swing Overview – Week 20 2022

The Swing Overview – Week 20 2022

Purple Trading Purple Trading 02.06.2022 16:36
The Swing Overview – Week 20 The markets remain volatile and fragile, as shown by the VIX fear index, which has again surpassed the level 30 points. However, equity indices are at interesting supports and there could be some short-term recovery. The euro has bounced off its support in anticipation of tighter monetary policy and the gold is holding its price tag above $1,800 per troy ounce. Is the gold back in investors' favor again? Macroeconomic data The week started with a set of worse data from the Chinese economy, which showed that industrial production contracted by 2.9% year-on-year basis and the retail sales fell by 11.1%. The data shows the latest measures for the country's current COVID-19 outbreak are taking a toll on the economy. To support the slowing economy, China cut its benchmark interest rate by 0.15% on Friday morning, more than analysts expected. While this will not be enough to stave off current downside risks, markets may respond to expectation of more easing in the future. On a positive note, data from the US showed retail sales rose by 0.9% in April and industrial production rose by 1.1% in April. Inflation data in Europe was important. It showed that inflation in the euro area slowed down a little, reaching 7.4% in April compared to 7.5% in March. In Canada, on the other hand, the inflation continued to rise, reaching 6.8% (6.7% in March) and in the UK inflation was 9% in April (7% in the previous month). Several factors are contributing to the higher inflation figures: the ongoing war in Ukraine, problems in logistics chains and the effects of the lockdown in China. Concerns about the impact of higher inflation are showing up in the bond market. The benchmark 10-year US Treasury yield has come down from the 3.2% it reached on 9 May and is currently at 2.8%. This means that demand for bonds is rising and they are once again becoming an asset for times of uncertainty.  Figure 1: US 10-year bond yields and USD index on a daily chart   Equity indices on supports Global equities fell significantly in the past week, reaching significant price supports. Thus, there could be some form of short-term bounce. Although a cautious rally began on Thursday, which was then boosted by China's decision to cut interest rates in the early hours of Friday, there is still plenty of fear among investors and according to Louis Dudley of Federated Hermes, cash holdings have reached its highest level since September 2001, suggesting strong bearish sentiment. Supply chain problems have been highlighted by companies such as Cisco Systems, which has warned of persistent parts shortages. That knocked its shares down by 13.7%. The drop made it the latest big-stock company to post its biggest decline in more than a decade last week. The main risks that continue to cause volatility and great uncertainty are thus leading investors to buy "safe" assets such as the US bonds and the Swiss franc. Figure 2: The SP 500 on H4 and D1 chart From a technical analysis perspective, the US SP 500 index continues to move in a downtrend as the market has formed a lower low while being below both the SMA 100 and EMA 50 moving averages on the H4 and daily charts. The nearest resistance is 4,080 - 4,100. The next resistance is at 4,140 and especially 4,293 - 4,300. Support is at 3,860 - 3,900 level. German DAX index The index continues to move in a downtrend along with the major world indices. The price has reached the support which is at 13,680 – 13,700 and the moving average EMA 50 on the H4 chart is above the SMA 100. This could indicate a short-term signal for some upward correction. However, the main trend according to the daily chart is still downwards. The nearest resistance is at 14,260 - 14,330 level. Figure 3: German DAX index on H4 and daily chart The euro has bounced off its support The EUR/USD currency pair benefited last week from the US dollar moving away from its 20-year highs while on the euro, investors are expecting a tightening economy and a rise in interest rates, which the ECB has not risen yet as one of the few banks. Figure 4: The EURUSD on H4 and daily chart   Significant support is at the price around 1.0350 - 1.040. Current resistance is at 1.650 - 1.700.   The Gold in investors' attention again The gold has underperformed over the past month, falling by 10% since April when the price reached USD 2,000 per ounce. But there is now strong risk aversion in the markets, as indicated by the stock markets, which have fallen. The gold, on the other hand, has started to rise. Inflation fears are a possible reason, and investors have begun to accumulate the gold for protection against rising prices. The second reason is that the gold is inversely correlated with the US dollar. The dollar has come down from its 20-year highs, which has allowed the gold to bounce off its support.  Figure 5: The gold on H4 and daily chart The first resistance is at $1,860 per ounce. The support is at $1,830 - $1,840 per ounce. The next support is then at $1,805 - $1,807 and especially at $1,800 per ounce.
Trading plan for Dow Jones for June 29, 2022

Euro Enters The Week Strong As The Market Awaits ECB Announcements Due Later This Week (EUR/USD, EUR/GBP, EUR/CHF), Focus On The RBA Announcement On Tuesday (GBP/AUD)

Rebecca Duthie Rebecca Duthie 06.06.2022 15:22
Summary: ECB interest rate decision due to occur later this week. Confidence vote being held for Boris Johnsson later on Monday. Investor confidence could be returning to the markets. On Tuesday the Reserve Bank of Australian (RBA) is due to announce its decision regarding tightening of monetary policy. Read next: Altcoins: Decentraland (MANA), What Is It? A Deeper Look Into The Decentraland Platform  EUR strong entering the week On Monday market sentiment for this currency pair turned bearish. The Euro opened stronger on Monday as the market awaits the European Central Banks (ECB) interest rate decision, which is due to occur later this week. If the European Central Bank shows any signs of dovish intentions, the effects could be heavy on the Euro's downside, however, if a hawkish attitude is shown (which seems to be more likely), the upside effect on the euro may be minimal as the expected hike is already priced into the market. U.S CPI data is expected to close off this week, if there is another undershoot regarding the CPI data, it will just confirm that inflation has reached its peak and add to dovish pressure. EUR/USD Price Chart Both Euro and Pound sterling entered the week strong The market is reflecting mixed signals for this currency pair. As the market awaits the European Central Bank's (ECB) announcement regarding the decision for interest rates in July and September, the Euro entered the week strong. In addition, the pound sterling also entered the week strong despite a confidence vote being held this evening to determine Prime Minister Boris Johnssons future as leader. The pound sterling holding strength, shows its resilience to political tensions. EUR/GBP Price Chart EUR/CHF bullish The market is reflecting bullish signals for this currency pair. Amidst the expected announcements from the European Central Bank this week, the Euro has entered the week strong, even against the safe-haven Swiss Franc. During times of economic stress, investors normally turn to safe-haven assets, however investor confidence seems to be returning to the markets. EUR/CHF Price Chart RBA due to make an announcement The Australian Dollar entered its third week of gains this week in the wake of China’s easing of Covid-19 lockdowns and stronger than expected GDP data. However, on Tuesday the Reserve Bank of Australian (RBA) is due to announce its decision regarding tightening of monetary policy. The price of the GBP/AUD currency pair is sensitive to the price changes of the GBP/USD currency pair. GBP/AUD Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
COT Week 23 Charts: Forex Speculators Positions mostly higher led by Canadian dollar & Swiss franc

COT Week 23 Charts: Forex Speculators Positions mostly higher led by Canadian dollar & Swiss franc

Invest Macro Invest Macro 12.06.2022 17:16
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 7th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar. COT Currencies market speculator bets were mostly higher this week as eight out of the eleven currency markets we cover had higher positioning this week while three markets had lower contracts. Leading the gains for currency markets was the Canadian dollar (5,945 contracts) and the Swiss franc (4,326 contracts) with the British pound sterling (3,295 contracts), Japanese yen (2,793 contracts), Brazil real (1,389 contracts), Australian dollar (786 contracts), US Dollar Index (400 contracts) and Bitcoin (87 contracts) also showing a positive week. Meanwhile, leading the declines in speculator bets this week were Mexican peso (-2,723 contracts) and Euro (-1,729 contracts) with New Zealand dollar (-1,047 contracts) also registering lower bets on the week. Currency Speculators Notes: US Dollar Index speculator bets have continued their upward climb in four out of the past five weeks as well as nine out of the past twelve weeks. USD Index remains in an extreme-bullish strength level and is very close (currently +37,938 contracts) to the highest net speculator position (+39,078 contracts on January 4th) of this recent bullish cycle, emphasizing the strong speculator bias. The Euro speculator position saw a pullback this week (-1,729 contracts) after huge gains in the previous three weeks (+58,650 contracts). Speculator sentiment is still pretty strong currently (+50,543 contracts) despite a very weak exchange rate (EURUSD at 1.0524 to close the week) and weak outlook for the Eurozone economy with rising inflation. British pound sterling speculator sentiment has crumbled in the past few months. The net speculator position managed to poke its head above its negative bias on February 15th with a total of +2,237 net contracts but sentiment has deteriorated since. From February 22nd to this week, speculator bets have dropped by a total of -73,047 contracts and recently hit a 139-week low on May 24th, the lowest level of speculator sentiment dating back to September of 2019. Japanese yen speculator positions are the most bearish of the major currencies just under -100,000 contracts. The USDJPY exchange rate is at a 20-year high and there has been no sign that the BOJ is interest in raising interest rates while other central banks commit to higher rates. These factors seem to say that the rout of the yen will continue ahead for some time (but how far can it go?). Commodity currency speculator bets are on the defensive lately. Australian dollar spec bets have fallen in five out of the past six weeks. Canadian dollar bets are now in bearish territory for a 5th straight week. New Zealand dollar speculator positions have declined in six out of the past seven weeks and the net position has now fallen to the lowest level since March of 2020 Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Brazilian Real, US Dollar Index and Bitcoin are all in extreme-bullish levels at the current moment. On the opposite end of the extreme spectrum, the Japanese yen and the Swiss franc are very weak in relative speculator sentiment and sit in the extreme-bearish levels. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that the commodity currencies have been losing sentiment over the last six weeks. The Australian dollar, Canadian dollar and the New Zealand dollar have all had changes of at least -18.8 percent in their strength scores with the New Zealand dollar leading the decline with a -33.3 percent drop in six weeks. The US Dollar Index, Euro and Mexican Peso have had small but rising scores over the past six weeks. Data Snapshot of Forex Market Traders | Columns Legend Jun-07-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index USD Index 65,163 100 37,938 91 -41,863 5 3,925 59 EUR 730,667 95 50,543 51 -88,189 51 37,646 37 GBP 258,623 76 -70,810 23 80,465 77 -9,655 36 JPY 266,054 100 -91,646 12 109,109 89 -17,463 18 CHF 49,794 41 -16,132 16 27,216 87 -11,084 20 CAD 167,373 42 -1,062 40 -13,401 58 14,463 59 AUD 166,422 57 -47,896 40 47,413 54 483 54 NZD 63,540 70 -19,771 38 22,681 65 -2,910 19 MXN 248,184 72 32,726 41 -38,117 57 5,391 66 RUB 20,930 4 7,543 31 -7,150 69 -393 24 BRL 72,371 70 46,705 96 -48,954 4 2,249 91 Bitcoin 10,990 58 490 93 -529 0 39 14   US Dollar Index Futures: The US Dollar Index large speculator standing this week recorded a net position of 37,938 contracts in the data reported through Tuesday. This was a weekly lift of 400 contracts from the previous week which had a total of 37,538 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 91.2 percent. The commercials are Bearish-Extreme with a score of 5.0 percent and the small traders (not shown in chart) are Bullish with a score of 59.5 percent. US DOLLAR INDEX Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 85.1 3.2 8.9 – Percent of Open Interest Shorts: 26.9 67.5 2.8 – Net Position: 37,938 -41,863 3,925 – Gross Longs: 55,460 2,090 5,780 – Gross Shorts: 17,522 43,953 1,855 – Long to Short Ratio: 3.2 to 1 0.0 to 1 3.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 91.2 5.0 59.5 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 7.0 -8.8 13.4   Euro Currency Futures: The Euro Currency large speculator standing this week recorded a net position of 50,543 contracts in the data reported through Tuesday. This was a weekly reduction of -1,729 contracts from the previous week which had a total of 52,272 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 50.5 percent. The commercials are Bullish with a score of 51.0 percent and the small traders (not shown in chart) are Bearish with a score of 36.7 percent. EURO Currency Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.5 50.0 12.5 – Percent of Open Interest Shorts: 24.6 62.1 7.3 – Net Position: 50,543 -88,189 37,646 – Gross Longs: 230,248 365,628 90,978 – Gross Shorts: 179,705 453,817 53,332 – Long to Short Ratio: 1.3 to 1 0.8 to 1 1.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 50.5 51.0 36.7 – Strength Index Reading (3 Year Range): Bullish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 8.7 -11.9 22.7   British Pound Sterling Futures: The British Pound Sterling large speculator standing this week recorded a net position of -70,810 contracts in the data reported through Tuesday. This was a weekly increase of 3,295 contracts from the previous week which had a total of -74,105 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 23.0 percent. The commercials are Bullish with a score of 77.3 percent and the small traders (not shown in chart) are Bearish with a score of 35.6 percent. BRITISH POUND Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 13.4 74.1 8.4 – Percent of Open Interest Shorts: 40.8 43.0 12.1 – Net Position: -70,810 80,465 -9,655 – Gross Longs: 34,618 191,742 21,602 – Gross Shorts: 105,428 111,277 31,257 – Long to Short Ratio: 0.3 to 1 1.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 23.0 77.3 35.6 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -0.9 -4.4 17.9   Japanese Yen Futures: The Japanese Yen large speculator standing this week recorded a net position of -91,646 contracts in the data reported through Tuesday. This was a weekly boost of 2,793 contracts from the previous week which had a total of -94,439 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 12.4 percent. The commercials are Bullish-Extreme with a score of 88.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.0 percent. JAPANESE YEN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 6.9 79.3 8.7 – Percent of Open Interest Shorts: 41.4 38.3 15.3 – Net Position: -91,646 109,109 -17,463 – Gross Longs: 18,466 210,889 23,226 – Gross Shorts: 110,112 101,780 40,689 – Long to Short Ratio: 0.2 to 1 2.1 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 12.4 88.9 18.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 2.4 -2.8 3.9   Swiss Franc Futures: The Swiss Franc large speculator standing this week recorded a net position of -16,132 contracts in the data reported through Tuesday. This was a weekly advance of 4,326 contracts from the previous week which had a total of -20,458 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 15.6 percent. The commercials are Bullish-Extreme with a score of 86.9 percent and the small traders (not shown in chart) are Bearish with a score of 20.0 percent. SWISS FRANC Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.2 69.3 18.8 – Percent of Open Interest Shorts: 37.6 14.6 41.1 – Net Position: -16,132 27,216 -11,084 – Gross Longs: 2,609 34,494 9,378 – Gross Shorts: 18,741 7,278 20,462 – Long to Short Ratio: 0.1 to 1 4.7 to 1 0.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 15.6 86.9 20.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -8.3 2.4 6.0   Canadian Dollar Futures: The Canadian Dollar large speculator standing this week recorded a net position of -1,062 contracts in the data reported through Tuesday. This was a weekly boost of 5,945 contracts from the previous week which had a total of -7,007 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 40.2 percent. The commercials are Bullish with a score of 57.6 percent and the small traders (not shown in chart) are Bullish with a score of 58.6 percent. CANADIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.5 44.2 22.4 – Percent of Open Interest Shorts: 24.1 52.2 13.7 – Net Position: -1,062 -13,401 14,463 – Gross Longs: 39,288 74,044 37,463 – Gross Shorts: 40,350 87,445 23,000 – Long to Short Ratio: 1.0 to 1 0.8 to 1 1.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 40.2 57.6 58.6 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -23.8 14.2 9.7   Australian Dollar Futures: The Australian Dollar large speculator standing this week recorded a net position of -47,896 contracts in the data reported through Tuesday. This was a weekly increase of 786 contracts from the previous week which had a total of -48,682 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 40.4 percent. The commercials are Bullish with a score of 54.3 percent and the small traders (not shown in chart) are Bullish with a score of 53.6 percent. AUSTRALIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 19.1 59.9 14.5 – Percent of Open Interest Shorts: 47.8 31.4 14.2 – Net Position: -47,896 47,413 483 – Gross Longs: 31,720 99,747 24,197 – Gross Shorts: 79,616 52,334 23,714 – Long to Short Ratio: 0.4 to 1 1.9 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 40.4 54.3 53.6 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -18.8 13.8 4.3   New Zealand Dollar Futures: The New Zealand Dollar large speculator standing this week recorded a net position of -19,771 contracts in the data reported through Tuesday. This was a weekly decline of -1,047 contracts from the previous week which had a total of -18,724 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 38.1 percent. The commercials are Bullish with a score of 65.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.5 percent. NEW ZEALAND DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 19.4 69.1 4.0 – Percent of Open Interest Shorts: 50.5 33.4 8.6 – Net Position: -19,771 22,681 -2,910 – Gross Longs: 12,310 43,890 2,538 – Gross Shorts: 32,081 21,209 5,448 – Long to Short Ratio: 0.4 to 1 2.1 to 1 0.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 38.1 65.4 18.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -33.3 31.2 -4.3   Mexican Peso Futures: The Mexican Peso large speculator standing this week recorded a net position of 32,726 contracts in the data reported through Tuesday. This was a weekly decline of -2,723 contracts from the previous week which had a total of 35,449 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 41.3 percent. The commercials are Bullish with a score of 56.9 percent and the small traders (not shown in chart) are Bullish with a score of 65.9 percent. MEXICAN PESO Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 48.0 35.4 3.4 – Percent of Open Interest Shorts: 34.8 50.8 1.2 – Net Position: 32,726 -38,117 5,391 – Gross Longs: 119,162 87,884 8,441 – Gross Shorts: 86,436 126,001 3,050 – Long to Short Ratio: 1.4 to 1 0.7 to 1 2.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 41.3 56.9 65.9 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 5.4 -6.1 8.3   Brazilian Real Futures: The Brazilian Real large speculator standing this week recorded a net position of 46,705 contracts in the data reported through Tuesday. This was a weekly boost of 1,389 contracts from the previous week which had a total of 45,316 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 96.3 percent. The commercials are Bearish-Extreme with a score of 3.5 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 91.1 percent. BRAZIL REAL Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 81.1 13.5 5.4 – Percent of Open Interest Shorts: 16.5 81.2 2.3 – Net Position: 46,705 -48,954 2,249 – Gross Longs: 58,657 9,780 3,931 – Gross Shorts: 11,952 58,734 1,682 – Long to Short Ratio: 4.9 to 1 0.2 to 1 2.3 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 96.3 3.5 91.1 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -0.2 -0.2 4.4   Bitcoin Futures: The Bitcoin large speculator standing this week recorded a net position of 490 contracts in the data reported through Tuesday. This was a weekly lift of 87 contracts from the previous week which had a total of 403 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 93.2 percent. The commercials are Bearish with a score of 21.6 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.8 percent. BITCOIN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 81.5 1.5 9.7 – Percent of Open Interest Shorts: 77.1 6.4 9.3 – Net Position: 490 -529 39 – Gross Longs: 8,959 169 1,063 – Gross Shorts: 8,469 698 1,024 – Long to Short Ratio: 1.1 to 1 0.2 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 93.2 21.6 13.8 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.5 -6.4 0.6   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Currency Speculators boost Japanese Yen bets to 15-week high while Canadian dollar bets drop sharply

Currency Speculators boost Japanese Yen bets to 15-week high while Canadian dollar bets drop sharply

Invest Macro Invest Macro 26.06.2022 13:28
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 21st and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar. Currency market speculator bets overall were mixed this week as five out of the eleven currency markets we cover (Note: Russian Ruble positions have not been updated by CFTC since March) had higher positioning this week while six markets had lower contracts for the week. Leading the gains for currency markets was the Japanese yen (11,301 contracts) and the British pound sterling (2,349 contracts) with the Australian dollar (2,648 contracts), New Zealand dollar (1,415 contracts) and the US Dollar Index (534 contracts) also showing positive changes on the week. Meanwhile, leading the declines in speculator bets this week were the Canadian dollar (-19,097 contracts) and the Euro (-9,587 contracts) with the Brazil real (-2,868 contracts), Mexican peso (-489 contracts), Swiss franc (-349 contracts) and Bitcoin (-15 contracts) also showing lower speculator positions through June 21st. Currency Position Notables: Japanese Yen large speculator bets rose for the 6th straight week this week and this improvement has brought the overall speculator standing to the least bearish level of the past 15 weeks at -58,454 contracts. Speculators have trimmed a total of 52,000 contracts off of the total bearish position in these past six weeks after the standing hit -110,454 contracts on May 10th. Yen bets have been in bearish territory since March 13th of 2021 (67 weeks running) with the highest bearish level of the cycle occurring on April 12th at a total of -111,827 contracts. Canadian dollar bets dropped sharply by -19,097 contracts this week and fell for the first time in the last five weeks. CAD speculator bets had risen over the previous four weeks by a total of +37,698 contracts. The decline this week brings the CAD speculator position into a virtual neutral level at an overall bullish position of just +4,105 contracts as the speculator position has yet to find a sustainable trend and has been alternating between bearish and bullish net positions over the past few months. The US Dollar Index rose for a 3rd straight week this week and hit a new 5-year high level at +45,010 contracts. This is the first time the overall position has topped +45,000 contracts since March 21st of 2017 and the continued bullish sentiment for the DXY has pushed the US Dollar Index strength score (3-year range) to the very top of its range (100 percent – extreme bullish). Euro positions fell for the third straight week and dropped to its most bearish level of the past 29 weeks. The strength score for the Euro has dropped to just a 30.2 percent and it seems the speculator positioning is catching up to the bearishness of the EURUSD exchange rate. The speculator net position had been at a twelve-week high on May 31st at a total of +52,272 contracts before dropping over the past three weeks to settle at -15,605 contracts this week. Strength scores (3-Year range of Speculator positions, ranging from 0 to 100 where above 80 percent is extreme bullish, below 20 percent is extreme bearish and 100 percent is the top of the range) show that the US Dollar Index (100 percent), Bitcoin (99.7 percent) and the Brazilian Real (94 percent) are all in extreme bullish positions. On the bearish side, the Mexican Peso is the only currency currently in an extreme bearish position with a score of 15.9 percent. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that the Japanese Yen (32.0 percent) and the Swiss Franc (21.8 percent) are leading the strength trends over the past six weeks. Both of these markets have overall bearish net positions but have seen the bearish sentiment cooling off strongly. The Mexican Peso leads the downside trends for another week with a -18.6 percent score. Data Snapshot of Forex Market Traders | Columns Legend Jun-21-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index USD Index 58,543 86 45,010 100 -46,746 2 1,736 36 EUR 671,718 70 -15,605 30 -18,182 71 33,787 30 GBP 228,266 57 -63,247 28 77,902 76 -14,655 25 JPY 218,076 67 -58,454 33 74,349 72 -15,895 21 CHF 37,669 16 -7,157 38 14,958 67 -7,801 31 CAD 140,047 23 4,105 44 -6,578 63 2,473 35 AUD 137,017 35 -40,606 47 44,608 52 -4,002 43 NZD 42,889 30 -5,423 62 8,756 44 -3,333 13 MXN 191,265 45 -26,870 16 22,977 82 3,893 60 RUB 20,930 4 7,543 31 -7,150 69 -393 24 BRL 68,858 65 44,345 94 -45,996 6 1,651 84 Bitcoin 13,537 77 1,046 100 -995 0 -51 12   US Dollar Index Futures: The US Dollar Index large speculator standing this week recorded a net position of 45,010 contracts in the data reported through Tuesday. This was a weekly boost of 534 contracts from the previous week which had a total of 44,476 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 1.6 percent and the small traders (not shown in chart) are Bearish with a score of 35.5 percent. US DOLLAR INDEX Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 88.2 2.9 7.7 – Percent of Open Interest Shorts: 11.3 82.7 4.8 – Net Position: 45,010 -46,746 1,736 – Gross Longs: 51,606 1,676 4,522 – Gross Shorts: 6,596 48,422 2,786 – Long to Short Ratio: 7.8 to 1 0.0 to 1 1.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 100.0 1.6 35.5 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 17.1 -15.2 -7.2   Euro Currency Futures: The Euro Currency large speculator standing this week recorded a net position of -15,605 contracts in the data reported through Tuesday. This was a weekly decrease of -9,587 contracts from the previous week which had a total of -6,018 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 30.2 percent. The commercials are Bullish with a score of 70.9 percent and the small traders (not shown in chart) are Bearish with a score of 30.4 percent. EURO Currency Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 29.1 55.6 12.7 – Percent of Open Interest Shorts: 31.4 58.3 7.7 – Net Position: -15,605 -18,182 33,787 – Gross Longs: 195,554 373,695 85,208 – Gross Shorts: 211,159 391,877 51,421 – Long to Short Ratio: 0.9 to 1 1.0 to 1 1.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 30.2 70.9 30.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -9.9 7.0 12.1   British Pound Sterling Futures: The British Pound Sterling large speculator standing this week recorded a net position of -63,247 contracts in the data reported through Tuesday. This was a weekly boost of 2,349 contracts from the previous week which had a total of -65,596 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 28.4 percent. The commercials are Bullish with a score of 75.8 percent and the small traders (not shown in chart) are Bearish with a score of 25.3 percent. BRITISH POUND Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 12.5 77.6 7.8 – Percent of Open Interest Shorts: 40.2 43.5 14.2 – Net Position: -63,247 77,902 -14,655 – Gross Longs: 28,470 177,170 17,735 – Gross Shorts: 91,717 99,268 32,390 – Long to Short Ratio: 0.3 to 1 1.8 to 1 0.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 28.4 75.8 25.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 11.8 -10.3 2.1   Japanese Yen Futures: The Japanese Yen large speculator standing this week recorded a net position of -58,454 contracts in the data reported through Tuesday. This was a weekly advance of 11,301 contracts from the previous week which had a total of -69,755 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 32.9 percent. The commercials are Bullish with a score of 71.9 percent and the small traders (not shown in chart) are Bearish with a score of 21.1 percent. JAPANESE YEN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 16.4 71.6 10.6 – Percent of Open Interest Shorts: 43.3 37.6 17.9 – Net Position: -58,454 74,349 -15,895 – Gross Longs: 35,864 156,248 23,099 – Gross Shorts: 94,318 81,899 38,994 – Long to Short Ratio: 0.4 to 1 1.9 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 32.9 71.9 21.1 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 32.0 -24.7 -2.9   Swiss Franc Futures: The Swiss Franc large speculator standing this week recorded a net position of -7,157 contracts in the data reported through Tuesday. This was a weekly decline of -349 contracts from the previous week which had a total of -6,808 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 38.4 percent. The commercials are Bullish with a score of 67.3 percent and the small traders (not shown in chart) are Bearish with a score of 31.1 percent. SWISS FRANC Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 8.1 66.2 25.7 – Percent of Open Interest Shorts: 27.1 26.5 46.4 – Net Position: -7,157 14,958 -7,801 – Gross Longs: 3,068 24,927 9,673 – Gross Shorts: 10,225 9,969 17,474 – Long to Short Ratio: 0.3 to 1 2.5 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 38.4 67.3 31.1 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 21.8 -23.7 21.2   Canadian Dollar Futures: The Canadian Dollar large speculator standing this week recorded a net position of 4,105 contracts in the data reported through Tuesday. This was a weekly reduction of -19,097 contracts from the previous week which had a total of 23,202 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 44.0 percent. The commercials are Bullish with a score of 63.2 percent and the small traders (not shown in chart) are Bearish with a score of 35.1 percent. CANADIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.2 47.9 20.7 – Percent of Open Interest Shorts: 27.2 52.6 18.9 – Net Position: 4,105 -6,578 2,473 – Gross Longs: 42,260 67,084 29,011 – Gross Shorts: 38,155 73,662 26,538 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 44.0 63.2 35.1 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 10.7 -7.9 0.0   Australian Dollar Futures: The Australian Dollar large speculator standing this week recorded a net position of -40,606 contracts in the data reported through Tuesday. This was a weekly gain of 2,648 contracts from the previous week which had a total of -43,254 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 47.2 percent. The commercials are Bullish with a score of 52.2 percent and the small traders (not shown in chart) are Bearish with a score of 42.7 percent. AUSTRALIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.2 60.2 13.7 – Percent of Open Interest Shorts: 52.8 27.7 16.6 – Net Position: -40,606 44,608 -4,002 – Gross Longs: 31,745 82,514 18,756 – Gross Shorts: 72,351 37,906 22,758 – Long to Short Ratio: 0.4 to 1 2.2 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 47.2 52.2 42.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.0 -1.9 3.4   New Zealand Dollar Futures: The New Zealand Dollar large speculator standing this week recorded a net position of -5,423 contracts in the data reported through Tuesday. This was a weekly lift of 1,415 contracts from the previous week which had a total of -6,838 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 62.2 percent. The commercials are Bearish with a score of 43.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.3 percent. NEW ZEALAND DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 34.2 60.8 5.0 – Percent of Open Interest Shorts: 46.8 40.3 12.8 – Net Position: -5,423 8,756 -3,333 – Gross Longs: 14,652 26,056 2,145 – Gross Shorts: 20,075 17,300 5,478 – Long to Short Ratio: 0.7 to 1 1.5 to 1 0.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 62.2 43.9 13.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 12.7 -12.5 6.3   Mexican Peso Futures: The Mexican Peso large speculator standing this week recorded a net position of -26,870 contracts in the data reported through Tuesday. This was a weekly fall of -489 contracts from the previous week which had a total of -26,381 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 15.9 percent. The commercials are Bullish-Extreme with a score of 82.4 percent and the small traders (not shown in chart) are Bullish with a score of 59.5 percent. MEXICAN PESO Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 50.3 45.8 3.3 – Percent of Open Interest Shorts: 64.3 33.8 1.3 – Net Position: -26,870 22,977 3,893 – Gross Longs: 96,147 87,609 6,317 – Gross Shorts: 123,017 64,632 2,424 – Long to Short Ratio: 0.8 to 1 1.4 to 1 2.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 15.9 82.4 59.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -18.6 18.3 -1.1   Brazilian Real Futures: The Brazilian Real large speculator standing this week recorded a net position of 44,345 contracts in the data reported through Tuesday. This was a weekly fall of -2,868 contracts from the previous week which had a total of 47,213 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 94.0 percent. The commercials are Bearish-Extreme with a score of 6.4 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 84.1 percent. BRAZIL REAL Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 80.7 14.6 4.7 – Percent of Open Interest Shorts: 16.3 81.3 2.3 – Net Position: 44,345 -45,996 1,651 – Gross Longs: 55,599 10,020 3,238 – Gross Shorts: 11,254 56,016 1,587 – Long to Short Ratio: 4.9 to 1 0.2 to 1 2.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 94.0 6.4 84.1 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 3.5 -3.9 4.7     Bitcoin Futures: The Bitcoin large speculator standing this week recorded a net position of 1,046 contracts in the data reported through Tuesday. This was a weekly decline of -15 contracts from the previous week which had a total of 1,061 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 99.7 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 11.8 percent. BITCOIN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 77.5 0.6 7.7 – Percent of Open Interest Shorts: 69.8 7.9 8.1 – Net Position: 1,046 -995 -51 – Gross Longs: 10,495 78 1,048 – Gross Shorts: 9,449 1,073 1,099 – Long to Short Ratio: 1.1 to 1 0.1 to 1 1.0 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 99.7 0.0 11.8 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 6.3 -11.9 -3.1   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.